A POST DEBATE AND CONSUMER CONFIDENCE INSPIRED ADVANCE

Equities shrugged off the drop in oil as consumer confidence rose and the perception that Hillary Clinton beat Donald Trump in their first debate.

Commenting about the latter, The Establishment and Wall Street is desirous for a Clinton presidency.  As noted yesterday, Wall Street is comfortable with the known versus the unknown.  Is Trump the person as the media portrays him?  Clinton has been in the public light for 30 years and there is little that is not known about her.

The Establishment—both on the left and the right—has no regard for Mr. Trump.  Is this because he threatens the status quo where the animosity towards him falls under the guise of The enemy of my enemy is my friend?

As noted above oil tumbled as Iran said it is unwilling to freeze output at current levels and wants to raise production to 4 million barrels.  There was little optimism an agreement was going to be reached and crude has maintained a relatively tight trading range over the past two months.

Commenting about consumer confidence, confidence rose to the highest level since 2007.  As I have remarked many times, consumer confidence has little predictive power as it only tells us where we have been not where we are going.  With this written, sentiment at this level suggests a robust holiday season.

Earning season is quickly approaching and analysts are expecting a 2.3% decline, the sixth consecutive quarterly decline.  Revenues however are expected to rise about 2.2%.  Will results again surprise on the upside for the gazillioneth quarter?  How will the upcoming profit season influence perceptions?

What will happen today? Will durable goods data impact trading?

Last night the foreign markets were up. London was up 0.89%, Paris up 1.16% and Frankfurt up 1.10%.  China was Japan down 1.31% and Hang Sang up 0.20%.

The Dow should open flat.  Oil is up as an inventory survey had yet another expected reduction versus an expected increase. Moreover Saudi Arabia signaled it may compromise with rival Rian perhaps in November but expect no agreement in this week’s meetings. The 10-year is off 2/32 to yield 1.58%.

 

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.