The major averages opened sharply lower on disappointing earnings data laced with warnings about the negative effects of trade tariffs. Recovering some of their lost ground they enter the final hour with modest losses. So far, the Fed’s rate hikes and trade tariffs have had notable negative impacts on the housing sector with the PHLX Index down a bear market 29% Year to Date and the KBW Banking Index hit hard in the last couple of months, same for the small and mid-cap Russell 2000 Index.
The California Association of Realtors or CAR reports that real estate sales fell 4.3% in September, and 12.4% from a year ago, falling below 400,000 units annualized for a 2nd consecutive month. Trumps tax cuts which limited mortgage interest deductions have also negatively impacted high priced markets. The report went on to note that inventory increased for a 6th consecutive month, the last 4-months showing double digit gains statewide. On a year ago basis inventory for sale is up 20.4%, to 4.2 month’s supply, which is considered about normal. Price data was mixed for the month but remains higher than a year ago.
The Richmond Fed regional index fell by nearly half in October dropping 14 points to 15. Weakness was noted in new orders and inventories. Price data showed sharp gains.
CreditForecast.com reports that consumer credit advanced 4.3% in September. Delinquency rates increased for a 3rd consecutive month but remain very low at 2.55%.
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.