The Market Bull – June 24, 2019
The major averages begin the week mixed on disappointing data. Odds of a trade war settlement with the Chinese at the G-20 meeting is slim.
The Chicago Fed National Activity Index or CFNAI gained .4 in May to -.05. 3 of the 4 subcategories improved, the 3-month moving average advanced to -.17. This series has been negative for 5 of the last 6-months and covers about 85% of total economic activity. -.7 is generally regarded as indicating a recession.
The Texas Fed Regional Index went deeper into the red in June falling 6.8 points to -12.1 on weakness in employment. Price data increased but is still fairly low. Concerns about the trade war and a weakening global economy remains center stage.
Domestic data on freight handling and trucking has gone seriously south of late as the trade war and tariffs take a heavy toll. These effects are increasingly showing up at the global level as well with Cass reporting sharp declines in global trade volumes since the turn of the year. Data on airfreight has also shown sharp declines since the beginning of the year as well. From a historical perspective sharply falling trade flows is strongly indicative of recession, or worse.
Standard and Poors 500 Index closed at: 2,945.35 down 5.11
NASDAQ finished the day: 8,005.70 down 26.01
Gold ended trading at: $1,423.30 up $23.20