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Registered Investment Adviser Caleb Lawrence

The irrational exuberance melt up continued this week with the Dow Jones industrial average on track for 26,000 by the end of the month. The NASDAQ gained 120 points or 1.7% for the week while the Standard and Poors 500 Index is up 41 points or 1.5% since Monday.

The December Consumer Price Index or CPI advanced .1%, on a year ago basis the series is 2.1% higher, despite a significant drop in energy prices for the month. This marks a 4th consecutive month at 2% or better and ahead of the Fed’s desired 2% target.

Business Inventories increased .4% in November on a big jump in wholesale inventories, rebounding from the previous 2-months anemic figures.

December retail sales missed expectations with a .4% gain. That said the final 4-months of 2017 featured robust sales gains across most categories. An odd series, while sales were weak from February through June it’s hard to reconcile the sales data with the record number of store closing seen in 2017 as the figure exceeded the total recorded in the depths of the previous crisis in 2008. Data such as this combined with a 4.1% unemployment rate and yet little in the way of meaningful wage gains makes it difficult to embrace the everything is going great theme pushed by the mainstream media, because if it was we wouldn’t have these types of glaring inconsistencies.


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