Registered Investment Adviser Caleb Lawrence
Despite record share buy backs and announcements and a nearly complete 1st quarter earnings reporting season for the Standard and Poors 500 Index that not only exceeded already lofty expectations it will also go down as one of the best reporting periods in a number of years. The major averages have struggled to maintain a positive return so far this year.
Durable Goods orders fell 1.7% in April missing expectations on weakness in nondefense capital goods. The proxy for business spending non-defense capital goods ex-aircraft increased 1% for the month.
You know your very late into the credit bubble when in addition to record levels of debt you see cash out refi activity hitting a 10-year high as consumers rush to consolidate loans in a rising interest rate environment. The report from the Federal Housing Finance Agency showed cash out refi activity hitting levels seen in 2009 as the housing bust was in full stride and also 2005 when it was really heating up. Store branded credit cards also show sharply rising delinquencies, a function of variable interest rates, in an environment featuring record debt and higher interest rates.