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Caleb Lawrence – KPIG-KPYG Radio – Share the Wealth – March 7, 2017

After a brief early rally the major averages enter the final hour with small losses on little real news. Continuing the soft data hard data disconnect theme Gallup reports that consumer spending hit an 8-year high with consumer confidence hitting a record high in February all seemingly on Trump’s election win. Once again confidence surveys are worth little as consumers frequently say one thing and do another.

The January Trade Deficit hit 48.5 billion as imports advanced 2.3% to 240.6 billion while exports gained .6% to 192.1 billion. The good news is that trade volumes have increased steadily over the last 6-months or so reversing their recent decline. With import growth outstripping exports these figures will subtract from 1st quarter Gross Domestic Product or GDP. In fact the Atlanta Fed GDPNow model has been cut again to just 1.3% for the quarter, others have fallen to just 1%, this as odds of a Fed rate hike reach 95% because the economy is doing so well.

The first quarter retail bloodletting hits its stride with Neiman Marcus looking to restructure it onerous debt load and avoid bankruptcy something that BCBG, HH Gregg and others have already succumbed to as mall traffic dwindles. Partly this is due to the success of online retail but weak consumer spending is also a factor.

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