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Several times I have commented the first quarter will be the inverse from the first quarter of the last five years, defined as growth will be stronger than expected. As all recall growth stalled in the first quarters’ of 2011-2015.
Yesterday’s durable goods orders were evidence to support this view. Orders were considerably stronger than expected in all dimensions. This should not be surprise given the unexpected increase in manufacturing employment that was reported in January’s jobs data.
Initial jobless claims also suggested continued strength in the jobs market for such is hovering around 45 year lows.
Today is the second print of fourth quarter GDP. Consensus is expecting a revision to 0.4% from 0.7% because of inventory and trade. As noted last month, core GDP (less inventory and trade) was considerably stronger than expected.
Equities rallied yesterday, the result of oil. Financials were the dominant performers. There are unconfirmed reports of a possible OPEC meeting in March.
What will happen today?
Last night the foreign markets were up. London was up 0.96%, Paris up 1.40% and Frankfurt up 1.39%. China was down 0.12%. Japan up 0.30%and Hang Sang up 2.52%.
The Dow should open moderately higher on Chinese comments that it has room to ease. Oil is up about $0.50/barrel. The 10-year is off 6/32ot yield 1.74%.

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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.