Registered Investment Adviser Caleb Lawrence
The major averages begin the week with large gains despite disappointing and fairly significant economic data.
The Chicago Fed National Activity Index fell .15 to .12 in January. A volatile series the 3-month moving average fell .26 to .17 indicating more moderate economic activity.
The real disappointment today was the 7.8% drop in new home sales. This marks 3 sales declines in the last 4-months. Month’s supply hit 6.1 essentially normal. The median price slipped .9% to $329,000 marking a 3rd decline in the last 4-months. On a regional basis the northeast and south both record sharp sales declines. The west advanced 1% while the Midwest jumped 15.4%.
Fracking and the tight energy complex continue to drive manufacturing activity despite mountains of debt and a lack of profitability. The Texas manufacturing index hit a 13-year high of 37.2 in February after a 3.8-point gain.