The Market Bull – July 11, 2019
The major averages closed mixed on little news. While the Dow closed above 27,000 for the 1st time, the S&P 500 can’t seem to close above 3,000.
The June Consumer Price Index or CPI gained .1%, despite a large drop in energy prices. On a year ago basis the CPI is up 1.7%, well below the Fed’s 2% target. Offsetting the decline in energy prices were notable jumps in new and used vehicle and apparel prices. This will have little if any effect on the next decision on interest rates later this month with odds of a cut running some 90% at present.
After rising sharply at the end of the year as the major averages swooned. The Saint Louis Fed Financial Stress Index has since reversed course and sits at a very low -1.38 in July. With the yield curve normalizing and expected rate cuts on tap. Financial stress is likely to stay low for a while. With a solution to the trade war unlikely and if the yield curve dramatically normalizes as I expect it to, all bets are off.
Standard and Poors 500 Index closed at: 2,999.91 up 6.84
NASDAQ finished the day: 8,196.04 down 6.49
Gold ended trading at: $1,405.30 down $7.20