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Share the Wealth – May 16, 2018

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Registered Investment Adviser Caleb Lawrence 

Despite generally disappointing data the major averages enter the final hour with modest gains. As the trade war rhetoric fades into the background. Trumps odd exemption for Chinese Telecoms company ZTE becomes clear following a 500 million Dollar Chinese loan to a private Trump real estate project in Indonesia, imagine my shock.

The Treasury International Capital Flows or TIC report showed foreigners to be willing buyers of securities in March with 61.8 billion in net purchases, a 6-month high. Agency and corporate bonds were very popular, equities were sold off and to a lesser extent Treasuries as well.

The Mortgage Bankers Association reports that mortgage activity fell 2.7% last week as refi’s dropped 3.8% and purchase apps slipped 2.1%. The 30-year contract rate for a Jumbo loan increased to 4.73%. Delinquencies fell to 4.63% in the first quarter, but foreclosure starts increased for the 1st time in a year hitting .28% during the period.

Housing starts fell 3.7% in April on a large drop in multi-family construction to 1.287 million units annualized. Permits slipped 1.8% to 1.352 million units annualized. An important series, it has wobbled considerably in the last 6-months, but so far, the upward trend remains intact.

Industrial production beat expectations with a .7% gain in April on strength in Utilities and Mining activity. Capacity utilization advanced for a 3rd month reaching 78%.


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