The Democratic Party’s clean sweep of California’s once deeply conservative Orange County brought several new far-leftists into the U.S. House of Representatives. One of the most radical is the 49th District’s new congressman, Mike Levin.
The freshman representative has already joined the communist-allied Congressional Progressive Caucus — not a surprise, considering that socialists and communists helped get Levin elected.
Levin beat Republican Diane Harkey by nearly 14,000 votes, so the Marxist-help was probably not decisive in the general election. However, one of Levin’s socialist supporters has admitted that they engineered his nomination by out-maneuvering his Democratic primary opponents.
The 49th District was always a major target for the left. When incumbent Darrell Issa retired, it became a top priority. Even before the candidate primaries had been decided, a group — Flip the 49th! Neighbors in Action — was created specifically to turn the very marginal seat blue.
“The closest Congressional race in the Country is in our backyard. In 2016, the Republican won by just 1,621 votes. In order to stop the corrupt and chaotic agenda of the Trump Administration, the Democratic Party must win control of Congress. The path to winning back the House runs straight through our home in California’s 49th Congressional District,” states the group’s website.
Flip the 49th held rallies, knocked on doors, and phone-banked for Levin. They were the backbone of his campaign.
In the 2018 election cycle, about 30 APALA canvassers knocked on doors in Las Vegas from the end of September. According to APALA coordinator Kathleen Flores, the canvassers backed specific candidates like Democratic Rep. Jacky Rosen in her bid to unseat Republican Sen. Dean Heller.
“We’re trying to let her win, Jacky Rosen, because she’s fighting for higher pay, higher minimum wage, and good education, better health — that’s why I’m here,” Flores told the Las Vegas Sun.
With 72,000 registered Asian-American or Pacific Islander voters in Nevada (up more than 160 percent since 2000), it makes sense for the left to target this significant Democrat-leaning voter bloc in a Republican-tilting state.
The APALA canvassers were not working for love. They were paid $15 an hour to brave the Nevada fall heat through a $160,000 grant from the Service Employees International Union (SEIU).
Despite Heller leading in the polls through most of the race, Rosen’s winning margin was a comfortable 50.4 percent to Heller’s 45.4 percent — about 49,000 votes.
By: Kent Engelke | Capitol Securities
The G-20 meeting is over.
I believe the two greatest issues facing the markets for the intermediate future is monetary policy and the normalization of the Fed’s balance sheet. Both events will have a direct impact on earnings and valuations.
Regarding monetary policy, in my view, the markets have been spoon fed by the FOMC essentially telegraphing its intentions for the proceeding year. This has now changed, reverting back to normalcy where the data will dictate policy.
In short, the Central Bank is signaling to investors a hard truth about relying upon contradictory economic data; there are no easy answers anymore. It is going to be choppy with perhaps surprises.
The FOMC is attempting to be flexible but such flexibility will create uncertainty.
Commenting about asset sales, the Federal Reserve is now doubling the number of security sales. How will such increases in bonds available for sale impact prices especially as demand for monies by the Federal government is rising?
Higher interest rates dictate lower equity valuations unless corporate cashflows rise at a greater rate to offset the negative impact of potentially higher rates.
And then there are earnings itself. How will trade and interest rates impact the profitability of the over-owned and highly-valued technology shares? FAANG is down about 25% from its early October peak, the result of earnings that did not meet sky-high expectations.
According to the Consumer Technology Association, approximately 80% of US cell phones and 92% of US tablets and laptops are imported from China.
As noted many times, FAANG comprises a large minority of the popular indices capitalization. Late last week, legendary Vanguard Chairman John Bogle stated that he is expecting a 1.75% total annual return in a 50/50 blended account over the next decade. His rationale is similar to the concerns above; lofty valuations, massive over-ownership, rising interest rates, shrinking margins and trade concerns.
Change is the only certainty, however, I believe the financial markets are not prepared to handle change given the massive proliferation of passive investing which by definition states that past performance will be indicative of future performance. The big get bigger and the small get smaller unless there is some event that disrupts preconceived expectations.
As indicated above, the Fed has jumped off its predictable path into a policy of wilderness. Expectations will change. How will such changes be viewed?
This week is a data-filled week that can alter expectations. There are numerous employment reports, manufacturing and non-manufacturing surveys and various trade statistics. Moreover, there are some second-tier technology companies posting results as well as an OPEC meeting.
How will all be interpreted?
Last night the foreign markets were up. London was up 1.76%, Paris was up 1.06% and Frankfurt was up 2.27%. China was up 2.57%, Japan was up 1.0% and Hang Sang was up 2.55%.
The Dow should open sharply higher on the trade truce. Oil is up a 5% as Saudi Arabia and Russia extended their pact to manage the market and Canada’s largest producing province ordered unprecedented output cuts. The 10-year is off 13/32 to yield 3.04%.