EIGHT DAYS UNTIL THE ELECTION

The election is in eight days.  Will the outcome end the extreme vitriol and animosity that has dominated society over the last 9 months?  I will argue COVID was the proverbial gasoline that caused tensions to rise to many flash points.  Like all I have my views about the possible outcome of the election, views that are about as substantive and supportive as my neighbor’s views.  The simple fact of the matter is only history will answer who had the correct outlook.

Democracy is ugly but is still the best type of government yet devised.

This is a big week for earnings.  According to Bloomberg, of the 58 S & P 500 companies that have reported results, 52 companies have raised their financial outlooks and only six have cut them.  The net improvement as a percentage of the total reached 63%, the highest since Bloomberg stated compiling data in 2000.

The immediate conclusion to make is that the economy did not continue to deteriorate and recovered much faster than expected, an environment that is evident by the loan loss reversals by the mega sized financials.   Speaking first hand, loan loss reversals are very rare.  Once reserved, regulators greatly dissuade management of any changes believing that there could never be too many reserves.

The economic calendar is comprised of several housing and manufacturing data point, initial estimates of third quarter GDP, and personal income/spending data.  How will this data impact the market?

Last night the foreign markets were down.  London was down 0.09%, Paris down 0.50% and Frankfurt down2.20%.  China was down 0.82%, Japan down 0.09%  and Hang Sang up 0.54%.

The Dow should open moderately lower on the absence of stimulus news, election, COVID cases and profit concerns.  According to newswires, 184 S & P 500 companies post profits this week.   The 10-year is up 8/32 to yield 0.82%.

 

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.