Registered Investment Adviser Caleb Lawrence
Despite generally positive data the major averages struggle into the final hour mixed on lingering concerns over North Koreas latest missile launch, and interest rates as the curve continues to flatten.
3rd Quarter GDP or Gross Domestic Product was revised up to 3.3%, slightly better than expectations despite slowing consumer spending. Real or inflation adjusted disposable income also slowed markedly dropping to just .5% growth. Fixed residential investment, which tends to lead the economy into and out of recessions, fell for a second quarter down .2% and has fallen 4 of the last 6 quarters. The PCE or Personal Consumption Expenditures Index showed inflation of just 1.5% in the third quarter, well below the Fed’s 2% target.
Pending home sales managed a solid gain in October up 3.5%. That said this is only the second gain in the last 8-months for the series. On a regional basis almost all of the advance is a hurricane inspired bounce in the southern region, the West slipped .7%, a second decline in the last 3-months. On a year ago basis all regions and the national index declined except the hurricane bounce South.