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There will be volumes written about the 2016 election.  There will be libraries created if Trump is elected.   While I am not voting for Donald Trump but rather voting against Hillary Clinton as I believe she acts and believes she is above the rule of law and is protected by the establishment, many at this juncture will concede a Clinton presidency is all but inevitable.

But what if the improbable occurs because of Trump’s scorched earth campaign partially the result according to IBD, for every negative article written about Clinton, there are nine negative articles written about Trump.  Wow, a 9:1 margin!

Democracy is ugly.  It is vitriolic. It is ruthless.  But generally speaking democracy avoids wide spread civil unrest.

If Trump is elected, all in the political and media establishment had under estimated society’s animosity towards government and the establishment.  In a tolaterian society, animosity and bitterness is suppressed hence if strong opposition leadership arises utilizing nationalist fever while emphasizing severe economic distress, revolutions occur.

Is the US undergoing a revolution where the establishment is voted over power?  Is this a radical thought given only 9% have a favorable view of congress and only 10% believe the media?

November 9 will answer this question and as written above, if Trump is elected this would be a tectonic election.

Oh for with it is worth department according to Reuters many young Americans prefer a giant meteor striking the earth rather than a Clinton or Trump presidency.  I wonder what Big Foot thinks as for we all know that according to a NBC poll 14% believes Big Foot exists while 11% believes Clinton is honest and trustworthy.

Returning back to the markets, equities advanced on profit reports and the growing belief equities would be able to withstand a 0.25% increase.  Speaking of profits, according to Bloomberg last month’s profit warnings were the lowest on record.  October’s warnings are about a third of the usual volume.

Is this the result of dumbed down forecasts?  Probably.  The 52 S & P 500 companies that have that have posted results have exceeded expectations by 6.6%.  Revenue beats remain muted with results just 1.3% better than predicted levels.

What will happen today?  The Beige Book and housing starts/permits are posted.

Will all ignore the above and instead focus upon tonight’s debate, a debate that will prove life is stranger than fiction?

Last night the foreign markets were mixed.  London was down 0.21%, Paris down 0.12% and Frankfurt down 0.20%.  China was up 0.03%, Japan up 0.21%, and Hang Sang down 0.38%.

The Dow should open flat ahead of a deluge of earnings, the debate and Beige Book. Oil is up about $1 on an unexpected inventory reduction.  The 10-year is off 4/32 to yield 1.76%.

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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.