Equities and the Economy:

• Bivouacking continues.
• Nasdaq sets intraday record high.

Without any significant economic news U.S. equities have been consolidating the last few sessions. Yesterday the Nasdaq managed to post a new intraday high but pulled back in the afternoon and closed up a point from Friday at 5,902. The Dow and S&P 500 slip very marginally with the former ending down 9 points at 20,906 and the latter off 5 to 2,373. It really was one of the quietest days I’ve seen for there wasn’t even any economic reports of significance released. We can expect this to continue until the next material macro catalyst appears.

Being that the S&P is up 6.0% this year which extrapolates to about 28% for 2017, many investors are waiting for that big 5% drop in stock as a buying opportunity. The problem is, those kinds of selloffs have proven elusive as stocks have continued to march higher. The S&P has risen for 182 days without a 5% pullback, the longest streak since February 11, 2004. The last time we saw a drop of 5% was over a 13 day period in June 2016. Forget 5%. It’s been a long time since we’ve even seen a 1% drop. Both the Dow and S&P have gone 108 sessions without a 1% or more decline. If you were on the sidelines this whole time you would have missed a lot. Over the aforementioned 182 days the S&P is up a huge 19%.

This morning is Groundhog Day. Dow up 24.

Oil

• Prices remain under pressure.
• New trading range established.

Oil prices remained under pressure yesterday with WTI off 56¢ closing at $48.22 and Brent falling 14¢ settling at $51.62. After dropping about $7.00, 12%, over the past couple of weeks to three months lows it appears prices have stabilized at current levels. The new trading range is $47 – $50 for WTI and $50-$53 for Brent. The recent losses were the result of rising evidence that OPEC’s supply limiting deal is not all that supply limiting. Some estimates put the effective oil reduction at a paltry 375,000 bpd, 0.3% of global demand. It’s still a long way off but as we get closer to May 25th, OPEC’s next meeting, more and more focus is going to be on whether OPEC, i.e., Saudi Arabia, extends it’s production cut. If they don’t, look out below!

Today the April WTI contract expires and it’s getting a little bounce, up 21¢, on a weaker U.S. dollar which is at a 6 week low.

Courtesy of MDA Information Systems LLC

Natural Gas

• Lingering cold pushing prices higher.
• Spring coming to the Midwest and east this weekend.

The lingering cold is pushing the cash market higher which is driving futures prices up. The April contract closed up a hefty 9.3¢ yesterday at $3.041. The 2018 and 2019 calendar strips, which are most important to me, also posted gains. The late winter cold has produced strong seasonal demand and a lot of gas has been pulled out of storage. Thursday’s EIA storage report is going to show a huge withdraw. For those of you in the Midwest and east ready for spring, hang in there. This weekend Cincinnati will have highs in the upper 60’s and Philadelphia is forecasted to hit 70 on Saturday.

The bulls remain firmly in control this morning with natty up 6.4¢ hitting 5 week highs.

Elsewhere

There remain two pervasive mysteries surrounding Super Bowl LI. First, how could the Falcons blow a 19 point lead going into the fourth quarter, and second, who stole Tom Brady’s jersey??? The first will be debated over many a libation. The second is solved. Fox Sports reported the NFL and FBI (yes FBI!) have recovered the jersey which was stolen from Brady’s locker in the chaotic moments following the Patriot’s victory. Houston law enforcement treated the theft as a felony giving the jersey a potential value of a half-million dollars. The FBI got involved because the jersey crossed the national border. Interestingly, the jersey Brady wore in Super Bowl XLIV against the Seattle Seahawks in 2015 was also recovered. The culprit? Per the NFL, the items were found in the possession of a credentialed member of the international media. The Houston police indicated the media member was from Mexico. Nothing with Brady is every easy or simple, is it?