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Economic Data Still Points to Softening

Yesterday we had the leading economic indicators which came in softer than anticipated. For the 8th month in a row LEI came in soft—certainly the equity markets don’t care –just lots of partying.

Today we had existing home sales shown to be heading lower- 14.6% below a year ago–BUT the median price was up 3.4% from a year ago. This is no surprise as the ‘haves’ which many times are older demographics with lots of coin in their pockets continue to vie for limited inventory. The ‘have nots’ are happy to stay put with their 3.5% mortgage–screw’em they say. Mortgage rates are down from the high–but not really enough for folks to list their property, sell and buy something else with a 7.25% rate.

The 10 year treasury remains trading in the the 4.40 area–but drifting slowly lower. Equity prices are drifting lower today–for no particular reason except folks have to pocket a little profit somewhere I guess.

Today I do nothing–maybe stare out the window and watch the birds. My little Bridgewater Bancorporation preferred is taking a decent bounce higher to $16.06–nicely above my buy price yesterday at $15.52 and $15.60 last Friday. Maybe folks are looking for ‘bargains’–but this has happened many times and with thin volume (although heavier today and yesterday) it only take a couple thousand shares to send it back down. We’ll see.

4 thoughts on “Economic Data Still Points to Softening”

  1. Yes this has been a continuation of lower LEI’s for over a year? The Coincident indicators have been positive to flat. Sooner or later something has to give. Whatever happened to the 3-5 year business cycle?

    1. Payday, Be careful what you wish for. In the construction business I had contractors busy from about 2001 to 2008 when Greenspan had lowered rates they were complaining they were so busy they couldn’t take time off. One guy I hired for work on a Sheetrock repair told me he hadn’t taken a day off in a month. He said he was working that hard because he knew there would come a time when jobs would be far and few. He had to wait a long time on that last cycle

  2. My radar still thinks we’re not into the land of Utopia yet when it comes to the markets. But, what the heck do I know? I did buy TLT a couple weeks ago pre-market at $82.31, so I almost bottom-ticked it. That’s the good news. The bad news is that I only bought 2 shares to monitor it…LOL. Woulda been nice to take on the 2-300 shares I was thinking to do since it’s at $90.50-ish this morning

    1. I wouldn’t worry about it too much. 4.4% on the 10 year is the critical support that needs to break st least on a daily candle and it has not yet. Now we just need to see any bounce not exceed 4.6-4.7% and watch the next drop go thru that support. Then it’s party time with TLT.

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