The Market Bull – January 31, 2020
The major averages closed with large losses on mixed data. The Coronavirus is declared a national health emergency. Trump’s impeachment is extended. For the week the Standard and Poors 500 Index slipped 21 points or .65% while the NASDAQ gained 59 points or .65%.
Personal income gained a little less than expected .2% in December, a 1.5% decline in small business income was the reason for the miss. The savings rate slipped to 7.6%.
Personal spending advanced just .1% in December as this series has shown a weakening trend during 2019. Spending was particularly soft for gasoline stations, motor vehicles and parts.
The inflation measuring PCE deflator rose .3% in December pushing the 2019 total to a modest 1.6% gain. Durable goods prices continue to fall. Muted inflationary pressures and tepid economic growth will very likely lead the Fed to cut rates further this year.
Employment costs advanced .7% in the 4th quarter and 2.7% in 2019. Gains were fairly evenly distributed with wages up .7% while benefits increased .5%. On a year ago basis costs advanced 2.9% and 2.2% respectively.
Agricultural prices increased for a second month, gaining .8% in December, for all of 2019 prices fell .8%. Meat animals and oil bearing crops advanced well, while fruit and commercial vegetable prices slipped.
Standard and Poors 500 Index closed at: 3,225.52 down 58.14
NASDAQ finished the day: 9,150.94 down 148.00
Gold ended trading at: $1,591.90 up $2.70