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Market Bull

Repo Market Driven Liquidity, AKA QE 4

Repo Market Driven Liquidity, AKA QE 4
The Market Bull 2019

00:00 / 2:16

The Market Bull – November 15, 2019

The major averages closed with modest gains to wrap up a solid week. The Fed’s Repo Market driven liquidity, aka QE 4 helped to set new record highs. Since Monday the Standard and Poors 500 Index advanced 40 points or 1.3% while the NASDAQ gained 110 points or 1.3% as well.

Retail sales bounced back in October with a .3% gain. Strong sales were seen at gasoline stations, internet retailers and auto dealerships. On a year ago basis sales are up a respectable 3.1%. Declines were led by apparel, furniture stores, sporting goods and hobby stores.

Trade prices fell again in October marking a 3rd decline in the last 6-months. Export prices slipped .1% for the month and 2.2% from a year ago. Import prices dropped .5% for the month and 3% from a year ago. Year ago price data has fallen for 6 consecutive months. With the Fed’s decision on interest rates tied to the economic and inflation data one wonders if the Fed will cut again in December as both data sets are clearly softening. While nothing to panic about yet, the trend is decidedly negative.

Industrial Production fell hard in October dropping .8% a figure double the expected decline. While the GM autoworkers strike hit the topline hard for a second month, weakness was broad-based. Capacity utilization slipped almost a point to 76.7% a 25-month low.

Standard and Poors 500 Index closed at: 3,120.46 up 23.83
NASDAQ finished the day: 8,540.83 up 61.81
Gold ended trading at: $1,467.40 down $6.00


Trump’s Impeachment

It would seem that the markets care little about the trade war, Trump’s impeachment, or the ongoing dramas with the Repo market, closing about even.

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Markets Don’t Seem To Care

The major averages finished mixed. The latest rumored trade deal fails again, but the markets don’t seem to care. Powell says negative rates are inappropriate.

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Balance Sheet Breaks 4 Trillion

The major averages closed with small gains on little real news. The Fed’s Repo Market Operations continue as the Balance Sheet breaks 4 trillion again.

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Mixed Economic Data

The major averages closed with decent gains on mixed economic data. Rumors circulate of another trade war settlement, but I think it’s doubtful at best.

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Another Mirage Trade Deal

Despite generally disappointing economic data and yet another mirage trade deal with the Chinese. The major averages began the week with modest gains.

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Caleb Lawrence

Registered Investment Adviser

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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.