Caleb Lawrence – KPIG-KPYG Radio – Share the Wealth – March 1, 2017
Following Trumps first Congressional address that featured the usual Republican talking points regarding the military and the Affordable Care Act and other subjects, long on rhetoric and short on substance as the president continues to back away from his campaign promises of reform and draining the swamp. Given the rapidly approaching 20 Trillion Dollar deficit wall Trump is likely to find himself backed into a corner unable to do much, which probably had a lot to do with the lack of specifics last night as the funds will prove hard to come by. Following a couple of recent speeches by Federal Reserve Governors singing the praises of the economy odds of a rate hike doubled to 80% this month even as Gross Domestic Product estimates for the 1st quarter got slashed to 1.8% and less this morning which of course was the basis for the markets hitting new record highs. Higher interest rates and slower economic growth what’s not to like if you’re a significantly overvalued equity investor?
The economic calendar is a busy one today. January Personal Income and Spending data more or less met expectations as income gained .3%, and spending advanced .2%. On a real or inflation adjusted basis spending actually fell. Construction spending declined 1% January far below expectations for a .6% gain on significant weakness in public construction but nearly all types slipped. As expected the February Institute for Supply Management Manufacturing Index gained nicely up 1.7 points to 57.7 on a big jump in new orders as the index continues its post-election tear. Mortgage activity advanced strongly last week on gains in refi and purchase activity. The 30-year contract rate for a conforming loan slipped to 4.3%.