Equity markets were mixed following a report that a meeting between China and the US to end the trade war is now likely to happen in April at the earliest.  Many, including me, believe a trade deal is fully priced into the markets.

In my view the markets have also priced in a “patient” Fed.

What are the next possible catalysts?  I continue to believe economic growth will continue to surprise on the upside.  If trade uncertainty was the primary reason for the perceived weakness and if this concern is removed, will the narrative now change to one of growth which could in turn question monetary policy assumptions?

Many believe and are acting as though the markets are mono variable.  Most are convinced that knowledge and experience do not matter; believing all one has to do is buy a no cost passive capitalization driven index.  Macroeconomic and geopolitical knowledge and thesis is viewed as obsolete and unneeded.

Many iconic luminaries, including Buffet, Soros, Gundlach, and Einhorn have lamented as much stating current market philosophy is equivalent to music chairs.

This passive mentality will too change, perhaps the rationale as to why the late John Bogle of Vanguard believed the next 10 year annual return of a 50 50 account will be around 1.8%.

What will happen today?

Last night the foreign markets were up.  London was up 0.71%, Paris up 0.94% and Frankfurt up 0.90%.  China was up 1.04%,  Japan up 0.77%  and Hang Sang up 0.56%

The Dow should open moderately higher as worries appeared to ebb about the slowdown in global growth.    The 10-year is unchanged at 2.63%.


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.