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Registered Investment Adviser Caleb Lawrence

Despite disappointing data and a lot more sabre rattling the major averages begin the week in fine form entering the final hour with modest gains.

Friday saw the March Consumer Price Index or CPI miss expectations falling .3% for the month on a large decline in energy prices, the year ago rate slipped to 2.4% a fourth consecutive annualized figure above the Fed’s 2% target.

Retail sales also missed on Friday down .2% in March a second consecutive drop on large declines in auto sales and building materials.

Business Inventories gained .3% in March to finish off a solid string of gains for the quarter. That said the days data pushed economic growth expectations below 1% for the first quarter yet again after the Atlanta Fed GDP Now model hit just .5%, a series low.

The New York Fed regional manufacturing index missed significantly in April falling 11 points to 5.2. Also, out today despite nearly drowning in iron ore and steel the Chinese managed to beat economic growth estimates in the 1st quarter after Gross Domestic Product or GDP jumped 6.7% on record steel production and surging real estate investment. The wonders of a command driven economy which also managed to throttle capital outflows as well. The secret economic sauce was a record credit injection during the quarter of nearly 7 Trillion Yuan or about a Trillion Dollars. Continuing their world record credit binge began in early 2009, an impressive run to be sure, I can’t think of any like this that didn’t end in utter disaster.

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