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Registered Investment Adviser Caleb Lawrence

Markets shake off their early losses. Household debt hits a new record high. Goldman Sachs warns of higher inflation; did they look at energy prices?

After spending the morning in the red stocks cut their early losses to enter the final hour with small gains on little news, though Trumps infrastructure plan seems to be a lot of hot air.

The New York Fed’s 4th Quarter Household Debt Survey provides another record for 2017 as debt increased 193 billion to a new record high of 13.15 trillion following a 14th consecutive quarterly gain for the series. Most of the advance was mortgage related, credit card debt proved especially popular, while student and auto loans remain as prevalent as ever.

Goldman Sachs is the latest entity to warn of higher inflation in 2018. I guess they don’t follow energy prices very closely as based on these I expect inflation to moderate materially beginning in March when the February data is released.

The NAR or National Association of Realtors reports that home prices gained 5.3% in the 4th quarter on a year ago basis. The West and Midwest were particularly strong gaining 7.2% each. That said on a quarterly basis all regions declined except San Francisco and Las Vegas.

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