Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour about even following the Fed’s well telegraphed rate hike. As per usual the accompanying statement was dissected in detail, but really it says little that is unexpected. That said the ¼% hike will likely flatten the yield curve even more. This also marks the 6th consecutive ¼% increase, and seven if you count the late 2015 increase. Historically rate increases usually derail the stock market and the economy after about 4.
Mortgage activity slipped back into the red this week falling 1.5% as refis and purchase apps both dropped 1.5% as well. The 30-year contract rate for a jumbo loan increased slightly to 4.74%.
Wholesale prices as measured by the Producer Price Index increased .5% in May, led by energy prices again to reach 3.1% on a year ago basis. This happens to be about the long-term average for this series.
Lost in the shuffle today was the restarting of our trade war with China, as tariffs are expected to be applied later this week or early next after the Trump administration rejected China’s latest offer. Also of note Trumps corporate pardon for Chinese Telecom company ZTE seems to be headed for the scrap heap with various Congress critters keen on revoking the company’s corporate charter to operate in the US, effectively a corporate death sentence. Not really noteworthy until you stop and consider that ZTE was accused of spying on Americans who used their smart phones. The banksters on the other hand nuked the entire economy, domestic and global, got bailed out with billions and billions of taxpayer Dollars and continue to act with impunity, pursuing their business model of lie cheat and steal. Only one bank that I can remember was threatened with revocation of charter, at the state level no less. Standard Chartered Bank based in New York after they got caught, I believe for a 3rd time laundering big time money for known terrorist organizations and drug cartels. But the Federal government stepped in for some reason and said no to the idea.
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