Equities came under pressure, the result of trade fears and disappointing factory data.  Treasuries also declined in price, the inverse of what was expected to yesterday’s events.  Oil on the other hand advanced on speculation that OPEC+ could defy expectations by deepening its production cuts.

Commenting on the manufacturing data, the ISM declined for the fourth consecutive month.  The data, while no longer in a freefall, lacks upward momentum, perhaps the result of trade questions and corporate uncertainty.  Globally however, factory gauges in China and Germany suggest the worst may be over for the sector.

Later this week the ISM non-manufacturing index is released.  A third tier data point released yesterday rose to a seven month high, the result of business-equipment demand rising to the most in nine months.  What data point will the ISM non-manufacturing index validate?

Speaking of validation both the ADP and BLS labor report are released later in the week.  Both statistics can be pivotal to determining the immediate direction of the economy.

I will continue to maintain an optimistic view until both housing and employment turns weak.

What will happen today?

Last night the foreign markets were down.  London was down 1.06%,  Paris down 0.41% and Frankfurt up 0.54%.  China was up 0.31%, Japan down 0.64% and Hang Sang down 0.20%.

The Dow should open moderately lower on trade fears.  The 10-year is up 6/32 to yield 1.80%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. 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. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.