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Registered Investment Adviser Caleb Lawrence 

The major averages kick off the week with a value driven by the dip bounce entering the final hour with significant gains, but will it hold given the level of uncertainty? Bitcoin retests the $8,000 level.

The Chicago Fed National Activity Index gained .76 in February to .88. the 3-month moving average advanced to .37 indicating more ok economic growth going forward, per an index that covers some 85% of the economy. That said 1st quarter GDP or Gross Domestic Product estimates have slipped below 2% so will see.

The Texas Fed regional manufacturing index fell 15.8 points in March to 21.4 on large declines in new orders and employment. Price data remains high.

The primary hallmark of an asset bubble is debt, or the amount of leverage used to speculate on the asset in question, something to keep in mind given the record or near record levels of debt nearly everywhere you look. Last year’s market advance saw margin debt as per FINRA or the Financial Industry Regulatory Authority expand by 112.2 billion to a record high 642.8 billion a figure some 60% higher than that seen in July of 2007, the previous peak. Indeed the 2017 surge was the 5th largest 12-month jump in margin debt behind the 12-month periods ending with December 2013, July 2007, March 2000, and November 1997. In fact, the surge off the 2007 lows has seen margin debt increase at a rate twice as fast as economic growth and 3-times as fast as the Consumer Price Index of CPI. History may not repeat, but it often rhymes.

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