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According to the Bank of England (BOE), short term interest rates are at the lowest level in 5,000 years of know financial history.  Long term interest rates are also close to that level.

Ok, I did not find this statistic but rather reiterating the sleuthing of Loomis Sayles.

Wow!  For those who are into utilizing statistics to make investment decisions this is something like 57 standard deviations away from the mean or an extraordinary extreme occurrence, where one has a higher probability of getting killed tonight by a meteor after winning the lottery and getting struck by lightning.

In my view many are incredibly complacent about the bond market, perhaps the result of five years of missed forecasts by all including outlooks prognosticated by such omnipotent and omniscient organizations as the Federal Reserve, Goldman Sachs and PIMCO.

It is widely accepted failed monetary and fiscal policy by the developed world is why yields are at these lows.

Perhaps the only certainty to write is yields will go up but when and by how much.

Speaking of which, the Treasury market did close lower between 8/32 and 24/32.

Equities advanced yesterday as the dollar fell and crude rallied amid the belief that short term interest rates will remain low.

Today housing starts and the CPI is posted.  How will this data be interpreted?

Last night the foreign markets were down.   London was down 0.33%, Paris down 0.52% and Frankfurt down 0.57%.  China was up 0.67%, Japan down 1.62% Hang Sang down 0.09%.

The Dow should open quietly lower.  The 10-year is up 5/32 to yield 1.54%.

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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.