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A theme that may become more pronounced is Main Street outperforming Wall Street, a nascent trend that commenced about two months ago.  President Trump’s economic comments are more akin to “old line Democratic thinking” of favoring small business and the “little man” instead of the multinational growth companies.

Today’s Democratic Party is more of an elitist party, representing the views of the largest companies and those who are regarded as “victims” because of the power sharing agreement between the largest companies and government bureaucracy.

Wow!  How times have changed!  I vividly recall the 1980 Republican Primary when John Connally was regarded as “to pro big business,” a stance today that is more in line with the Progressive leaders of the Democratic Party.

As remarked several times, globalism is dead, replaced by nationalism, nationalism that favors Main Street (aka value and smaller capitalized companies) America.  This change has now occurred in most levels of local, state and federal government.

In other words the electorate has spoken and their comments are tectonic, a tectonicy that has yet been factored into equity and debt prices.  I rhetorically ask will today’s consumer mantra of “price being the only determinate of a purchasing decision” also change, the result of potentially higher inflation because of Main Street being favored over Wall Street?

If one is a Jeff Gundlach or Bill Gross acolyte, the answer is yes as both have made pronouncements that the 30-year bull market is over.  If equity prices follow debt prices, a view that was the educated mantra of 25 years ago, so is the bull market for large capitalized growth issues for interest rates are the largest component of valuation formulas.

Commenting upon yesterday’s market action, oil advance almost 2% as Saudi Arabia announced greater production cuts than were mandated in last November’s OPEC accord.  The NASDAQ which perhaps is now representative of the companies that may be hurt the most by Trump policies fell about 0.4%.  The Dow was off about 0.25% and Treasuries advanced nominally in price.

Last night the foreign markets were up.  London was up 0.33%, Paris up 0.87% and Frankfurt up 0.61%.  China was down 0.21%, Japan up 0.80% and Hang Sang up 0.47%.

The Dow should open quiet ahead of some money center bank earnings.  The 10-year is up 4/32 ot yield 2.35%.

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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.