Equities were again mixed as a group of high profile earnings offered disparate clues on the strength of the economy. Treasuries continued to slump with rates falling to levels last seen before the Fed’s dovish tilt a month ago. Oil advanced about 0.6% as OPEC is seen at risk of over tightening.

After the close, the first of the FAANG companies posted results. Netflix’s earnings exceeded expectations but their subscriber forecast trails estimates. Moreover the company lowered its second quarter earnings by 45%. The question at hand is this a one off event or a harbinger of things to come? The answer to this question can be pivotal in determining the intermediate direction of equities.

IBM also posted disappointing results after the close thus suggesting that both new and old tech may have cyclical issues.

What will happen today?

Last night the foreign markets were mixed London was down 0.08%, Paris up 0.28% and Frankfurt up 0.32%. China was up 0.29%, Japan up 0.25% and Hang Sang down 0.02%.

The Dow should open nominally higher on positive Chinese data.; Oil continued its advance on a drop in inventories.; The 10-year is off 4/32 to yield 2.61%.

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.