It appears the longest government shutdown on record is about to end. The news sent both yields and equities higher.
If the government is on the verge of reopening there will be a deluge of data, a flood that may be murky or dated, an environment that may not be fully clear until early 2026. At the time of this writing, the markets are suggesting about a 50% chance of an interest rate cut in December. Before October’s FOMC meeting, another interest rate cut in December was fully priced.
Yesterday was the first round of this week’s Treasury auctions. The Treasury Department offered $58 billion of the three-year Treasury which was met with the strongest demand since 2023. Wednesday’s sale of the 10-year Treasury might prove a sterner test of investor demand.
Today is Veterans Day. Please take the time to thank all those who have served even though we cannot remotely extend the gratitude that is required. They have volunteered to protect our freedoms, our freedom to write the most outrageous comments about our government and society. Our Veterans are motivated by something bigger than themselves and I thank them.
Last night the foreign markets were mixed. London was up 0.75%, Paris up 0.65% and Frankfurt down 00.1%. China was down 0.39%, Japan down 0.14% Hang Seng up 0.18%.
Dow and NASDAQ futures are bifurcated as the former is unchanged and the latter down 0.50%. SoftBank stated it sold entire stake in NVDA rising questions about the tech sector’s valuations. The bond market is closed for Veterans Day.
Kent Engelke
Chief Economic Strategist Managing Director
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.
