Equities and the Economy:

• Stocks consolidating.
• S&P still up 6.3% for the year.

A day after the Fed announced a ¼% rate hike and U.S. equities jumping, stocks treaded water yesterday with the Dow closing down 16 at 20,935 and the S&P 500 off 4 to 2,381. The Nasdaq managed to post a 1 point gain closing at $5,901. It may be that investors are looking at valuations and while justified are not seeing any fresh information giving reason for further buying. Remember, the S&P is up 6.3% for the year which extrapolates to 23% on an annual basis. Not gonna happen. We need to buy time. Maybe even pullback.

Moving on, the Labor Department released its weekly initial jobless claims report noting claims fell by 2,000 for the week and at expectations. The number of those receiving unemployment benefits fell 8.2% from the same period a year ago. As Martha Stewart would say, “That’s a good thing.” The Labor Department also released the Job Openings and Labor Turnover Survey (JOLTS) showing U.S. employers posed 5.626 million jobs in January up from 5.501 in December. Not only was this positive but the so called “Quits Rate” rose from 2.0% to 2.2%. A higher Quits Rate is indicative of a stronger labor market because a person doesn’t quit their job unless they feel confident they have or can get another. Lastly, the Commerce Department reported housing starts rose 3% on an annualized basis in February to 1.29 million units. This was the highest level in 4 months. There is definitely a shift going on in the housing construction market. Builders are shifting to houses from apartments. Single family starts rose 6.5% while multi-family starts fell 7.7%.

This morning calm prevails with the Dow up 3. Chatter.

Oil

• Oil prices close little changed.
• Saudi minister hints production cut agreement may be extended.

Similar to equities, oil prices ended little changed yesterday. WTI closed down 11¢ at $48.75 and Brent was off 7¢ to $51.74. It’s disconcerting that prices remain low in light of the fact that the U.S. dollar has fallen 1% since the Fed’s announcement on Wednesday which is bullish of commodities priced in the greenback. The most interesting news yesterday came from Bloomberg who interviewed Saudi Oil Minister Mr. Khalid al-Falih. The minster stated the current production agreement may be extended beyond June 30th if global inventories of crude remain “above average.” Mr. al-Falih is concerned, maybe even frustrated, about the rise in production here in the U.S. This is in contrast to statements made as late as last week that there was no assurance the production cuts would be extended.

This morning it’s quiet. WTI is up 11¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices retreat with cold dissipating.
• EIA’s weekly storage report neutral.

Yesterday morning’s forecast trended warmer for the 11-15 day period which put downward pressure on prices. The April contract fell 7.9¢ but interestingly, the calendar strips were little changed. In fact, while the front month has been very volatile of late, the calendar strips have not changed much. The EIA released it weekly storage report noting 53 Bcf was pulled from storage last week which came in pretty much at the expectation of 56 Bcf. Current inventories are 258 Bcf below last year and 395 Bcf above the 5 year average. This morning’s weather forecast is pretty much unchanged from yesterday’s with you folks in the Midwest and northeast getting a nice shot of spring at the end of the month. On another note, LNG feedgas hit 2.44 Bcf yesterday. That’s a record high. Folks, this is going to add up. If we take 2 Bcf/d as an average, that’s 730 Bcf annually. That’s material! It looks like equity, oil and natty traders have taken St. Paddy’s Day off. Natty is up 2.2¢.

Elsewhere

It’s time! I’m talking March Madness!!! The awesome NCAA Men’s Basketball Tournament got underway this week. This 68 team basketball bonanza has been known to crown a Cinderella or two, produce at least one shining moment a year and turn millions of Americans into illegal gamblers. Here’s some stats>

• 14 cities will host the 2017 tournament.

• 125,000 fans are expected to visit Phoenix for the Final Four.

• $100-$150 economic million impact on Phoenix.

• $4 billion in corporate losses due to loss in worker productivity.

• Duke’s coach Mike Krzyzewski is college basketball’s highest coach earning $7.3 million annually. Six times the university’s president.

• UCLA holds the record of most national championships at 11.

• $9.2 billion was wagered on the 2016 tournament. $8.9 billion estimated to be wagered illegally.

• 70 million tournament brackets were completed in 2016. Compare that to 129 million ballets cast in last year’s presidential election.

• It’s 2 times easier to win back-to-back Mega Million lotteries buying one ticket both times than to fill out a perfect bracket.

• $1.5 million was the average 30 second ad cost during the 2015 title game.

• 17.5 million barrels of American beer are produced in March compared to an average of 14 million in other months.