The Market Bull – March 28 2019
Generally disappointing but not overly significant data sent the major averages into the close with small gains, following volatile early trade.
Final 4th quarter Gross Domestic Product or GDP missed expectations coming in at 2.2%. For all of 2018 the economy grew 3% a fairly solid figure in the post Great Financial Crisis period since 2007, but nothing to really write home and tell the folks about. Given that 2019 is off to a very weak start and absent debt funded tax cuts I seriously doubt that 2019 GDP will be able to hold a candle to 2018. Downward revisions to consumer spending, state and local government spending, and business fixed investment were only partially offset by a downward revision in imports. Real disposable income growth accelerated to a respectable 4.3% from 2.6%. A decent report to be sure but with softening incoming data a repeat in 2019 will be a tough act to follow.
After a huge rebound in January pending home sales resumed their slide in February falling 1% for the month on a very large decline in the Midwest and to a lesser extent the Northeast. The Western region posted a 4th consecutive gain in pending home sales with a .5% advance. On a year ago basis this series grows increasingly negative with all four regions going backward led by the West with a 9.6% decline.
The Kansas City fed regional index jumped 9 points in March to 10 on broad based strength. Price data continues to slip and has become very moderate at this point. Survey respondents once again cited tariffs as an ongoing concern with quite a few noting price increases passed onto consumers as a result.
Agricultural prices recovered all of last month’s gain and then some advancing 4.9% on a big jump in crop prices. Livestock and related prices fell. This series remains largely negative over the last 12-months.
Standard and Poors 500 Index closed at: 2,815.44 up 10.07
NASDAQ finished the day: 7,669.17 up 25.79
Gold ended trading at: $1,296.40 down $20.50