By: Kent Engelke | Capitol Securities
Markets were generally quiet yesterday. Data indicated that there is steady growth in the services industry thus bolstering confidence the economy is on a firm footing. Treasuries fell as the markets shrugged off the latest terror attack. Crude also dropped even though there was a major split in Middle East alliances.
Four of the six members of The Gulf Cooperation Council (GCC), a council primary comprised of Sunni nations, broke diplomatic relations with member Qatar over support for Shia/Iranian based Islamist terrorist groups. Simplistically speaking, Sunnis are led by Saudi Arabia and Shias are led by Iran. Qatar is now banned from air, land and sea travel in these five nations.
Is this of any significance? According to the Financial Times, the GCC was enraged that Qatar paid $1 billion to release members of the Gulf state royal family who were kidnapped in Iraq while on a hunting trip.
As noted yesterday, there is little on this week’s economic calendar thus suggesting the headlines may be the greatest factor that influences prices.
Last night the foreign markets were down. London was down 0.16%, Paris was down 0.59% and Frankfurt was down 0.75%. China was up 0.34%, Japan was down 0.95% and Hang Sang was up 0.52%.
The Dow should open nominally lower ahead of a week that can provide some sensational headlines. For example, Comey’s testimony, the British election, the ECB meeting and even more uncertainty in the Middle East. The 10-year is up 12/32 to yield 2.14%.
