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Equites were moderately higher yesterday on a flurry of merger announcements. Optimism is also rising that earnings will turn positive this quarter, the first such occurrence in six quarters.

More than a third of the S & P 500 are scheduled to report results this week.

Treasuries were nominally lower in price, partially the result of futures now suggesting a 70% chance of a rate hike by December up from about 66% on Friday.

Oil fell about 1% as Iraq stated it should be excluded from production curbs because it is embroiled in a war with Islamic militants.   I ask what OPEC nation is not fighting a war?  Russia refused again on Sunday to commit to joining OPEC in trimming production.

What will today’s inventory data suggest?  Will stores decline for the seventh of eight weeks?

There is two weeks until the election.  I am certain it will get nastier especially if the polls tighten as they historically do during the last 14 days.  Speaking of polls, if Trump is elected, this would be even a larger upset than Dewey vs. Truman in 1948 with the establishment being completely out of touch with the electorate.

What will happen today?

Last night the foreign markets were up.  London was up 0.43%, Paris up 0.06% and Frankfurt up 0.31%.  China was up 0.36%, Japan up 0.76% and Hang Sang down 0.17%

The Dow should open little changed.   The 10-year is off 3/32 to yield 1.78%.

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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.