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Is art imitating life or is it the other way around? You make the call.

What was once the world’s biggest stock is supplanted by a company that nobody has heard of.

One likely presidential nominee suggests that the way to cut U.S. borrowing costs is to pay higher interest rates. Meanwhile, he declines to reveal his tax returns, which would provide a glimpse into his own vaunted financial prowess.

His likely opponent’s family foundation, meanwhile, apparently directed millions to a company controlled by a crony who also got a federal subsidy for his scheme. And said opponent keeps losing primaries to her remaining challenger, a crotchety Commie.

A bombastic television stock tout is taken hostage by an irate viewer who mistakenly regards the former’s investment recommendations as something other than entertainment.

Only the last is a work of fiction: the film Money Monster, which portrays the hostage-taking. However, the wackos who threaten those in the media, out of anger or a deranged compulsion, are all too real, unfortunately.

As for the other developments, they really did happen last week. The stock market value of Apple (ticker: AAPL) fell below that of Alphabet (GOOGL), whose name would draw blank looks from most folks on the street. That is, until they were informed it was the corporate identity of Google, the ubiquitous provider of search, mobile operating systems, and videos they waste—I mean spend—time watching.

Meanwhile, The Wall Street Journal reported that the Clinton Global Initiative had arranged a $2 million commitment to a for-profit company with ties to the Clintons. As had been previously reported, the foundation also has received donations from governments and corporations that had business with Hillary Clinton when she was secretary of state and that could be affected were she to become president. Also, Vermont Sen. Bernie Sanders notched another primary win last week, in West Virginia.

As for the all-but-certain Republican presidential nominee, Donald Trump, he sought to clarify his thoughts on reducing the financial burden of the U.S. government’s debt, which was discussed in this space last week. His idea is that the Treasury would be able to repurchase its outstanding debt at a discount and refinance it with new notes or bonds.

Those discounts would result if the price of outstanding bonds fell, which would come to pass if interest rates were to rise. In which case, Uncle Sam would be issuing debt with coupons of 3% to refund old securities with coupons of 2%. So, the plan of a putative financial genius is to pay higher interest rates to lower interest costs.

Truth can be stranger than fiction. As for the truth about the Donald’s taxes, that might not be forthcoming until after the election. His tax rate is “none of your business,” he told ABC’s Good Morning America on Friday.

The relevance to stock market investors so far is circumstantial. Yet the folks at Bespoke Investment Group observe an uncanny correlation in recent months between the Standard & Poor’s 500 index’s movements and the probability of the Democratic candidate winning the presidential election, as tracked by the Iowa Electronic Markets. The IEM lets bettors place real money on expected outcomes, as opposed to opinion polls, in which talk isn’t just cheap, it’s free.

In any case, the probability of a Democratic win in the IEM marketplace plunged at midweek to 62% from 74%, its biggest one-day drop this year, BIG observed. That put it back near the level recorded around the S&P 500’s low on Feb. 11. If the decline isn’t reversed, which was the case as of Friday, BIG suggests that it could be a “yuge” shift in sentiment. “If that is the case, unless the market begins to get more of a sense of clarity on the policies of Donald Trump, it could cause some problems for equity prices,” the advisory group concluded.

On that score, Greg Valliere, the veteran Washington insider who’s the chief strategist at Horizon Investments, lifted his odds of a Trump win to 45% from 35% on Friday. Washington has capitulated to the Donald, he wrote after the candidate’s sit-down with House Speaker Paul Ryan.

The latter, Valliere told clients, “wants Trump to listen to true conservatives, and Ryan wants to be the messenger (and the 2020 nominee). But the House speaker is isolated; virtually every Republican in this town has surrendered to Trump; even archenemy Lindsey Graham had an amiable 15-minute phone chat with him.”

Hillary Clinton has stalled, he continued, with negatives close to those of Trump’s, owing to Sanders, the latest revelations about the Clinton Foundation, and “the curious performance of FBI Director James Comey, who keeps talking about the FBI probe [of her use of personal e-mail for government documents], keeping it in the media limelight.”

