Equities and the Economy:  

• Both U.S. and global equities continue to advance.
• Trumponomics driving the market.

All three major U.S. bourses closed higher on Friday. The Dow added 97 points, 0.48%, to 20,269 (note that’s solidly above 20,000), the S&P 500 finished 8 points up, 0.36%, at 2,316, a new record high, and the Nasdaq posted a gain of 19, 0.33%, to 5,734. Being we’re not day traders, let’s look at the week which is more important to us. It was a good one with all three indexes rising with the bellwether S&P index rising 0.81%. It’s not only U.S. stocks that are doing well. Globally equities are rising. The MSCI World Index closed on Friday at a record high up 0.51% on the week adding to gains of 3.63% on a y-t-d basis. The more volatile MSCO Emerging Markets Index is screaming higher being up 7.87% since the start of the year.

The driver since the election has been the expectation that President Trump’s fiscal policy will drive growth. On Friday he announced he’ll roll out a “phenomenal tax plan” in the next few weeks and when announced investors jumped all over it.

Turning to the fundamentals, which along with demographics ultimately drive the market, import prices rose 0.4% in January which was more than the 0.2% forecast meaning inflation pressures are out there. On the mildly disappointing side, preliminary consumer sentiment for February came in at 95.7, below the forecasted 98.5.

This morning equities continue their march higher with the Dow up a hefty 117 points.

Oil

• Oil prices close Friday at their highest level in February.
• Still waffling around $53 basis WTI.

Although oil prices closed at the highest level in February with WTI climbing 86¢ closing at $53.86 and Brent settling up $1.07 at $56.70, on a broader basis WTI is still trading broadly around the $53 level it’s been at since the beginning of December. On Friday prices found support from the France based IEA which said it expects particularly high levels of compliance with the “OPEC and friends” deal in the region of 90%. Additional bullishness came from Goldman Sachs which said it sees the oil market moving into a production deficit from the second half of 2017 despite a higher U.S. rig count (think they have a position on???). Speaking of the rig count, Baker Hughes released it rig count report showing the U.S. rig count rose 12 last week (8 oil, 4 natural gas). This is the 4th consecutive week the rig count has risen. The oil rig count is up 275 rigs, a whopping 87%, since its low back in May 2016.

This morning oil is being sucked back to the $53 anchor being down 84¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Natural gas falls another 10.7¢ on Friday.
• Warm forecast is estocading the bull.

Natural gas prices remain on the defensive as warm weather has played matador to the bull. On Friday the March Nymex contract fell another 10.7¢, 3.4%, closing at $3.03. This morning natty is down another 5.3¢ dropping below $3.00 for the first time in nearly 3 months and is down 25% from their recent high which was in December. Today’s weather forecast shows above normal temperatures for the 6-15 day time frame which takes us to the end of February. And do you know what that means? Barring an anomaly, winter is over.

Elsewhere

Today in history:

1542: Catherine Howard, the 5th wife of Henry VIII is beheaded for adultery.

1689: the British Parliament adopts the Bill of Rights.

1866: Jesse James holds up his first bank.

1936: First social security checks are put in the mail.

1949: A mob burns a radio station in Ecuador after the broadcast of H.G. Wells’ “War of the Worlds.”

1970: General Motors is reportedly redesigning automobiles to run on unleaded fuel.