Equities and the Economy:

• Equities end slightly lower.
• Globally, investors slightly more cautious.

U.S. stocks ended marginally lower yesterday with the Dow closing down 22 points at 21,184, the S&P 500 ended off 3 points to 2,436 and the Nasdaq fell 10 to 6,296. Not really a big deal being we had multiple days of record highs last week. The market was dragged down by the behemoth Apple after brokerage firm Pacific Crest downgraded it to “sector weight” from “overweight.” Now before you panic remember Apple has been ripping higher this year being up a whopping, huge 32% y-t-d. This is super amazing considering the market cap of the company is $802 billion, that’s with a “b”! How you get the largest company in America’s stock up 32% in a year is beyond me. So it looks like the brokerage company is saying “It’s been a good run. Time to pare the weighting back a tad.”

Regarding the economic news, the Commerce Department reported factory orders fell 0.2% in April which not only was below Wall Street expectations, but it was the first decline in 5 months. However, offsetting the bearish headline was that orders for non-defense goods, which excludes aircraft and is seen by many as a proxy for business investment plans, rose 0.1%. Let’s call the report a “wash.”

This morning I’m see investors shifting to a slightly more cautionary mood. The UK elections are Thursday and although the Tories are expected to win, which would keep Teresa May as Prime Minister, their lead has narrowed to 1%, and with the previous surprise Brexit vote and Trump victory investors have in the back of their minds anything is possible. Locally, fired FBI Director James Comey testifies tomorrow. Both events are resulting in investors taking some risk off the table. The safe haven assets gold and 10 year German government bond are at 6 week highs. The Dow is down 31 points.

Oil

• Oil prices slip to one month lows.
• Tensions increase between Middle East nations.

Oil prices slipped yesterday with WTI closing down 26¢ at $47.40 and Brent fell 48¢ to $49.47. Both marked lows in just under a month. The big news yesterday was that Saudi Arabia, Egypt, Bahrain and the United Arab Emirates severed diplomatic ties with Qatar accusing the country of supporting Islamist militants and Iran. Qatar denies the accusations. The likelihood of military action is very low which means oil production wont’ change, but the rift could jeopardize the OPEC production cut agreement. If Qatar counters by saying “Screw you and your production cut agreement” it’ll open the floodgates for other nations to open the valve. So far that hasn’t happened.

This morning WTI is down 16¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices hit 2 ½ month low.
• U.S. production hits y-t-d high.

The July Nymex contract slipped 1.7¢ yesterday closing at $2.982. Yesterday’s low intraday trade of $2.935 was a 2.5 month low. The bears are jumping on the fact U.S. production, which for about 4 ½ months held steady at ~70.4 Bcf/d, has been increasing over the last couple weeks and hit a y-t-d high yesterday of 71.99 Bcf/d. Production has backed off that a tad but what the bears, and I, have been keeping a close eye on and will continue to do so, is the production figures.

This morning the bulls are wrestling control of the market with natty up 4.5¢. This is due to a warmer forecast that came out this morning showing the upper Midwest and Northeast to have much above normal temperatures in the 6-10 time frame, much to the delight of the folks in those regions who’ve had a very cold spring. This will be the first warm weather those regions will have this year.

Elsewhere

Today marks the 73rd anniversary of D-Day, June 6th 1944. Here are some facts about D-Day.

• D-Day was the largest seaborne invasion in history, with over 156,000 men landing in Normandy.
• D-Day was originally set for June 5th but was delayed due to bad weather.
• D-Day is a generic term which means a date. The term D-Day was used in WWI.
• When the D-Day forces landed Hitler was asleep. None of his generals dared send re-enforcements without his permission, and no one dared wake him.
• On day 1 German casualties were around 1,000 men while Allied casualties were at least 10,000.
• 4% of the sand on Normandy beaches are still made up of metal particles from the D-Day landing.
• In 1944, by a huge coincidence, a crossword puzzle was printed with answers all containing D-Day operation “code names,” which sent MI-5 into a panic thinking their invasion plans had been discovered.
• J.D. Salinger arrived in Normandy on D-Day carrying with him a work in progress: “Catcher in the Rye.”
• James Doohan, the actor who played “Scotty” in Star Trek, was shot 6 times on D-Day: 4 times in the leg, one in his chest and one through his finger.
• On the night of the D-Day invasion, only 15% of paratroopers landed in the right place.
• The Allies parachuted dummies over Normandy on D-Day to distract Nazi gunners from the real paratroopers.