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Registered Investment Adviser Caleb Lawrence 

Another volatile session sends the major averages into the final hour with small losses on mixed data. Since Monday the Standard and Poors 500 Index is up 90 points or 3.4% while the NASDAQ has gained 241 points or 4.2%. The December Treasury International Capital Flows or TIC report showed net foreign purchases of 27.3 billion in December on strong equity and agency bond buying. Treasury issues sold off for a 3rd consecutive month, while corporates also saw some selling as well.

Housing starts increased 9.7% in January on a huge jump in multi-family construction. Permits gained 7.4% led by multi-family units. Strength was notable in the West and South.

Import prices increased 1% in January on higher oil prices and a rapidly falling Dollar despite higher interest rates. Energy prices continue to be the primary driver as they have been for a number of month’s now. Recent declines should put downward pressure on this and other price series beginning with the February data set next month.

E-Commerce sales continue their advance with a 3.2% gain in the 4th quarter of last year. That said the online sales total held steady at 9.1% of sales over all. Something to keep in mind when the talking heads announce that Amazon is crushing brick and mortar retail. The real problem with traditional retail is debt and high lease rates.

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