The Market Bull – June 17, 2019
Despite some disappointing economic data, the major averages closed with small gains to begin the week, odds of a trade war truce with the Chinese look slim.
The New York Fed Manufacturing Survey slumped the most on record in June plunging 26.4 points to -8.6. Weakness was pronounced across the board, price data was mixed.
The April Treasury International Capital Flows or TIC report saw a net gain of 46.9 billion as foreigners eagerly bought Agency Bonds, Treasury Bonds and Notes. Stocks sold off again, a 12th consecutive decline, as did Corporate Bonds.
From the land of “how’d they do that?” We get a piece on Deutsche Bank market cap of 14 odd billion, spinning off a “bad bank” with assets of 50 odd billion in an attempt to clean up its act. The wonders of modern accounting and derivatives. The report went on to note that the bank supposedly has 260 billion in cash and liquid securities as well. Just another story that underscores how fake so much of the recovery has been in the last 10-years. As this story basically shows what many suspected, that Deutsche Bank was effectively insolvent, and playing games. How it is that no one goes to jail for this kind of thing is beyond me.
The trade war with India escalated today with India applying retaliatory tariffs on some 290 million in US goods following our imposition of tariffs on Indian steel and aluminum last year. Once again, the trade war and related tariffs hit agricultural producers hard, this time its California Almond Growers in the crosshairs. In another example of trade war economic fallout, which I expect to be severe, Chinese imports from the USA are falling sharply.
Standard and Poors 500 Index closed at: 2,889.67 up 2.69
NASDAQ finished the day: 7,845.02 up 48.37
Gold ended trading at: $1,343.10 down $1.40