So far today, the largest infrastructure stocks are down substantially. Jacobs Engineering Group (JEC), Fluor (FLR) and Chicago Bridge & Iron (CBI) are all down by about 1.5%, vs. the S&P 500 index decline of about 0.5%.
The rest of the infrastructure sector is performing similarly.
This is probably a reflection of "buy on rumor, sell on fact." The rumor being Donald Trump winning the Republican nomination and the fact being that, as of today, that's most probably a fait accompli.
Speculators are most likely assessing the prospects for what a Trump vs. Hillary Clinton campaign will entail. The prevailing belief among political pundits and polls is that Clinton will defeat Trump.
The fundamental basis for this belief is grounded in two assumptions. The first is that the Republican Party has been fractured by the campaign and will result in many traditional Republican voters abstaining from voting in November.
The second is that Bernie Sanders' supporters will overwhelmingly vote for Clinton.
Neither of these should be assumed, however.
There are two points from Trump's speech last night that are instructive on this. The first is that he specifically referenced his intention to focus fiscal spending on physical infrastructure. The second was his statement of: "We're going after Hillary Clinton."
The importance of an announced intention to focus on an infrastructure program is that it is traditionally part of a Democratic Party platform and not a part of a Republican platform.
By moving in this direction, Trump is likely to attract more Sanders supporters than the political pundits are anticipating.
The logical progression in a Trump campaign now is indeed to go after Clinton, as he stated.
The political pundits appear so far to be of the opinion that this will be done on philosophical grounds of his platform vs. hers.
I think that is wrong.
What I think is more likely is that Trump will go after Clinton as a person, rather than simply as a politician.
Since last summer, the mainstream media coverage of the Clinton email scandal and the related fundraising issues has steered clear of directly confronting criminality. It has instead been treated as an issue concerning investigations by the FBI and Department of Justice, and that because these are ongoing, no determination of wrongdoing has been decided, and discussing such is therefore inappropriate.
What's interesting to note is that was not the way the issue was treated by the media last summer. Then, the issue of criminality and the potential for prosecution was discussed vigorously.
The public debate centered on whether or not deleting, and making irretrievable, 30,000 emails was a violation of various sections of Title 18 -- Crimes and Criminal Procedure, of the United States Code.
That issue has not been resolved legally as the FBI investigations have dragged on and Attorney General Loretta Lynch has refused to address the issue while that continues.
I think it is likely Trump's campaign will focus on the totality of the issue and attack Clinton, the FBI, the DOJ, Lynch and the governing establishment broadly.
In so doing, the media will be forced to confront the issue directly and Trump will provide a focal point for the competing factions of the Republican Party to rally around.
More importantly, the issue will force Clinton supporters to confront and perhaps admit their own Machiavellian culpability in helping to advance the career of a politician who may have knowingly committed crimes against the state, and as such against them.
If Trump takes this approach, he'll also be telegraphing that he does not intend to adhere to the unwritten quid pro quo between the political parties of not pursuing legal recourse against members of the previous administration.
That signal will also put pressure on Attorney General Lynch to accelerate the advancement and resolution of the case and, if the evidence warrants, to pursue legal recourse against Clinton.
As all of this unfolds, I think it is likely as well that individual voters of both parties and independents will want to distance themselves from Clinton and the prospect for a Trump election will increase.
As that occurs, the infrastructure stocks should regain the positive momentum they experienced so far this year.
Lastly, I do not offer any of this in a politically partisan fashion. It simply appears to me to be the most logical course of action for Trump to take and how the responses to it will evolve.