Fourth quarter earnings season commences today with the release of Citicorp’s earnings. At time of this writing, 4Q profits are expected to increase around 9%. For the year, earnings are forecasted to rise around 20%.
All will pay considerable attention to forward looking statements which could revise the 2019 outlook of a 7.7% gain in results. Generally speaking for the second consecutive quarter value earnings are expected to increase at a rate double of that of growth, a major reason why I believe the market has been met with great volatility.
There is little I can write about Friday’s market action. Concern is rising about the possible ramifications of the government shut down. Oil slumped following a 23% surge since its December 24 floor. Equities were essentially unchanged and Treasuries ended higher by 12/32.
This week the averages may be impacted considerably by profit results. Some economic releases will be delayed because of the shutdown thus suggesting the averages my trade in a void.
Last night the foreign markets were down. London was down 0.94%, Paris down 0.80% and Frankfurt down 0.66%. China was down 0.71%, Japan closed for a holiday and Hang Sang down 1.38%.
The Dow should open considerably lower over Chinese growth concerns and the growing concerns over the government shutdown. The 10-year is up 7/32 to yield 2.68%.
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.
