Equities and the Economy:

• U.S. stocks close higher on upwardly revised Q4 2016 GDP.
• Nasdaq logs 21st record high.

The Commerce Department reported revised Q4 2016 GDP data yesterday noting GPD for the quarter rose 2.1%, up from the previously reported 1.9%. The rise was due to increased consumer spending which rose 3.5% for the quarter. Wall Street always likes when consumer spending grows and the data brought in buyers. The Dow posted a gain of 69 points closing at 20,728 and the S&P 500 added 7 to 2,368. Yesterday’s S&P gain moved the benchmark index into positive territory for the month,+0.2%. The Dow is down 0.4% for the month. The Nasdaq gets all the headlines though for by closing 17 points higher it logged a new record high for 2017, its 21st this year! Bam!

Other data released yesterday included weekly initial jobless claims which the Labor Department said fell 3,000 last week to 258,000. Initial claims remain at the lowest level in decades.

Overnight the Asian markets got hammered and in Europe equities are trading mixed which is what we’re seeing this morning in the U.S. with the Dow chattering around down 20 points. Today things could get squirrely. It’s the last day of the month and the end of quarter which means money and fund managers have to report their performance and positions and some will do “window dressing” today to play to investors.

Oil

• Oil prices close at 3 week high.
• Rise for 3rd consecutive session.

WTI logged an 84¢ gain yesterday closing at $50.35 and Brent rose 54¢ settling at $52.96 both posting 3 week highs and rising for 3 consecutive sessions. Larger than expected drawdowns in U.S. stockpiles and gains in refinery activity along with unrest in Libya which has closed a major pipeline and shut in a couple of oil fields in the western part of the country have supported prices this week. Also bringing in buying are commitments from Kuwait, Iran, Venezuela, Angola and Algeria to extend the 1.8 million bpd production cut agreement past June 30th. OPEC meets May 25th to formally discuss the extension. Tempering the bulls though is that U.S. production continues to grow with the DOE reporting on Wednesday it’s risen for 5 consecutive weeks.

This morning WTI is down 12¢. Chatter.

Courtesy of MDA Information Systems LLC

Natural Gas

The May Nymex contract spent its first day as the prompt, or front, month posting a 4.0¢ loss settling at $3.191. I call this “convergence” for the April Nymex contract expired the day before at $3.175 and the spread between the two months was a little too wide. Yesterday the EIA released its weekly storage report stating 43 Bcf was withdrawn from storage last week. Lingering cold from the arctic weather the week before kept HDD’s high resulting in last week’s withdrawal being way above the 27 Bcf withdrawal average over the last 5 years. Inventories now are 423 Bcf, 17%, below last year and 250 Bcf, 14%, above the 5 year average.

As I mentioned yesterday, with the higher natural gas prices this year coal is capturing market share in the electric generation sector. The EIA reported yesterday that U.S. coal production is 21% higher than this time last year.

This morning natty is up 3.7¢.

Elsewhere

What I’m about to tell you is really scary to think about. Per a recent New York Federal Reserve survey, one-third of Americans would not be able to come up with $2,000 to deal with an emergency. While 32.5% of respondents feel they might need $2,000 to cover an unexpected expense in the next month, almost exactly that same number, 32.8%, admit they could not come up with that sum if faced with an emergency. That percentage has held steady since October 2015. Additionally, the survey stated that one-third of Americans would not be able to handle a $100 medical bill without going into debt. Pinching consumers wallets is that while wages have been virtually stagnant since 2008, costs of big-ticket items such as college, rent and healthcare continue to climb. No wonder Bernie Sanders cry of “free” rings popular with so many people.