Registered Investment Adviser Caleb Lawrence
Volatile early trade sends the major averages into the final hour about even following the sharp losses of the last few days that will enter the record books. Another large multinational company failed, Capita, while the Steinhoff collapse costs domestic banks in excess of a billion Dollars. The Crypto currencies got battered again, Bitcoin tests $6,500 and some 370 billion Dollars or about half of the total value of crypto currencies has been erased in a little over a month. While a very significant loss to be sure this doesn’t come close to matching the scale of the Dot-Com collapse, but it could yet prove the trigger. Liquidity issues have also led to a few markets and issues seizing up as volatility surges pushing the VIX Index above 40, lets hope it doesn’t stay there, or move higher. That said when everybody and their dog piles into the markets using leverage, aka credit, ignoring important fundamentals like diversification, record extreme levels of margin debt and valuations these types of events are prone to happen.
The December trade deficit increased 2.7 billion to 53.1 billion. Exports advanced 3.5 billion while imports jumped 6.2 billion. This report will subtract from 4th quarter economic growth. That said trade has increased nicely from the early 2016 lows.