Welcome To The Official Start Of The 2018 Midterm Elections

By: Kent Engelke | Capitol Securities

Yesterday marked the official start of the 2018 campaign season. I believe the 2018 midterms are perhaps the most significant midterms in several generations. If there is a significant change in representation, the winning party will declare it as a mandate. Moreover, the tactics that achieved this change will be replicated in the 2020 presidential election.

The above statements should not be viewed politically for such is human nature. The tactics of the winning side are mimicked under the simple guise that if it worked for them, it will work for me.

Speaking of mimicking or trend following, AMZN is up an incredible 73% YTD, increasing in value by over $400 billion in eight months. I cannot comprehend this absolute dollar increase. To put this number into perspective, the increase in AMZN shares is greater than the capitalization of 495 members of the S&P 500.

To put it another way, the increase in AMZN’s value would rank it as the thirtieth largest GDP in the world and the increase is about the same as Norway’s GDP.

The total capitalization of AMZN would rank it as the sixteenth largest country, eclipsing the GDP of countries such as the Netherlands, Turkey, Saudi Arabia and Switzerland.

Wow! To me, this is just numbing especially as its 2017 revenues were only $177 billion earning about $3.03 billion. For comparison, Wal-Mart had revenues of $485.9 billion and earned $14.7 billion. Its revenue would make Wal-Mart the twelfth largest country in the world.

What will happen this week? The economic calendar is heavy this week comprised of several manufacturing and employment statistics that will offer some clarity about economic momentum.

Last night the foreign markets were down. London was down 0.46%, Paris was down 1.35% and Frankfurt was down 1.16%. China was up 1.16%, Japan was down 0.05% and Hang Sang was up 0.94%.

The Dow should open mixed ahead of trade concerns and rising crude. The 10-year is unchanged at 2.87%.

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