Registered Investment Adviser Caleb Lawrence
The major averages struggled to build on yesterday’s advance on disappointing but not overly significant economic data. Mortgage activity gained 2.7% last week as per the Mortgage Bankers Association with purchase apps up 6.2% while refi’s fell 1.2%. The 30-year contract rate for a jumbo loan slipped fractionally to 4.57%.
4th Quarter GDP or Gross Domestic Product was revised down .1% to 2.5% despite materially higher consumption and fixed investment. Trade data and downward revisions to inventories accounted for the small net decline. Despite coming in a little stronger than that seen of late the economy remains mediocre at best driven primarily by low interest rates, reckless credit growth and easy money.
Pending home sales slipped substantially in January with a 4.7% decline, after all regions fell into the red for the month. On a year ago basis all regions were negative as well, the West marked a 13th consecutive month in the red.
Agricultural prices fell sharply in January with a 6.2% decline on weakness in commercial vegetable, dairy, egg, and poultry products. Prices paid at the farm level increased .6% for the month and 2.7% on a year ago basis.