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Direct Investment Down
The Market Bull 2018

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Volatile early trade sent the major averages into the final hour about even on little economic data. Italy’s banking and finance crisis flared again. China’s economic growth continues to struggle under the weight of growing tariffs.

Trouble with real estate usually manifests first with sharply rising inventory for sale followed by price declines. A normal market features about 6-months of inventory, less than that, prices are rising and over 6-months means prices are falling as a general rule. Another general rule with respect to real estate is that prices fall as mortgage interest rates rise and vice versa. Higher interest rates of late have indeed come with some notable softening of various real estate markets but so far nothing to dramatic. A recent piece on Sonoma county real estate on the Blog Wolf Street noted that inventory for sale had jumped some 50% over the summer but remained very low at just 3.4 months’ supply in September. Based on this level of supply prices should be rising. Yet they started to fall notably beginning in July. While far from a crisis very low inventory for sale and falling prices are remarkable.

Continuing the Make America Great Again theme we find that Trumps foreign policies have changed direct foreign investment in the US to direct foreign disinvestment at -32.6 billion in the second quarter, the first negative figure since Quarter 1, 2014. A dramatic decline from the +254.6 billion seen in the first quarter, per FRED Data.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast. KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Rebroadcasts, additional writings, and other entries are also available on my Blog at www.clinvestments.com

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.


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