Thoughts to Ponder and The Market Update April 17

 

Thoughts to Ponder . . .

• You can teach a cat to do anything that it wants to do.
• Some people have “aha” moments, I just have “You’ve Got to be Kidding Me?” moments.
• Luckiness top moment: To get run over by an ambulance.
• When I read about the evils of drinking, I gave up reading.
• If at first you don’t succeed, order some pizza.

 

And Now on to The Market Update . . .

Trump euphoria certainly appears to have ended in the minds and hearts of investors.

• The stock market finished the week down once again by a total of 223 points.
• Markets are closed on Friday in observance of Good Friday.

 

The challenge to the market is that with each passing week, it appears that President Trump will continue to have major headwinds working against him in passing tax reform along with his other economic stimulus ideas touted during his run on the campaign trail.

• Although, almost every President runs into challenges implementing the ideas and changes from their campaign, investors had very high hopes that the new administration would be able to facilitate changes rapidly that would have an immediate impact on corporate profitability.

 

Mortgage rates have been steadily declining and have returned to the lowest point for 2017.

• Although refinances have yet to show signs of resurgence, purchase applications increased last week by 3.0 percent according to the Mortgage Bankers Association of America.

 

In the labor markets, first time jobless claims continue to remain extremely low.

• The latest report for the week ending April 8^th shows claims all the way down to 234,000.
• This was below most analysts’ expectations and continues to float at all time historical lows.
• Continuing claims also remain very low.
• Overall, the labor markets are considered to be at “full employment”.

 

If you have been listening to the Fed for a number of years, they have been focused on getting inflation to the range of about 2.0 percent per year.

• Once again, it seems like consumers are making it almost impossible for this to occur.
• Although in the last few months we have seen inflation tick upward on both the wholesale and retail levels, the latest reports may have thrown a monkey wrench into the likelihood that the trend will continue.

 

The latest PPI for the month of March showed that prices on the wholesale level declined by 0.1 percent.

• Experts were expecting the latest results to either be flat or show a slight increase.
• Pricing on the consumer level declined by a shocking 0.3 percent, while analysts were looking for prices to rise by 0.2 percent.
• Even when the volatile food and energy prices are removed from the CPI, prices still declined 0.1 percent.
• It is too early to tell, but the lack of price growth may have an impact on the Fed’s decision to put forth another interest rate increase anytime soon.

 

This week’s potential market moving reports are:

• Monday April 17^th – Housing Market Index
• Tuesday April 18^th – Housing Starts, Industrial Production
• Wednesday April 19^th – MBA Applications
• Thursday April 20^th – First Time Jobless Claims, Leading Indicators
• Friday April 21^st – Existing Home Sales