1. The S&P is now below its 50-day moving average for the first time since Trump was elected president. That was yesterday, and today the DOW Jones Industrial average dropped another 138 points, with all of that decline happening after news of the bomb being dropped came out around midday.
2. 10-year bond note has dropped below 2.3% for first time since the middle of November, and yields went further down today. That seems to indicate some kind of "flight to quality" where people aren't willing to keep their money in stocks for the time being. This seems especially true with the markets being closed tomorrow for Good Friday, and Wall Streeters not wanting to be caught with stocks in case these dimwits make another dumb move that puts
this country at further risk.
3. Also noteworthy is that the monthly Treasury statement was released yesterday, which is a nice benchmark report since March 31 marks the halfway point of the Federal Fiscal Year. And the numbers were not good.
The Treasury Department reported Wednesday that the deficit in March totaled $176.2 billion, compared to $108 billion in March of last year. A big part of that increase reflected $42 billion in April benefit payments that were shifted into March because April 1 fell on a Saturday this year.Sure, the $42 billion in added April spending added to that deficit, but if you take out that one-time quirk, the US still had its deficit go up by $26 billion compared to March of 2016, and our year-to-date deficit would still be higher than it was last year. And even if we were to match the figures from the last half of fiscal year 2016, the US would end up with a higher deficit...even if you adjust for that $42 billion in spending. And that's not what the Congressional Budget Office was predicting in January.
Through the first six months of this budget year, the deficit totals $526.9 billion, up 14.7 percent from last year's six-month total of $459.4 billion.
US budget deficit FY2016 + FY2017
2016 $585.6 billion
2017 (Jan proj) $559 billion
Adj. 2017 (if next 6 months match 2016) $611.1 billion
The main problem is low revenue growth- with receipts being down $3.1 billion compared to where we in March 2016. Even more worrisome is that tax refunds would be expected to be behind last year’s total, partly due to there being no leap year (so 1 fewer day has been processed in FY 2017 vs 2016), and partly due to some refunds being delayed due to extra scrutiny being given to the Earned Income Tax Credit and certain child tax credits.
But you wouldn’t know it from the last two months, as February’s revenues were up by less than 2% vs 2016, and March fell by nearly 5% vs 2017. And Trump and the GOP Congress are still planning to put in tax cuts while blowing millions in bombs in light of this situation? Are they kidding?
We’re not in any kind of economic emergency at this time, but none of this week's events indicate we're feeling the “Trump Boom” that the Wall Street greedheads and Wisconsin budgeteers were counting on. And with GDP, retail sales and inflation numbers all being released in the next couple of weeks, I think it’s worthy to keep aware, as it doesn’t seem like things are as cheery as many "financial journalists" would like you to believe.