Welcome to December.

Welcome to December.  According to Bloomberg the S & P 500 has advanced each December for the past six years.  Will 2014 make it seven?

As widely discussed the averages have staged a handsome rebound from their mid-October lows albeit this rebound was not necessarily broad based with several sectors (i.e. oil and commodities) were actually decimated.

Will yesterday’s losers be tomorrow’s winners?  Most will agree the negative narrative surrounding oil, et al. is intense.   I will argue if the narrative ceases, prices could rebound under the simple guise all sellers have been exhausted and the sector is so vastly oversold, any change in sentiment may have an amplified impact.

Conversely, I think the general market is overbought however markets can be overbought or oversold for a prolonged period.

I have been writing growth has generally surprised on the upside, albeit there has been some statistics that have weakened this stance.  This week is a data filled week that can either validate or nullify this view.   If the statistics are surprisingly strong, the monetary time table may accelerate.

Data released include the ISM, many employment reports including Friday’s inclusive BLS report, the ISM non-manufacturing index, trade balance, consumer credit, factory orders and the Federal Reserve’s Beige Book of economic statistics utilized at the upcoming FOMC meeting.

To write the incredibly obvious, this data will influence trading and monetary policy assumptions.

Last night the foreign markets were down.  London was down 1.03%,  Paris down 0.41% and Frankfurt down 0.35%.  Japan was up 1.23% and Hang Sang down 0.07%

The Dow should open moderately lower on declining oil prices and a disappointing Chinese manufacturing data point.  The 10-year is up 1/32 to yield 2.16%.


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.