By: Kent Engelke | Capitol Securities
The midterms are over. There is an infinite number of opinions about the possible outcomes out there. Economics prevailed in the Senate as the Republicans increased their number of seats but lost in the House as power shifted for the first time in eight years.
In some regards, the outcome is as suggested, in other regards they are not. Personally, I thought the status quo would remain, the result of the strong precedent of voters voting their pocketbooks. In some regards, this view was correct and in other regards it was wrong. It was no “Blue Wave” but similarly the status quo was not maintained.
The immediate focus will now be the commencement of the two-day FOMC meeting and the upcoming G-20 meeting. Even though no action is expected regarding monetary policy, all Fed meetings are potentially significant. As stated, will the Fed begin telegraphing their intent to end forward-looking guidance sometime in 2019?
Regarding the G-20 meeting, at this juncture little is expected regarding trade issues between the US and China.
Equities are expected to open moderately higher as the election uncertainty is over and under the traditional belief a split Congress is bullish for equities.
The 10-year is up 8/32 to yield 3.20%.
Last night the foreign markets were mixed. London was up 1.15%, Paris was up 1.31% and Frankfurt was up 0.99%. China was down 0.68%, Japan was down 0.28% and Hang Sang was up 0.10%.