Equities initially fell for a myriad of reasons including escalated rhetoric against China over the corona virus. The President is prodding the nation to reopen for business while some are fearing the proverbial second wave.

Equities were then cheered by New York’s decline in coronavirus deaths and hospitalizations. California also announced the fewest number of deaths in three weeks. Overall cases fell of r the week by 2.0%, below last week’s average of 2.6%.

Internationally, Italy is beginning to reopen following two months of closure, a reopening that some are stating is too cautious. New Zealand had no new cases for the first time since March and Hong Kong may soon reopen cinemas and gyms.

Many times, I have commented about the liquidity of the bond market. Monday the NY Fed stated it will begin purchasing shares of eligible corporate bonds ETFs in early May. It should be noted the Fed first announced the creation of corporate credit facilities on March 23 albeit the facility has not yet been launched according to Fed Chairman Powell.

A strong argument can be made the reforms from the 2008-09 crisis sowed the seeds for the 2020 crisis. There will be reforms and I hope the inevitable reforms will not create the next major issues.

What will happen today?

Last night the foreign markets were up. London was up 1.35%, Paris up 1.40% and Frankfurt up 1.34%. China was up 1.33%, Japan closed for a holiday and Hang Sang up 1.08%.

The Dow should open nominally higher as more economies move towards easing their lockdowns. Oil is up for the fifth day, the longest run of daily gains in more than 9 months, advancing about 8%, on belief that demand is returning and inventories will decline.

The 10-year is off 5/32 to yield 0.65%


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.