The Market Bull – November 9, 2018
The major averages finish the day with sizable losses. Since Monday the Standard and Poors 500 Index is up 55 points or 2%, while the NASDAQ has gained 63 points or .9%.
A recent report from Merrill Lynch on Trade and Tariffs shows that trade wars are bad for business and the economy, no surprise there. Another highlight is that trade wars tend to impact developed economies, such as ours more severely than developing ones. It’s still early but I suspect that this trade war will drag on. With tariffs set to hit 25% January 1st the real effects will start to bite hard a few months later, they won’t be trivial.
The October Producer Price Index or PPI which measures wholesale price changes came in sharply ahead of expectations with a .6% gain. This pushed the year ago rate up to 2.9% on strong gains in services and goods prices. Tariffs were cited as a likely culprit as one would expect. But much of the gain was attributed to energy prices and yet gasoline and oil prices both fell notably in October. Natural Gas prices advanced, but only slightly. The Consumer Price Index is expected to follow suit and I think most of the price gains are coming from tariffs. Not quite sure how Trump figures this is winning, but there you go.
Wholesale Inventories advanced .4% in September on another big jump in durable goods. Sales increased .2% but have softened notably in the last few months.
Standard and Poors 500 Index closed at: 2,781.01 down 25.82
NASDAQ finished the day: 7,406.90 down 123.98
Gold ended trading at: $1,210.2 down $14.90
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