Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour with large losses on little real news as it seems that rising interest rates, political scandals and the parade of fraud and theft surrounding the crypto currencies is becoming an issue as Bitcoin tests the $10,000 level again, a decline of almost half since it’s December peak of almost $20,000.
Agricultural prices snapped a string of declines in November with a 4.2% gain, the 1st advance in 6-months. Led by notable increases in poultry, egg, meat, and grain prices.
Recent advances in mortgage rates have seen them hit 4-year highs north of 4.5% so far real estate sales have held up, but you have to wonder. Of course, credit cards, auto loans and other consumer lending rates are on the rise as well, no doubt helping to push the savings rate to a 12-year low of 2.4%. This last piece belies the apparent strength of the labor market and headline decent gains in income of late, as most of the increases are not of the earned kind. As seen in the anemic disposable personal income gains. The last time we had record debt and such a low savings rate was November 2007, right before the wheels came off. I’ll note that valuations are far higher today than they were then for most asset classes including stocks and real estate to a large extent.