The Market Bull – December 21, 2018
Unable to hold their early gains the major averages closed with large losses ending the week with significant declines. Since Monday the Standard and Poors 500 Index has lost 174 points or 6.7% while the NASDAQ plunged 553 points or 8%, entering bear market territory with a decline exceeding 20%.
The final revision to 3rd quarter GDP or Gross Domestic Product saw a slight reduction to 3.4%.
Still some 66% of the growth recorded in the 3rd quarter came from inventory building as firms tried to get ahead of the assorted tariffs set to increase dramatically in the first quarter.
Personal Income advanced .2% in November slightly below consensus, the annualized rate continues to run over 4% with a 4.3% advance from a year ago.
Strength was seen in small business or Proprietors Income and to a lesser extent transfer payments or various social benefit payments, Social Security, SNAP Program and Disability payments.
Personal spending advanced .3% in November on large gains in recreational goods and vehicles, clothing and footwear, and other durable goods.
The inflation measuring Personal Consumption Expenditures or PCE deflator gained just .1% in November on a very large decline in gasoline and other energy goods prices.
On a year ago basis the PCE deflator slipped back below 2% for the first time since February falling to just 1.8%.
Durable Goods orders advanced .8% in November.
The proxy for business spending non-defense capital goods ex-aircraft slipped .6% a 3rd decline in the last 4 months.
Rounding out the day’s reports the Kansas City Fed regional index plunged 12 points to a barely positive 3 in December a 25-month low on weakness in new orders.
Production plunged as did prices though they remain high. Employment data was mixed.
Standard and Poors 500 Index closed at: 2,416.62 down 50.80
NASDAQ finished at: 6,332.99 down 195.41
Gold ended trading at: $1,259.10 down $8.80