Market Bull

Bad To Worse

Bad To Worse
The Market Bull 2019

00:00 / 2:46

The Market Bull – March 22 2019

The major averages crashed badly Friday closing with large losses on a raft of negative data. The yield curve continues to invert, an unstable geo-political situation in Asia, while Europe goes from bad to worse economically. Since Monday the Standard and Poors 500 Index has fallen 22 points or .78%, while the NASDAQ slipped 53 points or .69%.

With no end to the trade war in sight and the potential for sharply higher tariffs. Wholesale trade jumped again in January with a 1.2% gain. Sales produced their best showing in 5-months with a .5% advance. The inventory to sales ratio inched up to 1.34 months.

Lower interest rates helped existing home sales to a considerable beat to expectations in February after they surged 11.8% to 5.51 million units annualized on huge gains in the Western and Southern regions. Month’s supply slipped to 3.5, the median price advanced slightly to $249,500.

The Chinese economy is rapidly going south, ours is turning down as well, while Europe goes from bad to worse. Recent cuts to the European economic growth rate for 2019 shaved .6% off the top line figure as it hit just 1.1%, risks were noted to the downside. With growing social unrest and the Brexit fiasco even 1.1% growth may turn out to be overly optimistic. With the USA joining Europe in a return to monetary stimulus the implication is that heavily indebted western economies can’t function anymore without it anymore as the central banks have painted themselves into a corner. With inflation sinking back towards 1.5% once again we are reminded that credit busts are inherently deflationary. Worse a harsh lesson in the problem cannot be the solution is on tap. Or to put it another way, you cannot solve the problems caused by too much debt with even more debt. I would have thought they knew better, they certainly should have.

Standard and Poors 500 Index closed at: 2,800.71 down 54.17
NASDAQ finished the day: 7,642.67 down 196.29
Gold ended trading at: $1,313.00 up $5.70

Negative Data

Despite considerable negative data about Brexit, the trade war, and a half-inverted yield curve. The major averages finished with solid gains.

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Fed Goes Dovish

Major averages close mixed. No trade war settlement in sight. Fed goes dovish on monetary policy. The Brexit fiasco goes from bad to worse.

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Small Gains

The major averages begin the week with small gains on little real news. Trump’s next meeting with the Chinese to discuss trade has been pushed back until June apparently.

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European Tariffs

With no resolution to the trade war with the Chinese, Trump threatens significant European tariffs, continuing our hostile foreign policy.

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No Resolution

The major averages finish about even on poor economic data. No resolution to the trade war as the next meeting with China gets pushed back to April.

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Brexit Vote Fails

The major averages opened higher on generally positive data closing with modest gains. The Brexit vote has failed leading to considerable uncertainty.

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Not Easy To Win

The major averages finished mixed on disappointing, but not overly significant, economic data. CPI falls to just 1.5% on lower energy costs.

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Retail Sales Slow

The major averages mark solid gains to begin the week despite some disappointing data with retail sales showing a decidedly weak trend.

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Ugly Jobs Report

Markets fall hard for the week. February employment report misses big time barely positive at +20,000. Construction activity rebounds in January.

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No China Trade Deal

Trumps political position grows more precarious by the day. A trade deal with the Chines looks unlikely. Economic data is mixed, debt grows.

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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.