The market priced-in better prospects for Trump after the ruminations and perspectives, following the Pennsylvania assassination attempt. The shooter did not have a strong internet presence (barely noticeable), that diminishes a few comments in media suggesting it's a reflection of online brainwashing.

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However there probably were some brainwashing attempts, both political sides regularly get accused of it, and I think we all know where recent demeaning or below-the-belt punches were thrown. In a sense it's a political system that got extremist with polarization, feeding on conflict and histrionics. And then this. It is a shock back to civility, even if temporary. It also enhances prospects of the Trump/Vance ticket, which is more 'pro' small business than big mega-corps. In that essence this could support small-caps and correct multinational excess as well. (Vance has backing from a few key Silicon Valley conservatives.)

We’ve never had more power to directly communicate with each other, but it seems increasingly difficult to see each other’s humanity. There has been an epiphany in 2 days of reflections (I shared a handful on 'X' over the weekend of uncertainty), and these continue (especially involving security lapses).

The market Indexes (and probably most portfolio managers) have leaned just a bit more towards favoring a Republican Administration (omitting personality aspects), as the normal expectation is business / corporate friendliness. That was the case before the calamity this weekend, and the market already was a continuation pattern that was 'broadening out' somewhat.

Nothing changed. If anything, the assassination attempted didn't assure that a Trump landslide will ensue, although people are saying that. We imagine that had the bullet not 'merely' grazed his ear, the response would be total chaos. I do recognize the biggest changes in 'tone' have come from 'media' and some amelioration plaudits by major politicians, saying what should have occurred before. Some of the toxicity to politics has been quieted, but for how long?

An interesting analog to general perceptions of the two political parties exist, and at some point could impact the market Indexes, but help individual stocks that are domestic-centric. I'm referring not just to the trend toward 'tariffs', as is inflationary 'but' a need to protect National Security and more. I would toss aside the U.S. Chamber of Commerce head, who appears on TV to tell folks how bad the tariffs are for 'small business'. How disingenuous can she get? At the same Biden's Commerce Sec'y. does have it right, she protects US firms.

If there's a correction alternative (should be soon, if not starting now), it might be 'broad weakness' in the S&P and NDX particularly, but not lasting a long time. Our new VP candidate has opined for breaking-up big tech, sure, tariffs (fairly bipartisan), and other 'America first' policies that may genuinely it seems be of help to this Country, but not for mega-cap earnings over a year or so. This isn't entirely set-in-stone, but keep in mind you have a Chamber of Commerce that many small businesses left long ago (since they represent the opposite of America first), and a possible incoming Administration focused on reestablishing small business prosperity but restrains big-cap profitability. Studying economic history suggess such a cycle would ultimately be favorable.

Market X-ray: 

An already strong position of Trump is beyond fairly formidable. So that begs the question, as to who runs for the Democrats, 'if' Biden retires from the campaign, as is still an issue with some fluidity. Not a market factor, we did get yield-curve steepening, and perhaps marginalized Biden's tenacity at holding-onto his candidacy.

My view has been (for many months) that you would not crash the market, as it is pre-crashed aside form the momentum stocks (magnificent seven plus). I expected (as we got) some broadening in July, but it's not really sufficient yet.

This is continuation and jitters periodically, not more. A bit of reassessing has started, but so far none of it has particularly concerning market aspects. We'll say that selecting JD Vance (based on his corporate policies) emphasizes not just a populist tone, but opposition to 'pension nationalism', which is perhaps the logic behind the labor union's backing for tariffs. Both reasons ok, differing with regard to calculus, for which stocks are helped, and which favor unions.

So yes, I agree that the JD Vance style of economics is 'old style' Republican or even conservative Democrat, and that's part of broadening prospects for a slew of working class small businesses and less so for corporate leaders. (By the way his views dovetail a bit with Elon Musk & Peter Thiel, so there's that.)

So, there's a lot to process; inflation coming down, the Fed likely to move we think sooner rather than later, and a political upheaval which reaps scorn on a few politicians and some media, that have been harsh to the point of toxic as regards diatribes against their opposition. The American people are tired of it.

Is this oddly enough a scenario, if not perfect, for market stability and gain. In our view this election year has been that, albeit so far with extremely minimal broadening of participation. However that mitigates against a major calamity that takes the broad list down, even if shook the Indexes pretty hard. If this is right, probably with a near-sweep by Republicans, you migrate thru the noise, which fortunately hasn't been fatal to anyone so far, and that's good news.

Bottom-line: 

Whether a Trump or Biden Administration prevails, the market is pricing-in a Trump victory, although we don't want to get Malthusian about it. I see excessive price gains in a few areas, but a time of lower regulation tends to be favored by the market, and certainly defense spending will be a focus as that's likely whether or not you get a Republican sweep in the Elections.

So, we try not conflating the political shifts with current or geopolitical moves, but everything is nuanced, and both parties talk of strong tariff application. If anything, the deficit concerns get lip-service from both sides (but not actions), while the Fed Chairman's NY Economic Club chat with David Rubenstein at noon revealed a key: the Fed doesn't need 2% inflation as waiting for that will likely mean they're too tight for too long. Ah ha.

So Powell just pre-announced in a sense. I think they could cut anytime now. Thus, stocks like lower regulations, lower taxes and more defense spending (I am not saying that's all good, just that's what the market prefers). Let's clearly thank Trump's good fortune to turn his head slightly, so he still has it. Imagine if he had not. Then instead of reconciliation in society we'd be confronting lots of entrenched bitterness and possible civil war overtures. Instead 'sobriety' at least for now prevails, and even media got the message (Morning Joe pulled at least for Monday, will return.. and was among the more prolific antagonists) that it was time for calm, if not enduring, at least lets of steam for now.

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