As I had mentioned in my note a few weeks ago, September and October are typically periods of volatility. We have seen the S&P 500 bounce off its 50-day moving average many times over the past year (see chart below). However, this week the S&P 500 broke through its 50-day moving average. This represents approximately a 5% correction. Perhaps we will see it test the 200-day moving average in the coming weeks, which would represent approximately a 10% correction. If you believe that we are in a secular bull market (which most of us do) this correction would be consistent with historical midcycle corrections and could potentially offer a buying opportunity.

I have also included a piece from our CIBC Economics Team entitled "Canadian election: out with the old, in with the old".

Please feel free to give us a call if you have any questions.

Have a great weekend

Milan