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Registered Investment Adviser Caleb Lawrence 

Despite generally positive data and Trump’s signature on the deeply flawed Republican tax bill. Bitcoin tanked in early trade breaking the $11,000 mark before a small bounce pushed it above $13,000. Since Monday the Standard and Poors 500 index has slipped 4 points or a fraction of a percent, while the NASDAQ has fallen 23 points or 1/3 percent.

The Personal Consumption Expenditures or PCE Deflator gained .2% in November driven by a 3rd large energy price gain in the last 4-months. The year ago rate increased to 1.8%, below the Fed’s 2% target. Personal Income advanced .3% over the same period on strength in asset and small business income gains. Personal Spending increased .4% in November on a big jump in non-durable goods purchases. Despite the spending data more than 8,000 retail establishments have closed this year, a figure greater than that seen during the depths of the previous crisis in 2008.

Durable Goods Orders increased 1.3% in November, this series continues to show anemic growth, a trend that dates to the beginning of the year despite solid regional manufacturing data. The proxy for business spending non-defense capital goods ex-aircraft fell .1%.

The Kansas City Fed regional index slipped 2 points to a still solid 14 in December on a 14-point reduction in new orders.

The real bright spot today was the 17.5% gain in new home sales to a 733,000 unit annualized rate in November. This marks the second large sales gain the last 3-months for the series reflecting the hurricane damage seen earlier this year. Month’s supply fell to 4.6, while the median price dropped 2.7% to $313,300. Previous months were revised materially lower. The western region was a real standout with a 31.1% sales gain for the month.

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