Registered Investment Adviser Caleb Lawrence
After opening higher, the major averages plunged late morning on mixed economic data though the political discourse and dysfunction in Washington seems to be increasing rapidly.
The Chicago Fed National Activity Index gained .39 in June to +.13 on broad based gains, the 3-month moving average advanced .1 to +.06 indicating more muddle along economic activity.
Durable Goods orders surged 6.5% in June, the largest gain in 3-years on an outsize advance in aircraft orders. The proxy for business spending non-defense capital goods excluding aircraft fell .1% for the month. A volatile series one month means little as large aircraft orders lead to substantial volatility.
The goods trade deficit slipped 2 billion in June to 63.9 billion as exports advanced 1.8 billion and imports fell .7 billion. This report should add to 2nd quarter economic growth.
Wholesale and Retail Inventories posted another significant gain in June up .6% led by durable goods and notably autos whose inventories have reached worrisome levels particularly for GM.