Rollercoaster week in U.S. stocks leaves investors braced for bumps ahead

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After months of placid trading, U.S. stock volatility surged this month as a run of alarming data coincided with the unwinding of a massive, yen-fuelled carry trade to deal equities their worst selloff of the year

A week of wild market swings has investors looking ahead to inflation data, corporate earnings and presidential polls for signals that could soothe a recent outbreak of turbulence in U.S. stocks.

“Everybody is now worried about the economy,” said Bob Kalman, a portfolio manager at Miramar Capital. “We are moving away from the greed portion of the program and now the market is facing the fear of significant geopolitical risks, a hotly contested election and volatility that is not going away.” One potential flashpoint will be when the U.S. reports consumer price data on Wednesday. Signs that inflation is dropping too steeply could bolster fears that the Federal Reserve has sent the economy into a tailspin by leaving interest rates elevated for too long, contributing to market turbulence.

Corporate earnings, meanwhile, have been neither strong enough nor weak enough to give the market direction, said Charles Lemonides, head of hedge fund ValueWorks LLC. Lemonides believes the recent volatility is a healthy correction during an otherwise strong bull market, and he initiated a position in Amazon.com to take advantage of its weakness.Democrat Kamala Harris leads Republican Donald Trump 42 per cent to 37 per cent in the race for the Nov. 5 presidential election, according to an Ipsos poll published on Thursday.

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