The Market Bull – July 15, 2019
Stocks struggled into the close about even as earnings season begins. China’s economy records the lowest growth in 27-years as tariffs bite.
The Empire State Manufacturing Survey jumped 12.9 points in July to 4.3, ending a brief trip into the red and handily beating expectations. That said new orders, employment and inventories all remained negative. Price data slipped a little and remains mixed.
Despite being the longest economic expansion in history and sporting an official unemployment rate of just 3.6% the current recovery has left a lot to be desired despite adding ten times to the national debt than previous recoveries and quadrupling the Fed’s balance sheet. While the stock market boomed earnings and revenues struggled, were it not for the magic of debt funded share buybacks and Wall Street’s focus on Earnings Per Share or EPS, as opposed to actual earnings, the market wouldn’t be anywhere near as high as it is today. Compliments of calculation methodology and other statistical manipulations mediocre or downright poor data magically transforms into “good or great data”.
We’ve been living the last twenty years in a trickle-down recession that has only benefited the top 10%. Mostly, of course, the 1%, whilst spreading debt far and wide leading to new records across the board. For all that debt, we have seen less GDP improvement than at any time in the past hundred years.
Unemployment only appears to be at its lowest ever, but unemployment truthfully remains quite bad. Falling out of the official statistics happens in three main ways: 1) You only remain counted in unemployment stats for as long as you keep actively seeking work and qualifying for benefits. 2) You also fall off the list as soon as you use up all your available benefits because that is another way to no longer qualify. 3) You fall off the list when you replace your former full-time job with part-time work. As a result, we have the lowest labor force participation rate in half a century. Even the Fed acknowledges that and pretends to be mystified as to why that is when it is as obvious as the gray hair on the Fed chair’s head. There are other egregious examples of number “fudging” but these are the primary ones.
Standard and Poors 500 Index closed at: 3,014.28 up .51
NASDAQ finished the day: 8,258.19 up 14.04
Gold ended trading at: $1,415.70 up $3.50