The NASDAQ stumbled after disappointing earnings from Europe’s most valuable tech company and concerns about tighter US restrictions on chip sales. Some believe the tech/chip sectors are/were priced to perfection and any mis steps would be met with selling. An issue at hand if everyone already owns the sector who is left to buy if selling commences.
One day, one company does not establish a trend, but it perhaps offers a stark warning if extremely optimistic forecasts do not materialize. Momentum and trend followers have pushed this sector to lofty valuations. The same can occur but in the inverse direction.
Commenting further about earnings, the few reports—focused primarily in the mega sized financials—have been encouraging. By week’s end about 7% of the S & P 500 would have posted results. Will the trend continue?
Oils old off about 4% as “credible” reports states that Isreal will not attack Iran’s oil or nuclear infrastructure. Isreal walked backed this statement by saying it will decide how, where and when to retaliate against Iran. The Treasury curve flattened as both the short and long dated Treasuries rallied.
Last night the foreign markets were down. London was up 0.60%, Paris down 0.64%, and Frankfurt down 0.32%. China was up 0.05%, Japan down 1.83% and Hang Seng down 0.16%.
Futures are flat. The 10-year is up 5/32 to yield 4.02%.
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.
