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Small Gains
The Market Bull 2019

00:00 / 2:19

The Market Bull – July 22, 2019

The major averages finish with small gains to start the week seemingly unconcerned about Iran seizing two British tankers in the Strait of Hormuz.

The Chicago Fed National Activity Index was negative for a 7th consecutive month in June despite a small improvement to -.02. The 3-month moving average increased fractionally to -.26. -.7 is generally considered a recession for this series.

As has been the case with previous Republican tax cuts the promised benefits of Trump’s tax cuts have failed to appear. The idea behind slashing corporate tax rates was to get companies to repatriate foreign profits and spur a domestic capex boom, creating large numbers of jobs in the process. While long on promises and rhetoric the tax cuts have delivered little, much like Trump in general, once you get passed the grandstanding there is little substance. So, while Trump is quick to wield tariffs as an economic weapon, his tax cuts actually encouraged more offshoring and corporate tax avoidance. Most of the funds that did get repatriated found their way into stock buybacks that jumped 52.6% to 583.4 billion through the first 3-quarters of 2018 compared to 2017. Over the same period capital investment increased just 8.8%. Research and Development advanced 12.5% over the same period. A process that largely benefitted shareholders and the company’s executives while doing little for your average American on the street.

Standard and Poors 500 Index closed at: 2,985.03 up 8.42
NASDAQ finished the day: 8,204.14 up 57.65
Gold ended trading at: $1,425.40 down $1.30


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