The Market Bull – February 27, 2019
After falling in early trade the major averages recovered late to close about even despite some disappointing economic data.
The Mortgage Bankers Association reports that mortgage activity increased 5.3% last week with refi’s up 4.6% and purchase apps advancing 6.1%. The 30-year contract rate for a jumbo loan slipped to 4.4% as it ticks lower again.
Wholesale inventories continue to climb, driven by tariff fears, with a 1.1% advance in December. That said weakening sales is also contributing to the inventory build, something that will force inventories to be scaled back, should this trend continue, reducing Gross Domestic Product or GDP in the process.
The Trade Deficit advanced sharply in December to 79.5 billion. The largest monthly deficit for 2018, exports fell 2.8% while imports increased 2.4%.
Despite a .1% gain in December Factory Orders missed expectations significantly, having gone essentially nowhere since April of last year. The proxy for business spending non-defense capital goods ex aircraft slipped for a 2nd month down 1%, this marks the 4th decline in the last 6-months as this series continues to come in soft.
The Pending Home Sales Index came roaring back in January jumping 4.6% to 103.2, its best showing in 4-months on large gains in the South and Midwest. On a year ago basis only the Northeast region is positive up 7.6%, at the other end of the scale the West trails badly with a 10.1% decline from a year ago.
Standard and Poors 500 Index closed at: 2,792.38 down 1.52
NASDAQ finished the day: 7,554.16 up 5.21
Gold ended trading at: $1,321.60 down $6.90