Market Bull

Household Net Worth

Household Net Worth
The Market Bull 2018

00:00 / 2:18

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%.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast. KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Rebroadcasts, additional writings, and other entries are also available on my Blog at

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.

Housing Starts Jump

Housing starts jump, permits slip, mortgage rate increase. Foreigners buy lots of Agency and Treasury bonds in July but sell stocks.

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Trade War Heats Up

Trump ratchets up the trade war substantially, the Chinese retaliate. Debt is our foundation for growth. State and local government revenues jump.

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Crisis 10 Years Later

The crisis 10-years later. Debt is far greater. Too big to fail or jail is also much larger, and derivatives abound. Will we repeat?

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Trade War Jumps

The trade war with China jumps with an additional 200 billion in tariffs. Trade prices slip again. Retail sales gain but miss substantially.

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Consumer Credit Up

Consumer prices gain for the month but fall on a year ago basis. Consumer credit advances again, student loan delinquency jumps.

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Producer Prices Fall

The Producer Price Index falls for the 1st time since December, on a large drop in food prices. Income up for a 3rd year, poverty down for a 3rd year.

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WTO Sanctions

China facing an additional 200 billion in tariffs asks the WTO to apply trade sanctions on the USA. Wholesale trade jumps on inventories.

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Solid Q-2 Earnings

S&P 500 earnings finish the 2nd quarter with a record 80% beat rate. Trade tariffs hit farmers hard as net income plunges 13-30% in 2018.

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Averages Finish Down

Major averages decline for the week. Jobs report beats expectations at +201,000, wages up .4%, not as solid as it seems. More trade war rhetoric.

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Jobs Miss Again

Crypto’s fall again, Bitcoin retests $6,500. Productivity gains so does the ISM Services Index. ADP employment misses. Factory orders fall hard.

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Caleb Lawrence

Registered Investment Adviser

5321 Scotts Valley Drive
Suite #202
Scotts Valley, CA 95066

Toll Free: (888) 742-4744
Local: (831) 334-5318

Listen to Caleb’s daily market commentary on California’s Central Coast every business day at 12 noon, KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.