The Market Bull – June 28, 2019
The major averages last minute charge helped them to close with modest gains. As expected, the trade war continues, and looks to expand in Europe. For the week the Standard and Poors 500 Index is up 9 points or .3% while the NASDAQ has lost 35 points or .44%.
With the 2nd quarter about to close FactSet Research notes that of the 113 Standard and Poors 500 companies issuing earnings guidance so far 87 have issued negative guidance. A figure second only to the 92 seen in the first quarter of 2016.
Agricultural Prices fell for the first time in 4-months, slipping 1.1% in May. On a year ago basis prices are down 3.1%. Weakness was noted in Commercial Vegetables, off 8.4%, and Fruit prices down 6.6%. Declines were broad based and included all categories except Feed Grains, Hay and Dairy Products. Tariffs and the trade war with China continue to put considerable downward pressure on agricultural prices.
The inflation measuring Personal Consumption Expenditures Deflator or PCE gained .2% in May. On a year ago basis the rate of increase slipped to just 1.5% far below the Fed’s 2% desired target.
Personal Income advanced a respectable .5% in May on strong gains in Asset Income and small business or Proprietors Income. Wage gains weakened to just .2%, a 6-month low.
Personal Spending increased .2% in May on a big jump in Durable Goods spending. The Savings rate was unchanged at 6.1%. As is the case for quite a number of important economic series the trade war and tariffs continue to pose significant downside threats. With no resolution to the Chinese trade war and a material risk to a dramatic escalation of the nascent trade war with Europe, risks to the downside for the economy are substantial.
Standard and Poors 500 Index closed at: 2,941.76 up 16.84
NASDAQ finished the day: 8,006.24 up 38.49
Gold ended trading at: $1,413.80 up $1.80