The Market Bull – October 10, 2019
The major averages couldn’t hold all of their early gains, closing modestly higher. On little news of significance, save another round of trade talks with the Chinese.
The September Consumer Price Index or CPI was unchanged. On a year ago basis it slipped to just 1.7% on a large decline in energy prices that negated sharp gains in healthcare costs. Like other recent economic data this should motivate the Fed for additional rate cuts.
As usual the Federal Open Market Committee Meeting Minutes were subject to their usual dissection. Some notable comments include an observation that trade tensions and geopolitical uncertainty were clouding the economic outlook and increasing downside risks. Protracted weakness was noted in investment spending, manufacturing production, and exports. Also noted, expected annual revisions to employment growth would see lower numbers. The Fed’s balance sheet jumped by $184 billion over the past month, to $3.95 trillion, mainly a result of the New York Fed’s repo operations. Goldman Sachs expects the Fed to resume full on asset purchases, aka Quantitative Easing, in the next few months at the rate of 60 Billion per month. So much for the “everything is great” narrative.
Standard and Poors 500 Index closed at: 2,938.13 up 18.73
NASDAQ finished the day: 7,950.78 up 47.04
Gold ended trading at: $1,498.30 down $14.50