Equities fell nominally as some are wary of escalation in tensions with Iran.  Oil also declined believing that such any escalation will not impact supplies.  Treasuries were essentially unchanged.

As inferred above, it is now largely expected any retaliation by Iran will not be of great significance thus generating a muted reaction in the global markets.  Is this complacency misplaced?  Neither I nor does anyone else knows.

Perhaps the greatest danger is this sense of global complacency that forces Iran to take more dramatic action.  To date Iran’s actions are far from its hyperbolic and apocalyptic rhetoric.

Changing topics, yesterday’s data released was more upbeat than expected. The ISM non-manufacturing index was higher than expected rising considerably from November’s disappointing level.  The trade gap fell to the lowest level in three years and factory orders contracted less than expected.  There was little reaction to the data.

Speaking of complacency, or perhaps misguided optimism, Tesla which sells about 5 cars is up about 97% in three months making the company the most valuable car company ever in America.  Wow!

I thought the forward looking prognosis regarding Apple as a large capitalized growth opportunity, which is worth about $1.3 trillion and advanced about 87% in 2019, was nuts.  Incidentally Apple is the second most valuable company today in the world eclipsed only by the Saudi Arabian oil giant.

It is often said the most obvious conclusions are those which are ignored.  It is also said the markets can remain irrational one day longer than one can remain solvent. Perhaps both axioms are appropriate today.

Last night the foreign markets were mixed.  London was down 0.02%, Paris up 0.04%  and Frankfurt up 0.18%.  China was down 1.22%,  Japan down 1.57%  and Hang Sang down 0.83%.

The Dow should open nominally higher following an overnight plunge in S & P futures, the result of the Iranian missile strike. Iran stated it did not seek war with the US.  The 10-year is unchanged at 1.82%.  Oil is flat following an overnight surge of 4%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. 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. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.