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No China Trade Deal
The Market Bull 2019

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The Market Bull – March 7, 2019

The major averages closed off their lows for the day after spending the session in the red despite some generally positive data. That said the political situation continues to deteriorate, a trade deal with China is looking increasingly unlikely, while the North Koreans look to pull yet another bait and switch with respect to their nuclear weapons and missile programs.

The 4th quarter Federal Reserve Flow of Funds report shows that household net worth fell 2.6 trillion to 104.3 trillion as the stock markets swooned into the end of last year. Household percent equity increased slightly to 60% as rising home prices continue to work their magic for now.

Nothing screams success like record debt levels, January’s Consumer Credit report beat expectations with a 17 billion dollar gain on strong demand for non-revolving credit essentially student and auto loans. Revolving of credit card debt also advanced.

Despite generally rising real estate prices CoreLogic reports that homeowners with negative equity actually increased by 35,000 in the 4th quarter of 2018. After the total number of mortgaged homes in negative equity increased 1.6% to 2.2 million. This was the first quarterly increase since the 4th quarter of 2015. Despite an average equity gain of 8.1% last year or $9,700. California homeowners experienced the fourth-highest growth with an average increase of approximately $19,600 in home equity last year.

Labor force productivity advanced 1.9% in the 4th quarter of 2018, slightly ahead of expectations. Unit labor costs gained 2% as hourly compensation advanced 3.9%, a 4th solid gain in the last 6-months.

Standard and Poors 500 Index closed at: 2,748.93 down 22.52
NASDAQ finished the day: 7,421.46 down 84.46
Gold ended trading at: $1,285.80 down $1.80


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