The bottom line for the markets, according to Valliere, is that it’s time to start factoring in a potential Trump presidency and its policy implications. Would the Donald risk a trade war, a fight with the Fed, and suffer geopolitical stumbles? Or would everything be open to negotiation, so there might be tax and trade deals that the markets could live with?

The biggest problem for Hillary Clinton, on the other hand, is that the country “clearly wants a change, and despite her gender, she seems incapable of playing the role of change agent.” So, uncertainty reigns, Valliere concluded, and the markets will have to deal with it for nearly six more months. That’s reality, not fiction, if you can believe it.

“I CAN GET IT FOR YOU RETAIL” was sounding almost alluring last week. That was following the steep markdowns in shares of an array of retail stocks after the companies revealed nearly uniformly dreadful first-quarter results. But not entirely alluring, given that they also indicated little prospect of future improvement.

Macy’s (M) led the parade, and not in the way the retailer likes to on Thanksgiving, plunging 15% on Wednesday after a massive miss in first-quarter earnings and an uninspiring outlook. That wasn’t an isolated case, as a double-digit hit to Kohl’s (KSS) showed. And Nordstrom (JWN) didn’t escape the selloff; its results were especially revealing, with a weak showing at its traditional upscale stores, but a similar rise at its Nordstrom Rack lower-price outlets.

Earlier on Friday, concerns about the demise of the consumer seemed to be allayed by the Commerce Department’s tally of April retail sales, which showed a larger-than-expected jump of 1.3%.

The government report includes spending in lots more places than department and clothing stores. Even excluding automobile sales, the total was up 0.8%. Leaving out gasoline, which cost more last month, sales climbed 0.6%. And online shopping (along with mail-order purchases) was up 2.1% in the latest month and 8.1% in the latest four months, lending credence to the notion that Americans still are shopping, just not in stores, but instead at the likes of Amazon.com (AMZN).

The rosier hue of Commerce’s seasonally adjusted numbers, especially in contrast to the downbeat results from the retailers, inspired positive media portrayals that “may be getting a bit ahead of themselves,” according to the Liscio Report. Retail sales are a “noisy” series and subject to more revision than most government data.

The markets appeared also to be taking the government numbers with an appropriate dose of salt. An early pop on Friday after retail sales were released faded quickly, with the S&P 500 losing 0.9% on the day. That left the large-cap benchmark down for the third straight week, along with the Dow Jones Industrial Average, although the cumulative drop is only in the 2%-plus range. The Nasdaq Composite notched its fourth consecutive losing week.

While consumer-discretionary stocks lost ground, consumer staples continued to maintain their extraordinary valuations, especially given their quite ordinary growth outlooks. The likes of Procter & Gamble (PG), Colgate-Palmolive (CL), Clorox (CLX), Coca-Cola (KO), McDonald’s (MCD), General Mills (GIS), and Kellogg (K) command price/earnings ratios north of 20 times forward estimates, 25% more than the S&P 500 companies.

That’s because they’re viewed as stocks with bondlike characteristics: defensive qualities and attractive dividends. The same holds true with a similar group, utilities. At least one of them, Consolidated Edison (ED), took advantage of investors’ ardor to issue 8.8 million shares to raise $629 million in gross proceeds. At the same time, Con Ed issued $500 million of 2% five-year notes, with a rating of triple-B-plus from S&P. Thus, the utility issued stock with a dividend yield of 3.8%, almost twice the yield of the medium-term debt. Hmm.

Richly priced consumer-staples and utilities stocks have been the object of investors’ desires, even as they flee the equity market overall, as fund-flow data suggest. Meanwhile, bond yields continue to inch lower, with the Treasury yield curve flattening as a result of longer-dated yields falling in the face of steady short-term rates. Moreover, long-term municipal-bond yields hover at historical lows.

This flight to safety suggests a lack of confidence, even as various Federal Reserve district presidents last week were contending that conditions were in place for another interest-rate hike as soon as next month’s meeting of the Federal Open Market Committee. For their part, the markets think that a hike in December is only an even-money bet. But they have a lot more to worry about ahead of November.

E-mail:randall.forsyth@barrons.com

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