By: Kent Engelke | Capitol Securities

Equities were mixed in thin trading. The 10-year stalled just below 3% as all assess the outlook for trade relations, tension in the Middle East and rising crude.

Some are perplexed why the averages are struggling given the increase in corporate earnings, near record levels of share repurchases and synchronized pick-up in global growth. I think the answer is relatively simple. It is about a change in monetary policy that questions valuations. Interest rates are the greatest factor of most valuation formulas.

As written a gazillion times, 50% of the volume is the result of algorithmic trading and 40% is done by ETFs/Indexing. If a major component becomes negative, prices will struggle.

I reiterate my long held thesis that monies are now gravitating back to Main Street from Wall Street, the inverse of the last 10 years. In my view, the massive exodus of funds to Wall Street is/was a major catalyst for the populist movement that has impacted all industrialized democracies.

The outcome of this transition is infinite. Economic nationalism and patriotism has been around since the formation of mankind. Multipolarity and interdependency was an idea birthed about 30 years ago and reached its apex under the Obama/Merkel/Sarkozy triumvirate.

Last night the foreign markets were mixed. London was up 0.26%, Paris was up 0.17% and Frankfurt was up 0.12%. China was up 0.91%, Japan was down 0.21% and Hang Sang was down 1.23%.

The Dow should open nominally lower as oil is up about 1% on Middle East tensions. The 10-year is off 5/32 to yield 3.03%.