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Sharp Losses
The Market Bull 2019

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The Market Bull – January 22, 2019

The major averages finish the day with sharp losses on generally disappointing data. Real estate booms turn to busts in Australia and Canada. The Brexit fiasco continues and China reports some of the worst economic data in a very long time.

Existing home sales missed expectations substantially in December at 4.99 million units annualized. Month’s supply fell to 3.7, while the median price slipped 1.4% for the month to $253,600 a figure just 2.9% higher than a year ago.

All regions declined, the Mid-West fell double digits down 11.6%. With no ready one-off excuses like the government shutdown or natural disasters for the poor result it would seem a reflection of the market itself. Indeed with Chinese hot money beating a hasty retreat in the face of the trade war it appears that US real estate markets are faltering as well. While I’m indeed very concerned about this, I’m not ready to ring the alarm bells just yet.

With Trump’s debt funded tax cut entering its second year it turns out to be better for business than originally estimated to the tune of 600 billion dollars.

With the benefit of a little hindsight. Had there been an accurate assessment at the time, the cut would have exceeded budget rules. Meaning, that effectively, the administration had to lie to get it passed. With this funded by debt, along with our splendid little wars the citizenry of the republic will ultimately be the ones that end up paying for it.

Standard and Poors 500 Index closed at: 2,632.90 down 37.81
NASDAQ finished the day: 7,020.36 down 136.87
Gold ended trading at: $1,283.60 up $1.00


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