Equities and the Economy:

• Stocks snap 7 session win streak.
• Investors disappointed by Senate tax plan.

U.S. stocks have climbed relentlessly higher of late and investors have been looking for an excuse to take profits, and they got one yesterday when the Senate released its tax plan. Whereas the House’s tax proposal immediately cut corporate taxes, the Senate’s plan would delay the cut for a year. On the news investors hit the “sell” button pushing equities lower on the day breaking a 7 session winning streak. The Dow closed down 101 at 23,462 and the S&P 500 lost 10 points to 2,585 logging their biggest one-day percentage drop since October 25th. The Nasdaq fell 39 points to 6,750, its biggest one-day percentage decline since October 23rd.

The University of Michigan’s consumer sentiment index was revised slightly lower for October from 101.7 to 101.1 and lower than forecasts. But don’t fret. That reading at 100 still sits near a 13 year high.

This morning stocks remain on the defensive with the Dow down 15 points weighed down by the Asian and European markets.

Oil

• Prices climb back near two year highs.
• Tensions in Lebanon increasing.

Oil prices closed higher yesterday with WTI adding 36¢ to $57.17 and Brent settling 44¢ higher at $63.93. The fear premium increased yesterday with Saudi Arabia urging its nationals to immediately leave Lebanon raising fears the kingdom may be considering more military action in the region. Reports are that Kuwait, the UAE and Bahrain have also issued travel warning to their respective citizens. As is usual in the Middle East, it comes down to Sunni and Shi’a. Saudi Arabia is Sunni and Lebanon is run by Hezbollah which is Shi’a. At the macro-level in the Middle East it’s always about Sunni Saudi Arabia vs. Shi’a Iran vying for power in the region. It’s difficult to access but it’s generally agreed that 85% – 90% of the world’s Muslims are Sunni.

This morning traders are pausing with WTI up 7¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Weather forecast supportive.
• Storage report neutral.

Natural gas continues to trade on every weather forecast but overall the forecast remains supportive of prices. Yesterday December gas closed up 2.5¢ at $3.200 remaining at 6 month high levels. The EIA released its weekly storage report coming in at expectations showing 15 Bcf was injected into U.S. storage fields last week. Current storage levels are 5.5% below last year and 1.8% below the 5 year average. These deficits will most assuredly rise next week due to this week’s cold weather. In fact, the current cold snap has driven natural gas demand to the greatest level ever recorded for this week in November.

This morning weather forecast has once again moved slightly colder than yesterday’s in the 11-15 day time frame. Looks like Thanksgiving is going to be plenty chilly for the eastern half of the country. Natty is flat to yesterday’s settle down 0.8¢

Elsewhere

Tomorrow is Veterans Day. Here are 5 facts about Veterans Day.

• Veterans Day was originally Armistice Day and was created to specifically honor the Americans who served in WWI. The term came from an armistice between Germany and the Allied Nations on November 11, 1918. It was changed to Veterans Day on June 1, 1954 to include WWII veterans,

• There’s no apostrophe in “veterans,” but does include an “s.” It is not a day that “belongs” to veterans. It is a day for honoring all veterans.

• The word “veteran” comes from the nomenclature of the old English language, meaning old experienced soldier.

• Approximately 90% of Disney employees worked in making propaganda and training films during WWII.

• There are about 20.0 million veterans alive currently. California has more veterans than any other state.