Yesterday, all sectors of the S&P 500 were higher, and most have remained higher for the year. For the most part, the market has been spinning its wheels. Energy has come on strong with the rebound in crude oil while utilities are still outpacing the broad market. There was a time this year when that sector was up more than 20%. 

I suspect if the major indices break out to new highs, we’ll see more rotation out of the safety of utilities.

One winner in that rotation would be consumer discretionary names.

Ironically, the consumer discretionary names that set the pace were up because of consumers from outside the United States. Harley-Davidson (HOG) soared 10% and Netflix soared (NFLX) 20%.  Overall, it feels like the earnings tide is turning higher. Perhaps this will be the inflection point that puts the breaks on the slide, which began after earnings topped out at an all-time high in the fourth quarter 2014.

Debate Night

"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"

The New Colossus
-Emma Lazarus

One of the topics tonight will be immigration, which has been a hot-button issue. They’ll focus mostly on illegal immigration. Still, more and more Americans are fretting over the fact that even legal immigrants are taking jobs natives could perform.  (This situation becomes even thornier when considering the impact of technology and growing thesis that the nation has reached its peak for workers.)  

Of course, America is built on immigration and takes enormous pride in being a successful melting-pot not matched by other nations. Last week, Americans were awarded seven Nobel Prizes, of which six went to people born outside this country.  The same dynamic comes through in the latest Forbes 400 2016 list where forty-two members are immigrants.

Currently, 43.6 million immigrants live in the United States, representing 13.6% of the population. However, new research really underscores the growing impact of immigrants in America.

Nearly, 65 million U.S. residents speak a foreign language at home, up 180% since 1980.  This is a huge development and presents an enormous test for the nation.  Europe’s failings are said to be the inability to assimilate its Muslim and North African migrates and refugees while in America. The history has been more about acculturation.

With acculturation, it sees immigrants maintain customs such as food and certain ceremonies in   families that (eventually) speak primarily in English.

Then there’s the economics of immigration, which has been focused largely on the impact to local taxpayers of illegal immigrants. The fact is that legal immigrants are opening businesses at a faster pace than native-born Americans. And their children are scoring very high academically.

Just as immigrants; Albert Einstein helped us win WWII, and legal immigrants will help win the economic battle of the next century but there will be friction. 

Political Impact

There is data showing that immigrants vote overwhelmingly as Democrats and that might explain the rapid evolution of formerly deep red states into purple and perhaps now blue states. Look at states with the largest percentage increases in foreign-language speakers from 1980 to 2015:

• Nevada (up 1,005%)
• Georgia (up 916%)
• North Carolina (up 729%)
• Virginia (up 460 %)

Immigrants are reshaping America. I think they love being Americans.