Equities sputtered as some of the central bank euphoria waned. Oil fell about 3.5% after advancing earlier by almost 3% on confirmed reports by both The Financial Times and Reuters that Saudi Arabia agreed to cut daily production by 1 million barrels to around 9.5 million barrels if Iran kept its daily production unchanged at August’s level of 3.6 million.  These stories were disavowed by a Saudi spokesperson.

According to the IEA, the oil market is oversupplied around 500,000 barrels

However by midafternoon the production cut/freeze story was resurrected by “two people familiar with the negotiations” stating that any formal decision will be made when OPEC meets again in two months.

As written Friday there is little conviction of agreement in this week’s meeting thus begets the question why the volatility?  Three weeks ago there was a record short interest in crude and any type of positive news will generate an outsized response.  Moreover trading/volatility is greatly influenced by technology based trading platforms.

Earnings season is quickly approaching.  Will there be any high profile warnings?

This week the economic calendar is heavy.  There ae numerous housing statistics, manufacturing information, various diffusion and spending indices and the final estimate of second quarter growth.   How will the data influence trading and monetary policy expectations?

And then there is the election?  How will tonight’s debate be interpreted and will these interpretations influence the market?

Last night the foreign markets were down.   London was down 1.15%, Paris down 1.65% and Frankfurt down 1.51%.  China was down 2.07%,  Japan down 1.25%and Hang Sang down 1.56%.

The Dow should open moderately lower ahead of tonight’s debate and a meeting between major oil producers.  The latest polls indicate a dead heat between Trump and Clinton.    The 10-year is up 4/32 to yield 1.60%.  Oil is up about 1%.


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.
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