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We Have No Idea
The Market Bull 2019

 
 
00:00 / 2:47
 
1X
 

The Market Bull – February 11, 2019

The major averages were unable to hold their opening gains entering the final hour about even. As another round of likely fruitless trade talks gets underway with the Chinese.

The International Monetary Fund or IMF cut its global economic growth target in July, October, and January when it fell to 3.5%.

With their latest estimate of growth the usual numerical figure was replaced with “We Have No Idea”. The IMF director Christine Lagarde went on to cite, trade wars, rising interest rates, Brexit and a faltering Chinese economy as the primary downside risks.

Despite brisk 4th quarter car sales, Tesla continues to struggle with Model 3 deliveries down by about ½ to begin the year as layoffs mount as the automaker tries to conserve cash and generate profits in the face of dwindling tax subsides and price cuts. Despite Model 3 reservations hitting some 500,000 last year, just 145,610 units were delivered in 2018, which begs the question what happened to the other 350,000 and why are deliveries plunging to begin the year?

A closer look at the Federal Flow of Funds report for the 4th quarter of 2018 shows some interesting details. American consumers collectively added 179 billion to their outstanding pile of student, auto and credit card debts, a 4.7% rate of growth in the 4th quarter from a year ago. The additional debt accounted for just about 1/3 of the economic growth seen last year as measured by Gross Domestic Product or GDP. Consumer debt is now 52% higher than the previous peak set in 2008.

Auto loans and leases hit a record 1.155 trillion at the end of last year. Student loans totaled 1.57 trillion while credit card debt came in at 1.04 trillion Dollars, all are record highs, because nothing screams success like record debt.

Standard and Poors 500 Index closed at: 2,709.79 up 1.92
NASDAQ finished the day: 7,307.90 up 9.71
Gold ended trading at: $1,311.90 down $6.60

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