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Registered Investment Adviser Caleb Lawrence 

The major averages enter the final hour with large gains on little real news though the Republican tax plan seems to be back on the table after a scare yesterday. Since Monday the Standard and Poors 500 Index is up 24 points or .9% while the NASDAQ has gained 83 points or 1.2%.

The New York Fed manufacturing survey slipped 1.4 points in December to 18, on notable declines in inventories and employment. Industrial Production missed expectations with a .2% gain in November. Utilities Production contracted for a 4th time in the last 6-months. Capacity Utilization increased to 77.1%.

Yesterday’s retail sales figures, while strong featured one notable decline, a .2% drop in motor vehicle and parts sales. It was generally accepted that after the particularly destructive hurricanes that automobile demand would be robust due to large numbers of insurance funded replacements, in the neighborhood of 300-600 thousand units. Combined with inventory destruction this was supposed to solve the very bloated auto inventory picture. With the hurricanes fading into the distance and auto sales still weak, it would seem that even the low end of the replacement estimates, or 300,000 units is proving overly optimistic, despite record incentives, historically low interest rates, and muscular all-encompassing marketing. Visions of another record year for auto sales is slipping rapidly as the year comes to a close.

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