EARNINGS ARE EXCEEDING DUMBED DOWN EXPECTATIONS

According to Bloomberg 78% of 303 S & P 500 companies that have reported earnings have exceeded expectations.  Regarding revenues, 39% beat forecasts and 40% matched.  For the quarter earnings are expected to decline by 2.1% YOY, an improvement over the 3.8% expected drop.  Currently analysts are expecting a 1.1% 4Q profit increase.

At this juncture, trade may become less of an issue but this opinion can radically change in a five word tweet.  Will the election become more of a focus?  Most will acknowledge the Democratic primary is nothing other than a progressive love fest.  I rhetorically ask how the eventual nominee will pivot back to the center.  Perhaps the appropriate question to ask is will there be a pivot back to the center?

I do not think the country is as far left as the Democratic candidates are suggesting.  I agree with many that if all but one of the leading Democratic candidates become President, market volatility will sharply increase.

What will happen today?

Last night the foreign markets were up.  London was up 0.35%, Paris up 0.33% and Frankfurt up 0.13%.  China was up 0.54%, Japan up 1.76% and Hang Sang up 0.49%.

The Dow should open nominally higher as a trade deal appears to be inching forward.  The 10-year is off 11/32 to yield 1.82%.

kent
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.