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Registered Investment Adviser Caleb Lawrence

Volatile early trade gave way to modest gains into the final hour on mixed data. North Korea gets threatened again, another hurricane bears down on the south east and Kentucky admits that its pension programs are grossly underfunded. The current account deficit increased to 123.1 billion in the 2nd quarter, on weakness in income payments.

The Treasury International Capital or TIC report fell sharply in October dropping to just 1.3 billion, a 7-month low. Treasury paper and equities sold off, while agency and to a lesser extent corporate bonds remained popular. Demand for equities has now fallen for two consecutive months.

Trade prices jumped .6% in August as energy costs surged. Import prices increased .6% snapping a string of declines. Export prices advanced .6% as well a second notable gain. On a year ago basis import prices increased 2.1% while export prices advanced 2.3% both back above the Fed’s 2% target. Almost all of the gains are being driven by energy prices which jumped 4.8% for the month.

Housing starts fell again in August down .8% and a 5th decline in the last 6-month’s as multi-family or rental starts continue to fall sharply. Permits however increased 5.7% but have been very volatile of late. Completions slipped again down 10.2% for the month.

State and Local Tax Revenue grew 2.3% in the 2nd quarter, on strength in sales, corporate and severance taxes. Individual income tax receipts slipped 1.1%.

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