Market Bull

Small Losses

Small Losses
The Market Bull 2019

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The Market Bull – May 24, 2019

The major averages closed the week with small gains despite disappointing economic data and an unstable geopolitical backdrop. Since Monday the Standard and Poors 500 Index is down 16 points or .6% while the NASDAQ has lost 77 points or 1%.

Durable Goods Orders fell 2.1% in April, on broad based weakness. The proxy for business spending non-defense capital goods ex aircraft fell 5%, a second large decline in the last 3-months. A volatile series it has shown little growth for over a year now, and I doubt a full-blown trade war will help any.

With defaults and delinquencies on the rise for credit cards, heavily indebted American Consumers are struggling to make their car payments as well. The excessive debt levels are also starting to put a real crimp in new car sales pushing inventories up to the point that manufacturers are starting to cut production per a research piece by Merrill Lynch. The report went on to note that auto production fell 2.5% in April, a second decline in the last 3-months. These production declines are expected to shave .2% from Gross Domestic Product or GDP, while reducing employment as well. The next few months will be very telling as the effects of the trade war become known. Given that the economic data was already softening and that 2nd quarter GDP estimates are struggling to stay above 2%, risks to the downside are growing.

Standard and Poors 500 Index closed at: 2,826.06 up 3.82
NASDAQ finished the day: 7,637.01 up 8.73
Gold ended trading at: $1,284.30 down $1.10


Large Losses

Disappointing data and the realization that the trade war will hit the economy hard sent the major averages into the close with large losses.

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FOMC Minutes

The major averages closed with small losses on little real news though the Federal Open Market Committee minutes were subject to their usual dissection.

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Disappointing Data

Despite some fairly significant and disappointing economic data along with a dramatic escalation of the trade war after China threatened to cut off rare earth exports

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Averages Stumbled

The major averages stumbled to begin the week on disappointing data. Rumors of a trade war settlement evaporated once again.

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Hope Dashed

Rumors of a trade war settlement helped the major averages to large gains early in the week, only to see hope dashed in the final hour. As the major averages closed with modest losses for the day.

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Another Large Gain

Despite considerable geo-political uncertainty, mixed economic data and still no resolution to the trade war in sight, the major averages closed with large gains.

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Rumored Settlement

Despite mixed economic data the major averages closed with large gains as the rumored trade war settlement melt up continues.

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What Losses

Despite a lack of real news, the major averages managed to recover all of yesterday’s losses and then some on yet another rumored trade war settlement.

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Very Large Losses

The major averages kick off the week with very large losses after the dramatic escalation in the trade war with tariffs hitting 25% and including all Chinese goods.

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25% Tariffs

25% tariffs sent the major averages to large losses in early trade, but Trump stopped short of applying tariffs to almost all Chinese imports.

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Caleb Lawrence

Registered Investment Adviser

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

Local: (831) 334-5318

After nearly 19 years of live radio it was time to move on to new projects. My daily economic update can still be found on my Blog and the I-Tunes and Google Play stores as a podcast. Or you can call my office 831-334-5318 and take advantage of my still “free” after 20+ years initial consultation.  Usually about an hour, will have an opportunity to get to know each other better and address your specific concerns on a one to one basis.