Equities and the Economy:

• Earnings and government speak drive the major indexes higher.
• Nasdaq sets record high.

Strong earnings from American Express comments by Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross drove stocks higher yesterday with the Dow popping a hefty 174 points, 0.9%, to 20,579, the S&P 500 rose 18 points finishing at 2,356 and the Nasdaq closed up 54 points, also 0.9%, at 5,927 and at a new record high! Numerous companies announced earnings but it was American Express’ earnings that got investors’ attention coming in better than forecasts and the company was rewarded with its stock price rising a huge 5.9% yesterday. American Express is one of the 30 Dow companies. Also boosting U.S. stocks were comments from government officials. First, Treasury Secretary Mnuchin stated that President Trump’s tax overhaul plans weren’t linked to the outcome of the healthcare bill and that a tax bill will be unveiled in the near future. This is part of the “Trump trade” which had rallied stocks after the election but has waned of late. The other Fed speak that boosted stocks, specifically steel stocks, were comments by Commerce Secretary Wilbur Ross stating he’s begun an investigation into whether China is dumping steel here in the U.S.

Fundamentally, the Labor Department reported its regular weekly initial unemployment claims and while they rose 10,000 week-on-week the report also noted the number of out of work people collecting unemployment checks fell to a 17 year low last week. As Martha Stewart would say, “This is a good thing.” For the record, the S&P 500 is up 5.3% for the year. We’ve been at that level for a couple of months now, but it’s the makings of a good year.

The morning after the big rally is beginning boring with the Dow up a meaningless 12 points. You may not be, but global investors are paying close attention to France this weekend for its round one of presidential elections there. It’s a very tight race.

Oil

• Oil prices end mixed.
• Saudi Arabia stating OPEC likely to extend production cuts.

After experiencing their largest drop on Wednesday since March 8th oil prices ended little changed from Wednesday with WTI falling 17¢ to $50.27 while Brent rose 6¢ to $52.59. Chatter. We won’t know for sure until May 25th, the next OPEC meeting in Vienna, but Saudi Arabia , the kingpin of the cartel, is stating the production cut agreement that expires June 30th is likely to be extended, to the delight of the U.S. producer! The OPEC cuts have supported prices which has led to U.S. production rising to a 1.5 year high at almost 9.3 million bpd. Also, it’s debatable how effective the production cut agreement has been. OECD global oil and fuel inventory levels are currently at near a record 3 billion barrels.

This afternoon Baker Hughes releases it rig count report. This morning it’s quiet. WTI is down 20¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• EIA storage report marginally bearish.
• May natural gas a little lower.

The EIA released its always closely watched weekly storage report stating 54 Bcf was injected into storage last week which was about 3 Bcf greater than traders forecasted. This put mild pressure on the May Nymex contract which ended down 2.6¢ at $3.159. That being said, traders are buying the back end of the curve. The calendar 2018 strip is up 21¢ since the end of February and up 8¢ this month.

Returning to storage, current storage levels are 368 Bcf, 15%, below last year at this time and 282 Bcf, 15%, above the five year average.

This morning natty is moribund up 0.9¢.

Elsewhere

Here’s a good feel story to start your weekend. Three cheers for Ovidiu Rosu. The good Samaritan risked his own safety running out into a very busy highway to rescue a puppy marooned in the middle of a very busy highway. Somehow the dog had crossed half the lanes to get to the middle of the highway which was only separated by a guardrail. Now this wasn’t as easy as you might think. He needed to approach the pup without scaring it into the traffic. He named the stray Berta and found her a lovely home https://www.yahoo.com/news/good-samaritan-rescues-stray-dog-175500344.html Have a great weekend.