Stocks rose following an increase in German investor confidence as that country averted a recession as its economy unexpectedly grew during the third quarter. Equities were also positively influenced by the suspension of the increase in the Japanese sales tax, the cause for that country’s dour economic growth.
Equities were also encouraged by a health care merger and data suggesting the US is not experiencing deflation.
Will the advance continue? As noted several times I think the market is feeling “heavy” and profit taking should be expected at any juncture, a decline perhaps between 3% and 5%.
Today’s trading will be influenced by the release of the Minutes from the October 29 FOMC meeting.
Last night the foreign markets were mixed. London was down 0.10%, Paris up 0.47% and Frankfurt up 0.55%. Japan was DOWN 0.32% and Hang Sang DOWN 0.66%.
The Dow should open little changed ahead of the Fed Minutes. The 10-year is off 6/32 to yield 2.34%.
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.
