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Death Spiral
The Market Bull 2019

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The Market Bull – July 8, 2019

The major averages begin the week with modest losses. Deutsche Bank continues its death spiral as it sheds employees and exits business lines.

Consumer Credit jumped 17.1 billion in May, slightly ahead of consensus. Non-Revolving debt essentially student and auto loans advanced an anemic 9.9 billion. Revolving or credit card debt gained 7.2 billion, a second solid monthly increase. There’s two ways to look at this, a quick glance says consumers are confident and happy to borrow money, which is positive. Another way is that consumers are pushing credit cards hard as they have maxed out on student and auto loans and can only keep the party going with credit cards. A real negative as this strategy will only work for so long.

The semi-Conductor Industry Association or SIA reports that global sales have fallen 24% from a year ago since their late 2018 peak on a 3-month moving average basis, a not trivial sum, as this is the largest decline since the last crisis. Measured in Dollar terms and a similar picture emerges. On a regional basis sales fell an eye opening 29.5% in the Americas, nearly 3-times that seen in the other regions. For the year the SIA figures that sales will fall 23.6% in the Americas, 9.7% in Japan, China and the rest of Asia 9.6%, and Europe 3.1%. The SIA went on to note that companies attempted to get ahead of the tariffs in 2018 by stockpiling. So, the large declines could prove transitory, nonetheless they remain far from positive as phone and computer sales continue to slip.

Standard and Poors 500 Index closed at: 2,975.95 down 14.46
NASDAQ finished the day: 8,098.38 down 63.41
Gold ended trading at: $1,397.20 down $2.90


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