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The Market Bull – December 6, 2018

 The major averages managed to shed their early substantial losses to close mixed on generally positive data.  The arrest of Chinese telecoms company Huawei CFO in Canada over sanctions violations could dramatically turn up the heat with respect to the trade war if she is extradited to the US, something that seems likely.

Productivity increased 2.3% in the 3rd quarter, a second solid gain.

Unit labor costs advanced just .9% over the same period.  Good numbers to be sure but this series remains anemic on a historical basis.

The trade deficit increased to 55.5 billion in October after imports increased fractionally to 266.5 billion, while exports slipped a little to 211 billion.

The Institute of Supply Manufacturing non-manufacturing or services index beat expectations with a small gain to 60.7.  The details were unremarkable, price data remains high.

Factory orders fell sharply in October down 2.1%.  This series has been essentially flat now for 7-months.

Much discussion over the last several years has been devoted to machine trading and how algorithms have replaced buy and hold investing with machine holding periods measured in seconds, and sometimes not even that.  But it has always been difficult to find hard numbers and in the past machine trading was figured to be somewhere between 40-70% of total market volume.  More than a few pundits have blamed the rise of the machines with market instability and flash crashes, Tuesday’s gut-wrenching plunge as an example.  A recent interview with Guy De Blonay a Jupiter Asset Manager saw machine trading fingered to be as much as 80% of total market volume.

Standard and Poors 500 Index closed at: 2,695.95 down 4.11

NASDAQ finished at: 7,188.26 up 29.83

Gold ended trading at: $1,243.40 up .80

This is Caleb Lawrence Registered Investment Adviser I can be reached directly 831-334-5318 or stop by my office 5321 Scotts Valley Drive in the Scotts Valley Plaza, Suite 202, Scotts Valley, Ca, 95066.

Additional writings, and other entries are also available on my Blog at www.clinvestments.com

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.

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