By: Kent Engelke | Capitol Securities

The Russell 2000 has now dropped for four consecutive weeks, the longest decline since 2014. As noted several times, these were the shares that were expected to benefit from Trump’s agenda. Consumer sentiment, however, is surging; a surge that I believe is enabling the economy to experience greater than expected growth.

The headlines are inundated about mega-sized corporate CEOs abandoning the President. In an attempt to place this abandonment into proper perspective, last October the Clinton campaign stated that not a single CEO of an S&P 100 company endorsed the Republican nominee. I believed the lack of endorsement was his stance about globalism, espousing economic nationalism which would “gut” the infrastructure that the largest companies have spent billions in creating.

To the best of my knowledge, I am not aware of another time when sentiment surveys were surging at the same time at such levels of animosity and vitriol towards the President. I do think it is correct to write the entire establishment — both the left and the right — are against Trump.

This begets the question — why are sentiment surveys around levels that were last experienced in 2000 or in some cases 1980? Sentiment surveys are the ultimate feedback indicator, defined as not necessarily indicating where we are going, but where we have been.

The political headlines are horrific.

In my view, I think we are at the cusp of radical change. Either the political headlines become entirely irrelevant as the economy surges, or the economy stalls and the headlines are indeed the reflection of society’s emerging sentiments.

I think the former. Sentiment surveys are surging on a reprieve of new regulations. Home values are rising and so is job creation if one has skills. The reprieve of regulations is allowing a nominal increase in monetary velocity. All the above are reasons why the data is suggesting greater than expected growth. All that is now needed is tax reform.

The President has been believed to be metaphorically dead many times before, but only to rebound and accomplish the impossible.

I am a huge Rocky fan. Are we entering into the twelfth round and the growth and regulatory/tax reform does occur? I knew there would be setbacks to turning words into policy, but few would have suggested the path that has occurred.

Markets were listless yesterday as trading was about 19% lower than the 30-day average. Some are beginning to turn their attention to the Jackson Hole Summit where several high profile central bankers are scheduled to speak. The forum begins Thursday.

Last night, the foreign markets were up. London was up 0.68%, Paris was up 0.50% and Frankfurt was up 0.75%. China was up 0.10%, Japan was down 0.05% and Hang Sang was up 0.91%.

The Dow should open quiet, but nervously higher. The 10-year is off 7/32 to yield 2.21%.