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Yesterday Was a Sleepy Day.

Yesterday was a sleepy day.  Today may bring more of the same given the already thinned trading ranks will become even smaller as  this is the eve of a three day weekend, the last hurrah of the summer.

In my view, summer’s trading can be described as convictionless, low volume with massive rotation.   Yes, the averages may have achieved a new high but today’s leaders were spring’s losers and vice versa.

As noted the other day, September is historically the worst month in the markets given the acceptance that early year earnings and revenue projections will not materialize.  I rhetorically ask does this still hold true given the propensity of both management and analysts alike under promise and over deliver?

Historically the averages decline 5% to 22% before a midterm given the uncertainties at hand.  Will this year be the abnormality not because of less uncertainty but because of the growing belief there will be change yet again in Washington, an environment amplified by gargantuan levels of cash searching for a more efficient use?

Today weekly jobless claims are released and so is a regional manufacturing index, pending home sales and the first revision of second quarter GDP.  Typically GDP revisions are not major market movers unless the revision is dramatic.

Last night the foreign markets were down.  London was down 0.42%, Paris down 0.82% and Frankfurt down 1.26%.  Japan was down 0.48% and Hang Sang down 0.71%.

The Dow should open nominally lower on reports that Russia invaded the Ukraine. The 10-year is up 5/32 to yield 2.34%.


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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.