Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour about even on generally positive data and a material easing of tensions in Korea. Since Monday the Standard and Poors 500 Index has lost a handful of points while the NASDAQ is down 61 points or .8%.
Preliminary 1st quarter Gross Domestic Product or GDP beat expectations with a 2.3% gain. The slowest showing in a year on weak trade data and durable goods spending. Real disposable income growth advanced 3.4% compliments of the tax cuts, which helped push the savings rate to 3.1%. Fixed investment and consumer spending both slowed markedly, with consumer spending or consumption hitting a 5-year low. Higher interest rates and a rapidly flattening yield curve threaten to derail the debt fueled party, but so far so good.
The 1st quarter employment cost index advanced .8% on strength in private sector wages and benefits. On a year ago basis compensations gains were unchanged at a respectable 2.7%. A figure a little ahead of the official inflation data, currently 2.4%, as measured by the Consumer Price Index or CPI.
Agricultural prices advanced 5.7% in February erasing much of January’s decline. On a year ago basis this series is down .2%. Meaningful price gains were seen in meat, food grains, feed grains and hay prices in February. Commercial vegetable and dairy prices both fell 5% for the month.