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Registered Investment Adviser Caleb Lawrence

The major averages look for direction mid-week on a lack of consistency coming out of Washington. Durable Goods orders missed consensus in March with a .7% gain. The proxy for business spending non-defense capital goods ex-aircraft posted a 3rd consecutive month of meager gains up just .2%.

The Kansas City Fed regional manufacturing index gained 6 points to 20 in March on strength in production as it more than tripled despite employment falling notably, this index is one of the few still riding the post-election Trump trade.

Trumps much touted tax cut features a lot of rhetoric and little substance as has been his style. The initial rough outline follows the classic republican play book based on the Laffer curve, cutting taxes creates short term deficits in favor of longer term growth and increased tax revenues, trouble is it doesn’t work and adding another 5-7 trillion to the deficit is likely to prove exceedingly unpopular and nigh on impossible to get through Congress. At least it serves to distract the markets from all the excitement in Korea.

One of the notable trends seen very late in the Dot-Com boom was that the market got narrower and narrower as the top approached with just a handful of companies driving index gains towards the end. Fast forward to the present and a recent piece by Bloomberg noted that just 5 companies, Apple, Facebook, Amazon, Alphabet and Microsoft accounted for some 45% of the last 500 point gain on the NASDAQ. History may not repeat but it often rhymes.

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