The Market Bull – March 21 2019
Despite considerable negative data including crash out Brexit, no resolution to the trade war, a half-inverted yield curve, softening economic data and corporate earnings expected to go south for a 3rd consecutive quarter. The major averages finished with solid gains.
The Philadelphia Fed Index jumped 17.8 points in March on strength in inventories. Most everything else was weak, price data slipped, employment was mixed. The headline number makes this report seem far better than it actually is.
The Quarterly Services Survey showed solid growth as 2018 came to a close. Administrative services led the charge with a 9.1% annualized gain, followed by Information Technology up 7.9%, Professional Services increased 5.6% while Hospital Services advanced 5.6% as well. This will help take some of the sting out of weak retail and other data of late.
Fed Chairman Jerome Powell’s latest statements regarding interest rates, monetary policy and quantitative easing helped push the yield curve much closer to inverting. Depending on your point of view demonstrates that the chairman is either a clueless fool who has backed himself into a corner hamstrung by record debt, markets and the economy that are hooked on intervention, ultra low interest rates and endless monetary stimulus. The other side of this coin, and a subject that is studiously avoided by the lame stream media is that ultra low interest rates crucify savers and retirees on a fixed income whilst encouraging reckless leveraged speculation. A process that is gutting pension programs, spawned the Great Financial Crisis and is all but set for a repeat. On the other hand the Fed has magically ridden to the rescue after the Dot-Com crash and the last crisis making speculators whole both times and then some. Let’s all hope it’s going to be different this time. Because if it crashes again it will be far worse than last time.
Standard and Poors 500 Index closed at: 2,854.88 up 30.65
NASDAQ finished the day: 7,838.96 up 109.99
Gold ended trading at: $1,308.10 up $6.40