Registered Investment Adviser Caleb Lawrence
The major averages recovered some of their early declines after disappointing earnings from the retail sector spooked the markets in early trade, entering the final hour with small losses.
The April Producer Price Index or PPI handily beat expectations with a .5% gain for the month. On a year ago basis the PPI is up 2.5% on large gains in intermediate and core unprocessed goods prices.
The Fed’s 1st Quarter Senior Loan Officer Survey provided another snapshot of loan and credit data. Default and delinquency rates continue to move markedly higher while loan demand surprised many when it fell sharply. Commercial and Industrial or C&I Loan demand fell substantially again and will probably be negative on the next series. Weaker demand and tighter standards were reported for most commercial real estate lending. The report went on to note that despite record high consumer loan balances and easing standards demand for credit card and auto loans also declined meaningfully, implying debt saturation as lending standards were eased during the period.