“The flaws and fragility of France’s and more broadly Europe’s over reliance on global supply chains, from the car industry to smart phones and pharmaceuticals has been exposed. We must question this interdependence and the open border policy. The only answer is to build a new, stronger economic model, to work and produce more so as not rely on others.” President Emmanuel Macron of France in an address to his nation on Sunday.

President Macron is (was) viewed a champion of multipolarity and interdependency. Have his views radically changed, sounding more like an economic nationalist?

And then there is NY Mayor De Blasio as he is fighting to protect the NYPD from a $1 billion budget cut. NYC has a massive budget shortfall of $9 billion, partially the result of Covid. For those who do not follow NYC politics, De Blasio was partially elected by pillorying the NYPD. He is now in the odd position of defending it following the anarchy that NYC experienced several weeks ago.


Continuing with this them, Covid, testing is up almost five-fold. Greater testing will produce more cases. The appropriate question is perhaps hospitalization and intensive care admissions. According to Bloomberg both are down 74% and 82% in 30 days.

Speaking of surprises, the Citicorp surprise index has surged to the highest since inception in 2003.  The data, including statistics released today, is suggesting the recovery is looking more like a “V” than a “L.”

All the above is tectonic. Life is stranger than fiction and no one could have remotely written the above headlines four weeks ago.

The possible outcomes are infinite, an outcome that will greatly impact the markets and the economy.

Changing topics, following a volatile day equity markets posted modest gains on headlines the Federal Reserve will directly buy corporate bonds. Markets were on a firmer footing based upon stronger than expected economic data and several positive developments with China. Oil advanced about 3% on sings of improving demand and declining production.

Last night the foreign markets were up. London was up 2.64%, Paris up 2.63% and Frankfurt up 3.26%. China was up 1.44%, Japan up 4.88% and Hang Sang up 2.39%.

The Dow should open moderately higher on a $1 trillion infrastructure stimulus plans. The 10-year is off 6/32 to yield 0.75%.


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.