Advisor Login Contact Us

Stocks, Led by the Russell 2000, Surged Yesterday Amid Better than Expected Earnings and Data Suggesting Stronger Economies From the US to Europe to China.

Stocks, led by the Russell 2000, surged yesterday amid better than expected earnings and data suggesting stronger economies from the US to Europe to China.

Domestically, fewer American filed applications for unemployment benefits over the past month than at any time in 14 years while the Index of Leading Economic Indicators (LEI) rose by 0.8%, a rise consistent with 3.0% GDP growth.

Is the economy on the verge of “escape velocity,” the illusive proverbial inflection point where economic growth is sustainable?  Many times it appears that the economy is at this juncture, only to disappoint.

Regarding global growth, in my view broad based conclusions are made from single data points, data points that can be inconsistent or can suggest a mis leading environment.  A week ago the global economies were slowing too much and today they are expanding.  It is impossible for global economies to change so radically so quickly.

If this was indeed the case all should be petrified about monetary policy and interest rates as both relate to inflation.

What can change radically on a moment’s basis is sentiment, sentiment perhaps amplified by the machines dominating trading.

What will happen today?  Equities reversed some of their gains in late afternoon following unconfirmed reports of Ebola in NYC, a healthcare worker who left Western Africa about 3 weeks ago.

Last night the foreign markets were down.  London was down 0.30%, Paris down 0.52% and Frankfurt down 0.39%.  Japan was up 1.10% and Hang Sang down 0.13%.

The Dow should open nominally lower on a high profile earnings disappointment.  The S & P is on pace for the first weekly gain in five.   The 10-year is up 5/32 to yield 2.45%.

Return To Index Page
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.