The Market Bull – February 7, 2019
With comments circulating that the rumored meeting between President Trump and Chinese Premier Xi prior to the March 1st deadline to avert sharp increase in tariffs seemingly a nonstarter. The major averages plunged in early trade and closed with large losses.
Consumer credit more or less matched expectations in December with a 16.5 billion Dollar gain.
Led by non revolving credit once again, essentially student and auto loans that accounted for 14.8 billion, revolving or credit card debt made up the balance for the month.
With data out of China showing increasingly negative economic effects of the trade war, Chinese asset buying is rapidly coming to a screeching halt sending formerly hot real estate markets around the globe into turmoil, including Australia, Canada, Europe, and the USA amongst others.
Economic data out of Europe shows that Germany is very nearly in recession, while Italy is in recession with two consecutive quarters of negative economic growth. The Brexit fiasco is putting increasing pressure on the British economy as it clearly struggles with inept government policy and uncertainty, sending the Pound sharply lower as economic growth forecasts get slashed. France has problems of its own as the yellow vests’ protests grind on and the economic data increasingly goes south. If the Eurozone isn’t already in recession it will be soon.
As I always suspected attempting to normalize interest rates in a world full of record or near record debt levels would prove unworkable as it increasingly looks like central banks in Europe and the US will be cutting rates before too much longer.
Standard and Poors 500 Index closed at: 2,706.05 down 25.56
NASDAQ finished the day: 7,288.35 down 86.93
Gold ended trading at: $1,313.80 down $.60