The Market Bull – December 19, 2018
Mixed data and another fed rate hike as expected that was accompanied by a halving of rate hike expectations for 2019 spooked the markets late as they crashed from decent gains to large losses. It’s been said that Bull Markets don’t die of old age, the Fed kills them. With critical technical support levels now decisively broken, the major averages are very likely to go sharply lower from here.
Company earnings announcements can sometimes provide a few real clues as to the direction of the economy. The latest announcement from FedEx being a case in point. As the company slashed its global forecast and warned of a significant global economic slowdown. FedEx joins GM and Ford in issuing warnings about the future while acknowledging that current economic and business conditions are just fine.
The Mortgage Bankers Association reports that mortgage activity slipped 5.8% last week snapping a string of gains.
Refi’s fell 2.3% while purchase apps dropped 6.8%. The 30-year contract rate for a jumbo loan fell 6 basis points to 4.74%.
Another bright spot for real estate after existing home sales beat expectations with a 1.9% increase to 5.32 million units annualized. All regions did well except the West, falling for a 4th time in the last 6-month’s down an eye opening 6.3%.
Months’ supply fell to 3.9. The median price increased 1% for the month to $257,700 a figure 4.2% higher than a year ago.
The current account deficit jumped to 124.8 billion in the 3rd quarter on a substantial increase in the goods deficit.
This marks a 10-year high quarterly figure for this series.
The Tech Pulse gained .7 points in November to 103.3.
On a year ago basis this index has gained 9.2% and sits at an impressive nearly 18-year high as the high-tech sector continues to boom.
Standard and Poors 500 Index closed at: 2,508.84 down 37.32
NASDAQ finished at: 6,641.26 down 142.65
Gold ended trading at: $1,246.40 down $7.20
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