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Stocks rallied, bonds and gold fell and the British pound strengthened the most since 2008 as signs the campaigning for the UK to stay in the EU was gaining momentum.  In some regards it was a rewind of the minor panic experienced last week.

Perhaps an accurate observation to make is all have become to myopic upon an individual event drawing huge conclusions as to what may or may not occur.

This myopicy should be of no surprise given that all—including the FRB—have become too dependent upon short term indicators.  Three weeks ago a July rate hike was all but assured by the central bank until May’s poor unemployment data [and the upcoming Brexit vote].    Today some Fed officials are suggesting one might not occur until 2018.

FRB Chair Yellen testifies to Congress.  Will she face questions of changing stances in such quick order based upon one statistic or upcoming event?

We are all warned that past performance is not indicative of future performance.  That monetary policy and portfolio management is very subjective and quixotic given the infinite number of variables involved, each changing daily in their degree of significance.

In my view, the vast majority of participants have no vision, focusing only upon the immediacy; an environment amplified by technology based trading where everything is cross correlated.

Warren Buffet once commented his average holding period of a stock is forever.  Ok in reality it is 19 years.  Today it appears the holding period is 19 minutes.  Should we all adopt a similar positon?

What will happen today?

Last night the foreign markets were up.  London was up 0.05%, Paris up 0.66%,  and Frankfurt up 0.51%.  China was down 0.35%, Japan up 1.28% and Hang Sang up 0.77%.

The Dow should open moderately higher on Brexit optimism and ahead of Yellen’s testimony.  Crude is down about 1% after a two day 6.5% rally.  The 10-year is unchanged at 1.69%.

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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.