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Registered Investment Adviser Caleb Lawrence


The major averages failed to build on yesterday’s gains following mixed news entering 
the final hour with modest losses.  The international trade imbalance slipped 1.1 
billion to 46.5 billion in May, imports fell .3 billion while exports increased .8 

Mortgage applications increased 1.4% last week as per the Mortgage Bankers 
Association or MBA with purchase apps advancing 3.1% while refi’s slipped .4%.  The 
30-year contract rate for a conforming loan increased 7 basis points to 4.2%.

The Institute for Supply Management non-manufacturing or Services Index gained .5 
points in June to 57.4, new orders improved but employment slipped for an index that 
covers some 88% of the economy.

The eagerly awaited Minutes from the Fed’s latest meeting on monetary policy show 
some surprising data points.  Despite poor correlation between soft economic data and 
the actual economy, mostly various consumer sentiment surveys the Fed seems to be 
favoring these as they provide a much more positive picture at present.  Another item 
of note inflation is expected to struggle to maintain the Fed’s desired 2% target, 
this implies continued weak end user demand.  Lastly the Fed’s balance sheet 
normalization process at 50-billion per month beginning in September will mean that 
about 6-years will be required to return the Fed’s balance sheet to its level prior 
to the 2007-2009 crisis assuming we don’t have any problems between now and then, and 
that is a very big if.


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