The Market Bull – January 14, 2020
The Consumer Price Index or CPI rose a little less than expected in December gaining .2%. For 2019 the CPI advanced 2.3%, slightly ahead of the Fed’s desired 2% target, but well below its long-term average of 3.1%. Most of the gains were attributable to energy and services costs. Despite the 2.3% headline rate of increase it’s highly unlikely that the Fed will raise rates this year absent some material change. In fact, that bias at this point is towards lower rates.
The Dodge Momentum Index for commercial real estate advanced 1.5% in December to 156.2. The series tracks pending commercial construction projects as they go through planning. While the series is 3.7% lower than a year ago and there was an additional hiccup in 2017, it has trended steadily higher since 2011.
The retail bloodbath continued in 2019 with a record 9,300+ store closings led by Payless ShoeSource, Ascena Retail, Gymboree, Charlotte Russe and Sears. Alternatively, 4,392 stores were opened last year, the lion’s share of those were various Dollar discount stores. All this despite a 50+ year low unemployment rate, supposedly solid consumer spending and an economy humming along. So far 2020 isn’t looking any better with respect to store closings.
Standard and Poors 500 Index closed at: 3,283.15 down 4.98
NASDAQ finished the day: 9,251.33 down 22.60
Gold ended trading at: $1,543.60 down $2.40