The Market Bull – May 8, 2019
Despite little real news today, other than rumors and inuendo for the most part. The major averages couldn’t hold their early gains, finishing mixed.
The Mortgage Bankers Association reports that its mortgage activity index advanced 2.7% last week as refi’s gained .8% and purchase apps increased 4.2%. The contract rate for a 30-year Jumbo Loan slipped fractionally to 4.27%. That said activity continues to increase as it has done since the beginning of the year as interest rates started to drift back down as the Fed reversed policy. Sales have improved slightly of late for select markets as a result, some of the first positive real estate related news in the last few months.
The on again off again trade war continues with rumors circulating that the Chinese want to “settle” following Trumps latest threat to take tariffs to 25% and include almost all Chinese exports, due to take effect Friday. The mainstream media continues to get their coverage of this wrong, insisting that it’s not important, will have minimum economic impact and that it will be easy to win, etc., etc. Then again, their function at this point is primarily propaganda and not factual news reporting, so I can’t say as I’m really surprised. The Republicans and Trump would do well to review the history of the Great Depression and the disastrous Republican authored Smoot-Hawley Tariff Act of 1934.
Also of note currency wars and trade wars are the classic approach to solving a deflationary debt crisis, another subject the mainstream media studiously ignores, as countries attempt to export their pain using a beggar thy neighbor strategy. It soon devolves in a tit-for-tat escalation of course that reduces overall trade leaving no winners and only losers.
Yet another Bitcoin hack that results in stolen millions. This time a hack of the world’s largest exchange, Hong Kong based Binance, netted 41 million. The history of blockchain and Bitcoin has by and large been one of scams, frauds, hype and wishful thinking. I had always thought that it was unworkable from the beginning. A recent Gartner Group survey shows that 90% of blockchain supply chain projects are failing because the technology is proving to be unworkable.
Standard and Poors 500 Index closed at: 2,879.42 down 4.63
NASDAQ finished the day: 7,943.32 down 20.44
Gold ended trading at: $1,282.20 down $3.40