The Market Bull – January 6, 2020
Fear of dramatically escalating tensions in the middle east made for a choppy trading session. The major averages closed with small gains.
The Bureau of Economic Analysis or BEA reported that new vehicle sales fell 2.3% in December to 16.7 million units annualized. For the year vehicle sales declined 1.4% to 16.97 million units in 2019. While sales have slipped a bit of late, 2019 was the 7th best year for sales based on BEA data going back to 1976.
Reis reports that the office vacancy rate was unchanged in the 4th quarter of 2019 at 16.8%. Both the national average asking rent and effective rent, which nets out landlord concessions, increased 0.5% in the fourth quarter. At $34.31 per square foot (asking) and $27.87 per square foot (effective), the average rents have increased 2.6% and 2.7%, respectively, from the fourth quarter of 2018.
One of Trump’s more grandiose claims about the trade war was that those subject to tariffs would be the ones paying for them, i.e. our trading partners and primarily the Chinese. While of course they did pay for the tariffs up front it was naïve at best to think that these costs weren’t ultimately going to be borne by consumers. A recent paper by the National Bureau of Economic Research or NBER shows that U.S. importers and consumers were the primary payers of tariffs in 2018. I can’t say as I’m surprised, honestly did Trump really think the Chinese etc., were going to pay our tariffs out of the kindness of their hearts?
Standard and Poors 500 Index closed at: 3,246.28 up 11.43
NASDAQ finished the day: 9,071.46 up 50.70
Gold ended trading at: $1,567.70 up $15.30