The major averages enter the final hour with significant losses despite generally positive economic data. Fears of a full blown trade war and increasingly harsh rhetoric on the subject from our major trading partners spooked the markets to begin the week. Bitcoin breaks below $6,000 over the weekend but has recovered since.
The Chicago Fed National Activity Index slipped .49 in May to -.15. Weakness was noted in Production, Personal Consumption and Housing. A volatile series, the 3-month moving average slipped to .18, this index covers some 85% of total economic activity.
New Home sales handily beat expectations in May with a 6.7% gain to 689,000 units annualized. Month’s supply fell to 5.2, the median price fell for a 4th time in the last 5-month’s dropping 1.6% to $313,600, a figure 3.3% lower than a year ago. Other notable items in the report, all of the sales gain came from the Southern Region, the West saw a sales decline of 8.7%. Previous months were revised lower. This series has softened notably in the last 6-months.
The Texas regional manufacturing index gained 9.7 points in June to 36.5 despite a sharp drop in production. Price data increased again and remains very high. Tariffs should start to feed meaningful price increases in the June and later related data series. Trump may well come to regret his shoot from the hip statement about trade wars being easy to win. But then that’s one of the hazards when you open your mouth prior to engaging the mind.
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