The major averages unconcerned about higher interest rates, mountains of debt, trade wars and political scandal continue to march higher as the trend is your friend, until it isn’t.
The Philadelphia Fed survey nearly doubled in September to 22.9 on strength in new orders and employment. Price data plunged to levels not seen since the beginning of the year.
Sensitive to rising interest rates existing home sales were unchanged in August at 5.34 million units annualized. Month’s supply was also unchanged at 4.3. The median price fell 1.7% to $264,800. On a year ago basis prices gained 4.6%.
The 2nd Quarter Federal Flow of Funds report showed that household net worth hit a new record high of 106.9 trillion. Household percent equity hit a 16-year high of 59.9%. Like the income gains and distribution data, the devil is in the details. Some numbers from the report that stand out include 16 trillion in “Other Assets”. At about 16% of the total household net worth figure this isn’t a trivial amount. Further a figure like this on a company balance sheet would be a “Red Flag”. A figure equal to all homeowner’s equity yet does not include cash, stocks, mutual funds, other investments, or non-corporate business. Non-Corporate businesses are valued at 11.9 trillion. Other data sources show us that some 85% of this wealth is held by just 10% of the population so most of the gains have accrued to the top 10% like income and in fact it’s really the top 5%, and one could argue the top 1%.
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