The Market Bull – January 23, 2019
Another volatile day sends the major averages into the final hour about even. The dysfunctional political circus in Washington continues. The 6th round of trade talks with the Chinese designed to avert a full-blown trade war is once again failing over Intellectual Property or IP issues as the Whitehouse seems unwilling to compromise on this. With the country adrift in a political fiasco as it and the economy circles the drain. The self-imposed shutdown should start to materially impact the economic data in February. Additionally should resolving the trade war with China prove unworkable then the 90-day stay of execution on the tariffs jumping to 25% will hit the economy as well. Producing job losses, noticeably higher consumer prices at a time when they can least afford higher prices, and a host of other negative economic effects. Including less foreign direct investment or put another way the hot Chinese money that has driven many a real estate market to new bubbelicious highs will disappear, just like that. In fact I would wager this is most of the reason why various markets are already faltering, a process that shows little if any sign of letting up. Meanwhile the pundits and various so-called experts stand around and wring their hands, exclaiming “I have no idea” or the other standard, “who could have seen this coming”. When both statements are patently false and a sign of either a dangerous level of ignorance or a flat out lie.
After 2-weeks of double-digit gains on lower interest rates the Mortgage Bankers Association reports that its mortgage activity index fell 2.7% last week as refi’s slipped 5.3% and purchase apps dropped 2.2%.
The 30-year contract rate for a jumbo loan increased 6 basis points to 4.59%.
The Richmond Fed regional index spent a second month in the red at -2 in January, despite a 6-point gain from December.
New orders were sharply negative at -11, employment advanced 5-points to 19.
Standard and Poors 500 Index closed at: 2,638.70 up 5.80
NASDAQ finished the day: 7,025.77 up 5.41
Gold ended trading at: $1,281.90 up $1.50