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Registered Investment Adviser Caleb Lawrence

Despite little data the major averages moved sharply higher in early trade to enter the final hour with solid gains.

The Fed’s Beige Book on regional economic conditions came out late yesterday and reported essentially more of the same modest to moderate economic activity. Of note the report cited strong auto sales and manufacturing activity, yet both have slowed markedly of late and feature as part of the reason 1st quarter economic growth estimates got cut below 1%. Once again the narrative is more important than the facts in the modern era.

The Philadelphia Fed regional index fell 10.8 points in April to a still strong 22 on declines in new orders and shipments. As the days go by the Trump reflation trade continues to lose momentum becoming increasingly at risk of turning into the Chump trade as like most politicians he is long on rhetoric and promises and woefully short on substance. That said the looming Federal budget and deficit showdown set for the end of the month should prove a real test of his ability to actually get something done.

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