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Democracy is ugly. It is visceral.  It is filled with animosity.  It is awesome!!  We are witnessing the greatest form of government ever devised during some of its finest moments.  What??

The reason why the US is the greatest country that has ever existed is because we vent our problems with words, not with guns and violence.  Yes today’s rancor is intense, a rancor that has yet to reach a crescendo.  There are still 25 days until the election, an eternity in political terms.

Some have stated today’s vitriol is at an all-time high.  I beg to differ.  There are many times since 1776, including 1792, 1796, 1804, etc. when words and actions were worse than today.  I snarky ask when was the last time two prominent politicians much less founding fathers challenged each other to a duel?

For those who do not recall, two founding fathers one of who created the US Treasury and the other was a sitting VP, had a duel.  The year was 1804 and folklore states it was over a woman. Both were bitter political enemies.

Burr killed Hamilton and Burr returned to Washington and finished his term.

For those who don’t recall in 1940 Wendell Willkie vehemently accused FDR as a Hitler wananabee.

Yesterday I received a lot of feedback with my comment that I think Trump has a 45% chance of winning.  The market is suggesting only an 18% chance.

I will not reiterate yesterday’s reasons for such a unique outlook but will instead rely upon a very unscientific poll of friends, associates, clients, traders, analysts that I communicate with almost daily.

The people I asked transcend the socio economic spectrum ranging from gay, to African American to Indian to professional to blue collar to female to male to retired.

Of the approximately 125 people I asked who they thought was going to win, by a margin of 3:1 Clinton.  All respondents voluntarily told me who they were going to vote for, of which only twenty seven said Clinton and another two for an independent.

Wow!  The consistent comment from all was the intense negative feelings about both candidates but the desire of change from the status quo was greater than that of dislike.  Most that are supporting Trump are nervous about making such a public declaration fearing many would view them as a homophobic, racist, sexist person who denigrates women.

While I will emphasize this is an unscientific poll that are primarily involved in the financial industry in one manner or another, I found the level of support for Trump surprising.

But should they given according to Gallup 75% think the country is headed in the wrong direction.  My results indicated a 76% support for Trump, about the same percentage of those who believe the country is on the wrong track.

To ask the obvious question, does these results transcend to society, results that directly contradict the scientific surveys?

Referring back to history, around this period in the Carter/Reagan election, both were within the margin of error.  Reagan won by 10%.  Currently the Real Clear Politics average has Clinton up by 6.2% on a head to head match up.  With the independent candidates Clinton is up by 4.6%.

Tectonic changes are always volatile where the establishment is wrong.  There was a 70% chance Brexit was going to fail on the eve of the election.  It won by an overwhelming margin.

Commenting upon yesterday’s market action, the Dow was off almost 200 points on Chinese and interest rate fears but only closed down about 45 points.

Last night the foreign markets were up.  London was up 0.83%, Paris up 1.82% and Frankfurt up 1.54%.  China was down 0.13%, Japan up 0.49% and Hang Sang UP 0.88%.

The Dow should open moderately higher as JO Morgan exceeded expectations.  There is a large data dump at 8:30, statistics that include the PPI, retail sales and a sentiment survey.  Oil Is up 1%. The 10-year is off 11/32 to yield 1.79%.

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Ken 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.