Equities are hovering around last July levels as the markets have become spooked by the specter of higher interest and the possibility of a Trump presidency as a ABC/Washington Post poll showed that Trump with 46% of the vote compared to Clinton’s 45%.
The fear factor is rising in so many dimensions.
Commenting about interest rates, the two day Fed meeting concludes today. No change is expected but all believe the narrative will suggest an increase in rates is all but done in December given the data.
Speaking of which, the ISM Manufacturing Index was nominally higher than expected suggesting that growth in this sector is consistent to a stronger fourth quarter. The 51.9 reading was nominally higher than the 51 averaged thus far this year and the 51.3 measured in 2015. The prices paid component rose to a three month high of 54.5 from 53 thus igniting some concern that inflation may be stirring.
What can I write about the election?? Life is indeed stranger than fiction but will again opine for as ugly and visceral as democracy may be, it beats any alternative.
Last night the foreign markets were down. London was down 0.32%, Paris down 0.58% and Frankfurt down 0.69%. China was down 0.63%, Japan down 1.76% and Hang Sang down 1.45%.
The Dow should open little changed ahead of the outcome of the Fed meeting and the assessment of earnings and the chances of a Donald Trump presidency. The 10-year is up 8/32 ot yield 1.80%.
Ken Engelke
Chief Economic Strategist Managing Director
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.
