The Market Bull – January 29, 2019
The major averages finished the day mixed on little economic data though a no deal crash out Brexit was voted on late in the trading day. Numerous dire warnings from the International Monetary Fund or IMF and others have predicted that the consequences would be economically disastrous for Britain and also a threat to the global economy. Then again, I don’t think any of the so-called pundits really know or understand the full ramifications of the Brexit deal regardless of its final form.
Case/Schiller reports that its National Home Price Index advanced 4.7% in November on a year ago basis and .1% for the month. This marks the eighth consecutive month of slower price appreciation for the series.
The top 3 cites for price gains include New York +.9%, Boston +.6% and Las Vegas +.5%. At the other end of the scale is San Francisco -.5%, while Los Angeles and San Diego were both unchanged for the month.
Trumps heralded 1.5 trillion Dollar corporate tax cut that was designed to spur domestic investment or CAPEX through the repatriation of foreign profits, generating jobs and driving wages substantially higher, is so far largely a bust. A recent report from National Association of Business Economics’ or NABE showed that 84% of firms had no plans to increase CAPEX spending. Additional highlights noted by NABE include a further slowdown in business CAPEX spending after it moderated sharply in the third quarter of 2018 with its measure of capital spending falling in January to its lowest level since July 2017. Expectations for capital spending for the next three months also weakened. The report went on to note that most of the money went to buybacks and dividends, same result as the previous 2 huge debt funded republican tax cuts. Also the Congressional Budget Office or CBO noted that the bill for Trumps tax cut is actually closer to 1.9 trillion, instead of the original 1.5 trillion estimated.
Standard and Poors 500 Index closed at: 2,640.00 down .15
NASDAQ finished the day: 7,028.29 down 57.39
Gold ended trading at: $1,310.40 up $7.30