The Election is about 40 days away.  My first recollection of a Presidential election was 1972. My parents were ardent McGovern supporters and I still have a “McGovern” lapel pin that was affixed to the refrigerator.  President Nixon won in a landslide in election that I was later taught in college classes 10 years later that McGovern was too early for the times.

Fast forward to today.  In my view the most consequential election in two generations will occur.  The acrimony and vitriol are intense.

The Democratic Party has adamantly stated the President is attempting to rig and steal this election, planning on destroying American Democracy.  According to the Democratic Party this election determines whether America survives as a free nation or spirals into right wing authoritarianism.

On the other hand, the Republican Party asserts that Joe Biden is a stalking horse for the radical progressives who want to destroy the Republic by imposing democratic socialism, defunding the police, raising taxes and taking way private health insurance among other statist policies.

There are ample “facts” available via the blogosphere to support all confirmation biases.

Perhaps the appropriate comment to make if both assessments are correct, the American people would be worse off no matter who wins.

The country, the economy is bigger than one election or one person.  Donald Trump is a symptom not the cause of today’s environment.  For a myriad of reasons, globally the multipolar and interdependent world of the last 30 years is under massive pressure.  The Establishment, defined as who is in power or controls the wealth is fighting a galactical change, a galactical change that threatens trillion of dollars of sunk costs.

There are several forgone conclusions.  A “blue wave” is possible.  The vote will be to close to call and the results will not be known for weeks.  Violence is all but a certainty.

Typically, forgone conclusions do not occur.

Who I am supporting and think and who is going to win is meaningless.  What I do think is not meaningless is the odds the outcome will be definitive are in excess of 60%.  Is this a radical thought?  No.  It is consistent with the outcome with past Presidential elections which were viewed as the most consequential in a generation.

Changing topics to the markets, equities led by technologies traded lower between 2% and 3%.  In my view, there was no new catalysts as FRB Chair reiterated past remarks, remarks confirmed by other Fed officials.  There was some positive COVID vaccine news that was ignored.

Some pointed to the company wide outage of Tesla’s network that disabled both the company and owners, an outage that some are stated was the result of a “hack,” shattering the illusion of invincibility of our connected culture.

Others believe the decline was the result of a possible delay in additional stimulus because of the impending Supreme Court nomination fight.

Regardless of the cause, Bloomberg reported yesterday “fast money quants are being whipsawed from meltdowns and melt ups like never before.”  A Societe Generale benchmark for this investing group known as commodity trading advisors (CTAs) is down over 4% YTD.  This is yet another fail safe investing strategy that has failed, perhaps the result of the similarity of the algorithms.

Last night the foreign markets were down.  London was down 0.32%, Paris down 0.09% and Frankfurt up 0.13%  China was down 1.72%,  Japan down 1.11%  and Hang Sang down 1.82%.

The Dow should open flat.  The 10-year is up 1/32 to yield 0.67%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. 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. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.