The Market Bull – March 6, 2019
After opening about even the major averages fell in late trade closing with modest losses on disappointing but not overly significant economic information. Data on the side effects of the trade war are increasingly negative as is the information on the Trump Administration in general, long on dysfunctional behavior and grandiose claims and ideas that fail to materialize into the desired reality. The hazards of going through life as a bullshit artist writ large. What is it that Abraham Lincoln said? “You can fool all of the people some of the time, some of the people all of the time, but you can’t fool all of the people all of the time”.
Mortgage activity continues to gyrate along with interest rates as the Mortgage Bankers Association reports that its mortgage monitor fell 2.5% last week with refi’s down 2% and purchase apps off 2.6%. The 30-year contract rate for a jumbo loan increased fractionally to 4.41%, still very low by historical standards.
Payrolls company ADP reports a slightly below expectations 183,000 new private sector jobs created in February. Weakness was pronounced in the services sector. Employers continue to cite uncertainty with respect to the trade war with China, large fiscal deficits and an increasingly dysfunctional political leadership for crimping hiring plans.
The trade deficit hit a more than decade high 59.8 billion in December as exports slipped 1.9% and imports gained 2.1%. This and other data points emerging after the government shutdown increasingly paint a picture of the negative economic impacts of the trade war that’s leading to not only very weak advance estimates of 1st quarter economic growth, but likely material downward revisions to 4th quarter economic growth as well. Trumps statements about trade wars being easy to win may come back to bite him on the rear end yet.
The Fed’s Beige book on regional economic activity largely showed more of the same, moderate to modest economic activity in most regions, a tight labor market, economic activity negatively impacted by the government shutdown, while the trade war and tariffs were taking a toll on manufacturing. Nothing really new or surprising once again for the series.
Standard and Poors 500 Index closed at: 2,771.45 down 18.20
NASDAQ finished the day: 7,505.92 down 70.44
Gold ended trading at: $1,287.30 up $2.60