The Market Bull – January 28, 2020
Despite additional flu fatalities the major averages closed with modest gains recovering much of yesterday’s steep losses on decent economic data.
Bankruptcies fell in the 4th quarter with personal filings dropping .9% while business bankruptcies declined 2.4%, both on a year ago basis following their usual seasonal pattern. The current level of filings remains quite low as a strong labor market supports personal finances while until recently strong corporate profits helped to support the business sector. Will see if corporate profits can improve going into 2020 as Trump’s tax cuts have lost their push and debt funded corporate buy backs begin to take their toll on earnings.
Despite Boeings well publicized 737 Max fiasco durable goods orders held up well in December with a 2.4% gain handily beating expectations. Will see what happens next month when the 737 production line shutdown bites. The proxy for business spending non-defense capital goods ex-aircraft fell .9% a 3rd significant decline in the last 6-months. A volatile series, that seems to be weakening as the year ago comparisons have been negative for a number of month’s now.
The Richmond Fed regional manufacturing index surged 25 points in January to 20 with solid gains seen in new orders and employment. While manufacturing has struggled for a number of months largely due to the trade war and various tariffs. The recent deals with China, Canada and Mexico should help.
Standard and Poors 500 Index closed at: 3,276.24 up 32.61
NASDAQ finished the day: 9,269.68 up 130.37
Gold ended trading at: $1,567.50 down $9.90