The current presidential campaign suggests that many voters are sick and tired of Washington. They want an “outsider” to be the next president.

Many of them seem to have concluded that Donald Trump’s resume fills this job requirement perfectly. They include lots of Republicans and Trump Democrats, many of whom may be voting for the first time in a long time. That’s because they are angry at Washington’s ruling class from both parties. They want to get the bums out.
 
In some ways, this is a revolution by the so-called “conservative country class” that has been disenfranchised by Washington’s elite, who look down on them and purport to know what is best for them. Most importantly, while both sides of the aisle have favored free trade, Trump has scored lots of points with the country class by railing against free trade because it hasn’t been fair trade in his opinion. His anti-immigration theme has also resonated with those who believe that Washington’s elite-favoring policies have sent their good jobs overseas.
 
While the Republican Party has been pulled to the right by the Tea Party and the Trump Party, the Democratic Party has been pulled to the left by progressives and socialists, as evidenced by the success of Bernie Sanders in forcing Hillary Clinton — the party’s likely presidential nominee — to rail against Wall Street, which has bankrolled much of HillBilly’s ventures. In addition, she has also had to champion fair trade. Of course, she isn’t an outsider.
 
The stock market has also turned more populist in recent years. Joe reports that the equal-weighted S&P 500 has dramatically outperformed the market-cap-weighted index since the start of the bull market on March 9, 2009. He notes that the former is up 287%, while the latter is up 203%.

The DJIA, which includes 30 elite Blue Chip stocks, has lagged with a gain of 169%. The outperformance of the equal-weighted S&P 500 actually started on March 27, 2000 immediately following the peak of the bull market of the second half of the 1990s, when large-cap Tech stocks outperformed the rest of the market dramatically.
 
So the current bull market has been very democratic, with broad participation by lots of stocks in the S&P 500. I asked Joe to do a similar analysis for the S&P 400 MidCaps and the S&P 600 SmallCaps. He found democratic trends in those segments of the stock market as well, though not as dramatic ones. Since the start of the current bull market, the ratios of the equal-weighted to market-cap-weighted for the S&P 500/400/600 are up 27.8%, 10.3%, and 14.7%.
 
Here’s the rub: If Trump wins and actually succeeds in pushing an anti-trade agenda and pushes out 11 million illegals, the result could be a very populist bear market, with all shares getting equally pummeled.

Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research. To read more of his blogs, CLICK HERE NOW.