24 Jun ANOTHER STIMULUS AT HAND?

Posted at 12:50h in Market Commentary by
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Equities rose amid a report the Trump Administration supports sending another round of checks.  Markets were also cheered by data suggesting the manufacturing sector is almost expanding and new home sales are considerably stronger than expected.  Oil also gained, trading to the highest level in more than 15 weeks.

Commenting further about oil, trade hopes and demand strength was the accepted catalyst for the advance in crude.  There was no mention of the cruise missile and drone attack from Iranian backed Yemen rebels that targeted the capital and two other Saudi cities.  The attacks were thwarted by Saudi air defenses.  The lack of response to such attacks is evident of the level of complacency surrounding middle eastern politics and violence.  Five years ago prices would surged on the headlines.

Speaking of headlines, the headlines are suggesting Covid cases are exploding.    As expected, confirmed cases will rise with increased testing.  According to the CDC a record 602,000 tests were conducted yesterday.  Hospitalizations are flat to trending down and total hospitalizations are down to the lowest levels in over three months.  I must again write the increase in national cases are flat to nominally down but there are regions where cases are increasing.

Will Covid soon become yesterday’s headlines?  Probably if hospitalizations and deaths—a truer indicator of the disease—does not rise.  Unfortunately, Covid is now a major political issue.

Last night the foreign markets were down.   London was down 2.12%,  Paris down 1.50%  and Frankfurt down 1.80%.  China was up 0.30%,  Japan down 0.07%  and Hang Sang down 0.50%.

The Dow should open nominally lower on a resurgence in virus cases.  There is also the potential of increased trade tensions between the US and Europe.   Gold is up again.  The 10-year is down 1/32 to yield 0.72%.

 

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.
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