Equities staged a rebound to close virtually unchanged from over a 1.0% deficit following a statement from a Federal Reserve official that policy moves are not predetermined amid the recent market turmoil. The dollar weakened and oil fell.
Fisher’s dovish comments added to optimism that central banks from US, Japan and Europe are ready to what is needed to spur growth. My comment—has the global central banks done enough and competent fiscal policy is now what is needed?
This is a big earnings and data week. Approximately 20% of the S & P 500 post results. Friday the BLS posts January’s labor report. How will the results be interpreted?
Speaking of earnings, after the market closed Alphabet/Google posted results, results that exceeded expectations. Shares have added about 5%. Will GOOG mark the end of the surge of the “must own momentum driven growth stocks?” In my view the hype is no longer there even as GOOG has surpassed AAPL as the most valuable company. AAPL is down about 30% from its all-time apex reached last year.
What will happen today? Markets may open moderately lower, perhaps the result of a drop in oil and decline in European shares.. As noted several times, the markets are most correlated to oil since 2011. Is this result of algorithmic trading where everything is correlated? Absolutely!
Last night the foreign markets were down. London was down 1.64%, Paris down 1.67% and Frankfurt down 1.08%. China was up 2.26%, Japan down 0.64% and Hang Sang down 0.76%.
The Dow should open The 10-year is
THE FED TO THE RESCUE!
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.
