Equities and the Economy:

• Fed raises interest rates as widely expected.
• Fed guidance dovish.

For the third time since the financial crisis began, the second time in three months and the first time this year, the Fed raised interest rates. Yesterday increase was a widely expected ¼% taking the benchmark overnight interest rate to a range of 0.75% to 1.00%. The interest rate hike follows a slew of positive economic data including better than expected ISM manufacturing growth, strong consumer confidence reports and solid payroll gains with unemployment around 5% which many economists consider to be near full employment. Stocks rallied big on the news but it wasn’t the announcement of the interest rate hike that fueled the market but the guidance given by the Fed. They said further increases would be “gradual” with the outlook for 2 more rate hikes this year and an additional 3 in 2018. Investors were fearing a more aggressive policy. The less aggressive stance combined with Janet Yellen’s comments in her post-meeting press conference that the economy was on solid footing brought in buying. The Dow closed up a nice 113 points, 0.54%, at 20,950, the S&P 500 gained 20, 0.84%, ending at 2,385 and the Nasdaq posted a 43 point, 0.74%, gain.

There was a slew of economic data yesterday. The National Association of Homebuilders released its NAHB/Wells Fargo Index of homebuilder confidence which came in off the charts good at 71 for March compared to 65 in February. This is the highest level since June 2005 before the recession. The Labor Department reported that core CPI rose 0.2% in February and 2.2% annually. This is precisely what the Fed has been targeting. Retail sales and business inventories were also reported with nothing negative in them and coming in as expected

This morning the euphoria continues with Dow futures up 40 points.

Oil

• EIA weekly crude and products report confirms API report.
• Oli prices pop.

Yesterday’s DOE weekly crude and products report confirmed Tuesday evening’s API report stating crude and products inventories fell in aggregate 8.4 million barrels last week. This compares to a 5 year average rise of 140,000 in inventories. That data combined with a noticeably weaker dollar was fodder to the bulls and WTI rose a hefty $1.14 closing at $48.86 and Brent posted an 89¢ gain closing at $51.81. The dollar fell yesterday with the Fed giving the “gradual” rise message rather than aggressive. All that being said and per the EIA, U.S. oil production is at a 13 moth high at 9.1 million bpd and crude inventories remain near all-time highs. In addition, OECD crude inventories grew in January for the first time in 6 months and despite the cutbacks, OPEC reported the cartel’s production rose month-over-month in February despite 91% compliance by its members.

This morning WTI is sedate down 7¢.

Courtesy of MDA Information Systems, LLC

Natural Gas

• Natural gas posts small gain yesterday.
• Cold weather exiting.

Cash prices held in there yesterday on the lingering cold weather in the east supporting futures prices with the April contract closing up 4.3¢ at $2.981. Let’s move on to today for that’s where the action is. Natty is down 6.4¢ this morning on the overnight forecast showing warmer trends for the 11-15 day period bringing in above normal temperatures to the Midwest for that time frame. Additionally, we’re getting deeper into March which means HDD’s are rapidly decreasing so natural gas demand for space hearing will drop precipitously. Now before you get to furry (bears) per Platts, this spring it’s expected that 44 nuclear units will go through refueling which is a 48% increase from last year. That represents an additional 2.5 Bcf/d of load. Not an insignificant sum.

The EIA releases its weekly storage report today. A 57 Bcf withdrawal is expected.

Elsewhere

A couple of months ago the Consumer Electronics Show, the world’s largest consumer tech show, was in Las Vegas.  Here are some of the items displayed:

• A laptop from Razer Valerie with three screens.
• A full-body virtual reality suit by Hypersuit to better immerse you into the VR experience (that could get weird!)
• The Hair Brush from Keratase, L’Oreal and tech company Withings that monitors how you brush and then tells you if you’re doing it right or damaging your hair.
• For the scientist on the go there’s Nurugo Micro’s 400x microscope lens that attaches to your smartphone.
• And my favorite because I go to the gym, a padlock by Benjilock that uses your fingerprint as the key.