The Market Bull – March 15, 2019
With no resolution to the trade war with the Chinese, Trump threatens significant European tariffs, continuing our hostile foreign policy.
The major averages closed with modest gains despite some disappointing data as the markets continue their Yo-Yo like behavior. Considering that the 1st quarter is very likely to be the 3rd consecutive quarter of declining S&P 500 earnings, softening economic data, a poor global economic outlook, and a rapidly growing probability of political crisis here at home. The markets sharp recovery from the late 2018 substantial declines is most charitably described as unusual. Since Monday the Standard and Poors 500 Index is up 74-points or 2.7%, while the NASDAQ has gained 246 points or 3.3%.
With an on again off again settlement with the Chinese trade war making the rounds. Trump has taken to threatening the Europeans with substantial tariffs as well. Merely the latest example of our strong-arm bullying foreign policy that continues to alienate friend and foe alike, while reinforcing global mistrust of the USA. Given the historical record of tariffs, primarily the Republican sponsored Smoot-Hawley tariff act from the Great Depression. Tariffs and protectionism are a recipe for economic disaster. How does it go, those that fail to study history are doomed to repeat the failures and mistakes of the past.
The New York Fed regional index fell 5.1 points in March to 3.7 on weakness in new orders. Employment data was mixed, price data was mixed as well and remains moderate. This series has slipped fairly steadily since late last summer.
Industrial Production missed expectations substantially in February despite a .1% advance. Large declines were seen in Business Equipment and Nondurable Goods. Utilities output advanced 3.7% while capacity utilization slipped fractionally to 78.2%.
The January TIC Report or Treasury International Capital Flows fell for a 2nd month down 7.2 billion. Equities or Stocks sold off hard again down 31.2 billion, followed by Treasuries off 12 billion. Agency Bonds were popular up 23 billion, and to a lesser extent Corporate Bonds up .6 billion. Given our hostile foreign policy to friend and foe alike I’m surprised these figures aren’t’ a lot worse.
Standard and Poors 500 Index closed at: 2,822.48 up 14
NASDAQ finished the day: 7,688.53 up 57.62
Gold ended trading at: $1,302.00 up $6.90