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Registered Investment Adviser Caleb Lawrence 

The major averages struggled in early trade on little substantial news, entering the final hour about even. Doubts about Trump’s tax plan grow rapidly as it appears to follow the classic Republican play book, cut taxes for the upper income groups, this leads to more economic activity which pays for the deficits, aka the thoroughly discredited Laffer Curve. If the Republicans can’t get Obamacare repealed I seriously doubt they have the political capital or consensus to pass tax reform.

The Trade Deficit slipped 2.2 billion to 62.9 billion in August as exports increased .3 billion and imports fell .7 billion. Inventories gained 1% in August, a 4th consecutive meaningful increase and like the trade data should add to 3rd quarter economic growth that said sales don’t seem to be tracking inventory growth, implying negative economic trends but will see.

Final 2nd quarter GDP or Gross Domestic Product was revised up to 3.1% on improvements to consumer spending and fixed investment. Final sales advanced 2.9%, real disposable income was up 3.3% while the personal savings rate slipped to 3.8%, respectable numbers just the same. So far real or inflation adjusted 2017 GDP growth has averaged an anemic 2.15%.

The Kansas City Fed regional index gained a point in September to 17 despite a 15-point plunge in new orders to 10. The rest of the data was unremarkable.

Rounding out the days economic reports, Agricultural Prices fell for a 5th month in July down 2.9% on weakness in commercial vegetable and meat prices. That said this series remains 5.3% higher than a year ago.


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