The Market Bull – March 5, 2019
After opening lower the major averages closed about even despite some fairly significant positive economic data as the political situation continues to deteriorate, spreading uncertainty in the process.
New Home Sales beat expectations in December with a 3.7% gain to 621,000 units annualized pace. Month’s supply slipped fractionally to 6.6. The median price jumped 5.1% to $311,200. At the regional level sales were particularly strong in the Northeast and South, the West advanced a little while the Midwest fell.
The Institute for Supply Management non-Manufacturing or services index jumped 3-points in February to 59.7, handily beating expectations. Strength was seen in new orders, employment slipped a little, as did price data that hit 54.4 or very modest growth. Covering about 88% of the total economy, like the Fed’s Beige Book this series shows moderate economic growth.
The post crisis period since 2008 has seen repeated Central Bank intervention in financial markets worldwide to prop up asset prices of all stripes, stocks, commodities, real estate, bonds etc. through various liquidity enhancing programs, outright monetary injections, numerous buy backs of all types hence the massive expansion of various balance sheets, amongst other items.
In the process growing more and larger economically destabilizing asset bubbles, subverting effective price discovery and setting the stage for the next crisis, as I can assure you “it won’t be different this time”, it never is. One thing I have never understood is how is it that the worlds’ central bankers came to the conclusion that the solution to a massive global credit bust is to create even larger and more dangerous debt fueled asset bubbles as far as the eye can see. Logically the problem and the solution cannot be the same thing, and yet the Central Bankers seem convinced that it is. With the Japanese rapidly approaching 4 lost decades compliments of their debt induced bubble that blew up in 1991 one would think that the borrow your way to success economic model is a proven spectacular failure. Yet it continues to be pursued with gusto.
Standard and Poors 500 Index closed at: 2,789.65 down 3.16
NASDAQ finished the day: 7,576.36 down 1.21
Gold ended trading at: $1,288.60 up $1.10