The Market Bull – September 27, 2019
Despite ok data the major averages closed with modest losses. After a proposal to limit Chinese investment & delist its ADR’s was floated. Since Monday the Standard and Poors 500 Index is down 22 points or .74% while the NASDAQ lost 166 points or 2.1%
Personal Income gained .4% in August led by wages and proprietor’s income; asset income slipped for a second month. On a year ago basis income is up a respectable 4.6%. Driven by strong wage gains Personal Spending advanced .1% in August. The inflation measuring PCE Deflator was unchanged in August and up just 1.4% from a year ago as inflationary pressures stay muted. A number of risks remain with respect to wage growth, consumer spending and inflation. The trade war and tariffs top the list, followed by a messy Brexit and political instability in the Middle East.
Durable Goods Orders handily beat expectations in August with a .2% advance. The proxy for business spending non-defense capital goods ex-aircraft fell .2%. A volatile series one month means little, that said August marked a 3rd consecutive gain. Going forward and the sharp decline in Capex spending by the tight oil sector is likely to weigh heavily on Durable Goods, Manufacturing and Factory Orders.
Agricultural Prices increased .8% in August led by Fruit and Dairy products. Commercial Vegetable prices fell hard again, a 4th large decline in the last 5-months. Difficult growing conditions and the trade war with China have plagued farmers in 2019.
Standard and Poors 500 Index closed at: 2,961.79 down 15.83
NASDAQ finished the day: 7,939.63 down 91.03
Gold ended trading at: $1,503.70 down $11.50