The Market Bull – April 29, 2019
The major averages closed with small gains on mixed economic data. The first quarter GDP figure looks increasingly suspect on close examination.
The First Quarter Gross Domestic Product or GDP number doesn’t stand up well to close scrutiny. The 3.2% headline number roundly beat expectations for a 1.8% gain on a big jump in inventories and trade data. Goods have to come from somewhere and during the period in question imports declined 3.7% while industrial production slipped .3%. leaving more than a few unanswered questions. Perhaps the upcoming revisions with clear up what is now a very muddy picture.
More odd numbers arrived in the income and spending reports for February and March compliments of the Bureau of Economic Analysis or BEA. As data shows that income is flat to down while spending increased anyway.
For the first quarter Personal Income advanced just .2% while spending increased .7%, The inflation measuring PCE Deflator advanced .2%. Income gains were led be rentals for a 3rd consecutive month up 1%. Small Business income fell for a 3rd month down 1.1%. Wages and salaries showed decent growth again.
On the spending side notable reversals were seen in autos and durable goods spending. The PCE Deflator gained .2% for the month on a big jump in gasoline and related prices. On a year ago basis it ticked up to a still very low 1.5% a 5th consecutive month below the Fed’s desired 2% target.
The Texas regional manufacturing index fell 6.3 points to just 2 in April on weakness in inventories and employment. Price data fell again and shows very little upward pressure at this point.
Standard and Poors 500 Index closed at: 2,943.03 up 3.15
NASDAQ finished the day: 8,161.85 up 15.46
Gold ended trading at: $1,282.10 down $6.70