The Market Bull – February 13, 2020
The major averages close with small losses as Coronavirus fears return, or perhaps it’s the Fed draining liquidity through the Repo Market. One excuse is as good as the next.
The Consumer Price Index or CPI advanced .1% in January, missing expectations on a notable decline in energy costs. For the year the CPI rose 2.5% a 3rd consecutive annualized figure at or above the Fed’s desired 2% target with energy and services costs driving the gains.
CreditForecast.com continues to report increasing consumer debt levels as they advanced 4.15% or 34 billion in January. This pushed the outstanding consumer debt balance to 13.6 trillion a figure 4.1% higher than a year ago. All types of debt, credit card, auto and mortgages continue to advance briskly following the trend of the last several months. Delinquency rates remain very low at 2.65% but have increased somewhat of late for auto loans and credit cards.
The latest report on the Treasury Budget shows a deficit of 32.6 billion in January, a figure nearly 3-times expectations. Through the first 4-months of fiscal 2020 the Federal deficit is up 25.43% to 389.2 billion. Federal tax receipts have grown 9.5% on a year-ago basis to $372.3 billion but outlays jumped 22.2% over the same period to 404.9 billion. Medicare +69.2% and Medicaid +12.1% spending both continue to grow dramatically as the failure to reign in healthcare costs threatens to visit bankruptcy nearly across the board with respect to government, pensions, individuals and businesses. Soaring budget deficits are also driving higher debt service costs for Uncle Sam despite falling interest rates as they rose 8.3% year over year.
Standard and Poors 500 Index closed at: 3,373.94 down 5.51
NASDAQ finished the day: 9,711.97 down 13.99
Gold ended trading at: $1,579.00 up $7.40