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Registered Investment Adviser Caleb Lawrence 

Volatile early trade and disappointing data sent the major averages into the final hour with small losses. Existing home sales missed expectations in July falling 1.3% to 5.44 million units annualized. This marks the 4th sales decline in the last 6-months. Month’s supply held steady at 4.2. The median price fell $5,000 or 1.9% to $258,300, on a year ago basis prices have gained 6.2%. At the regional level the Northeast fell 14.5% followed by a 5.3% decline in the Midwest, Western region sales advanced 5%.

The Kansas City Fed regional index gained 6 points to 16 in August on strength in production, new orders and the average workweek. So far, the tight oil or fracking complex and auto manufacturing have managed to sustain decent activity levels in the Fed regional districts. Given both sectors are coming under increasing pressure I would expect that the regional indexes will struggle going forward.

10-years after the great financial crisis there’s no shortage of pundits or stories trumpeting the recovery or the country’s economic vibrancy, and yet if one takes the time to look it becomes obvious that all is not as it seems. Sharp declines in the labor force participation rate and a lack of real earned income growth belie the strength of the labor market based on the official unemployment rate. Real estate sales volumes remain a shadow of their pre bust levels. Moving to the IPO market and it too is a shadow of its former self having never recovered from the Dot-Com bust in 2000 as both the number of deals and the Dollar value of deals done since pales in comparison to the to the pre-bust period before 2001. Also of note the number of publicly traded companies has fallen by nearly half in the last 20-years from about 7,300 to just 3,700 today dragging down average daily trading volumes on the large national exchanges as well.

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