By: Kent Engelke | Capitol Securities

Tencent Holding Ltd, a Chinese company, impacted the markets more than the issues surrounding Turkey. Tencent posted its first profit drop in at least a decade causing a selloff in American must-own momentum technology companies. Tencent’s ADRs were down over 10% joining the ranks of some other high profile misses.

Many times I have commented about the “crowdedness” of the FAANG trade stating that outsized declines can occur with any miss-step.

There was little reaction to stronger than expected retail sales or an increase in second-quarter productivity data to the greatest pace in four years. Perhaps of greatest interest in the productivity data is that unit labor costs were revised up to 2.2% versus 0.4% over the last eighteen months. Wow!! I ask are inflationary pressures building at a greater rate than most are suggesting?

Oil fell yesterday as oil inventories rose rather than falling. Perhaps of greatest interest in this sector is that George Soros and Stanly Druckenmiller added oil shares to their portfolios. Some are suggesting crude can surge to over $100/barrel in November following the reinstatement of sanctions against Iran. Consensus thinks oil will be between $75 and $80/barrel.

Last night the foreign markets were mixed. London was up 0.59%, Paris was up 0.60% and Frankfurt was up 0.47%. China was down 0.99%, Japan was down 0.05% and Hang Sang was down 0.82%.

The Dow should open moderately higher on renewed hopes of easing global trade tensions. The 10-year is off 4/32 to yield 2.88%.