Registered Investment Adviser Caleb Lawrence
The major averages recovered from early losses and hold large gains in the final hour on generally positive but not overly significant data.
The 2nd quarter Senior Loan Officer Survey showed that Commercial and Industrial lending standards eased for a 5th consecutive quarter. That said demand remains weak. On the personal loan side lending standards continued to tighten, while demand slips further. Student loans on the other hand continue to march steadily higher hitting 1.5 trillion in the first quarter. The combination of record debt levels and higher interest rates will likely prove toxic at the macro-economic level, as they did during the previous crisis.
The Mortgage Bankers Association or MBA reports that mortgage activity slipped .4% last week as refi’s dropped .6% and purchase apps fell .2%. The 30-year contract rate for a jumbo loan slipped fractionally to 4.65%.
Wholesale prices moderated again in April after the Producer Price Index gained a below expectations .1%. The year ago rate fell to 2.7%. Large declines were seen in food and to a lesser extent electricity prices.
Wholesale inventories increased .3% in March. This matched the .3% sales gain. Inventories increased markedly from November through February, so a slowdown was expected.