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Led by technology companies and small caps equities advanced.  The catalysts were continued reassessment of dovish remarks made by the FRB Chair and optimism surrounding trade talks.

Commenting further about small capitalized issues or aka Main Street America, Bloomberg writes led by energy small caps are marking its best start to a year since 1988.  Bloomberg further writes small caps were up 22.4% for that year versus a high single digit return for the S & P 500.

Four days does not make a trend but after years of languishing, it is comforting to see monies going into the traditional “growth companies” rather than the mega size momentum shares.

In days gone by, historically growth companies were the smaller capitalized entities, not the largest companies in the world as have been the case of the last 7-8 years.   Some would argue it is these mega sized entities that had the stellar growth, a view that is partially correct.  But I ask how much larger can a $750 billion or $1 trillion company become?

What will happen today?

Last night the foreign markets were up.  London was up 0.86%,  Paris up 1.21% and Frankfurt up 0.63%.  China was down 0.26%,  Japan up 0.82% and Hang Sang up 0.15%.

The Dow should open moderately higher as the US expressed optimism that it could reach a “reasonable” deal with China on going trade negotiations.  Oil is up for the seventh consecutive day.  The 10-year is unchanged at 2.70%.


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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.