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Registered Investment Adviser Caleb Lawrence 

The major averages enter the final hour with small gains on generally positive news. Since Monday the Standard and Poors 500 Index is essentially unchanged, while the NASDAQ has lost 47 points or .73%.

July saw a better than expected 209,000 jobs created as per the BLS or Bureau of Labor Statistics. The official unemployment rate slipped to 4.3%, average hourly earnings increased .3%. On a year ago basis wages are up 2.5% a little less than the previous period indicating that while wage growth is ok it isn’t accelerating, while the average work week was unchanged at 34.5 hours. The 3-month moving average for job creation gained fractionally to a respectable 195,000 slightly ahead of demographic trend figured to be about 175,000 jobs per month. The labor force participation rate increased slightly to 62.9%.

Semiconductor billings increased 2% in June on strength in the Americas as billings climbed 5.1% for the region. The international trade imbalance improved in June falling 2.9 billion to 43.6 billion as imports fell .4 billion and exports advanced 2.4 billion.

The various forms of stimulus pursued by the world’s central banks in the post 2007-2009 financial crisis period has spawned a number of significant distortions in asset prices. The latest comes to us from Europe where the Bank of America Merrill Lynch Euro High Yield Index hit just 2.42% essentially matching the 10-year US Treasury yield from November 2016 until now as it ran from 2.14% to 2.62%, over that time period. Not exactly a good risk adjusted return.


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