The Market Bull – October 16, 2019
The major averages closed with small losses. A trillion in excess bank reserves and still the Fed has to fire up the Repo market in a big way.
The California Association of Realtors reports that year ago sales figures continued south in September with an 11.6% decline. Inventory for sale increased to 3.5 month’s fairly low by historical standards. Despite lower interest rates sales continue to struggle.
The Mortgage Bankers Association reports that its Mortgage Activity Index advanced .5% last week as refi’s increased 3.6% and purchase apps fell 4.1%. The 30-year contract rate for a jumbo loan was unchanged at 3.9%.
Retail Sales missed expectations falling .3% in September on broad based weakness. On a year ago basis sales have increased a decent 4.1%. The one real bright spot was clothing and accessories that advanced 1.3% for the month. Building materials -1%, motor vehicles and parts -.9% and gasoline stations -.7% all lagged.
The Fed’s Beige Book on regional economic conditions during October showed continued growth but at a slower pace as some districts came in flat. The re-escalation in the U.S.-China trade war weighed significantly on business and consumer confidence. As did financial market volatility, and a slowdown in global growth. Items the Fed’s latest pair of rate cuts was designed to address.
The August Treasury International Capital or TIC report showed foreigners to be significant net sellers of securities, with the worst figure in 8 months. Treasury bonds and notes, corporate bonds and equities all sold off materially. Agency bonds were the only security type to show net purchases for the month. This marked a 3rd significant month of sales in the last 9-months.
Standard and Poors 500 Index closed at: 2,989.69 down 5.99
NASDAQ finished the day: 8,124.18 down 24.52
Gold ended trading at: $1,493.80 up $10.30
The major averages closed with large gains on little news. 3rd Quarter earnings season gets underway with some decent results from the banks to start.
The major averages finished about even on a quiet day of trading. Global economic data continues south, as do the Social Security Trust Funds.
The major averages couldn’t hold their early gains, closing modestly higher. On little news of significance, save another round of trade talks with the Chinese.
The major averages closed with modest gains despite some disappointing data, seemingly unconcerned with the Repo Market and QE 4.
The major averages close with large losses as trade talks collapse again. Given how far apart and intransigent both sides are, I’m not surprised.
The major averages begin the week with small losses. A trade deal with the Chinese fails once more. Consumer credit beats expectations again.
With the impeachment theatre in play the major averages closed with solid gains on generally disappointing data after jobs growth missed expectations.
The major averages fell hard after the open, recovered late, closing with modest gains. Economic data heads south, as political infighting rages.
Generally disappointing data sent the major averages below key technical support levels as they closed with significant losses.
The major averages couldn’t hold their opening gains to begin the 4th quarter, finishing with modest losses on disappointing manufacturing data.