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Registered Investment Adviser Caleb Lawrence 

After opening lower, the major averages struggled into the final hour essentially unchanged on the way to producing another low volatility day. The quiet before the storm, or a new paradigm?

The September CreditForecast shows consumer credit growing at a 4.4% annualized rate on strength in mortgage demand. The 55 billion Dollar increase to 12.4 trillion marks a new record high for the series eclipsing the previous peak set in 2008 as the wheels came off. Delinquencies increased to 2.76% on incremental gains across mortgages, auto and bankcard lines, but remains very low.

The September Producer Price Index or PPI advanced .4% pushing the annualized rate to 2.6% with energy prices leading the way once again on a 10.9% jump in prices for Gasoline.

Recent data from the California Association of Realtors or CAR shows a second consecutive year ago fall in pending home sales for the Greater San Francisco Bay Area after an 11.6% decline in August, this follows an 11.5% drop in July. Outside of the Bay Area, Santa Cruz County saw a 12.1% decline in Pending Home Sales while Monterey County fell 12.5%. Brokers indicated a lack of affordability and inventory for sale as their primary sales challenges. While not a trend, this represents another soft data point related to real estate, and it’s worth noting that when inventory spikes, meaningful price declines aren’t far behind.

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