Good morning. Oh so, so close. I’m talking about what I’ve been predicting over the past few months and that is the Dow hitting 17,000. Yesterday we got within a whisker of it with the intraday high just 2 points shy of that level trading 16,998. Unfortunately, the market pulled back from that high with the Dow ending the day up 129 points at 16,956, the S&P 500 gaining 13 to 1,973 and the Nasdaq screaming higher up 50, 1.14%, to 4,458. By the way, the S&P posted another record high yesterday! Not too bad for the first trading day of the quarter! Good news came from financial data firm Markit saying its final U.S. Manufacturing Purchasing Managers Index rose to 57.3 in June, the highest since May 2010. Also giving investors confidence the global economy is improving were the June China Purchasing Managers Index which rose to 50.7 from May’s 49.4 edging past the all-important “50” number for the first time since December. Also, Japan, the world’s 3rd largest economy, gained pace in June fueled by improving demand at home.

We have a couple of extremely important reports today and tomorrow and both are employment related. First, ADP, the largest payroll processing company in the U.S., just released its private sector payrolls number for June stating private employers added a whopping 281,000 jobs last month. This is far above the consensus of 210,000. The number of construction jobs added was particularly encouraging representing the highest total in that industry since February 2006. ADP’s data is very, very closely followed for it is, to use a movie term, the “trailer” for the U.S. Labor Department’s employment report which will be released tomorrow (a day earlier than usual due to the holiday Friday). Although the ADP data can vary materially from the Labor Department’s non-farm payroll data on a month-to-month basis over time the correlation between the two is high. Investors appear to be quietly positive about ADP’s data for Dow futures are up only 14 points.

I wasn’t sure which energy commodity to put in second place this morning for neither did anything yesterday. WTI fell 3¢ to $105.34 and Brent fell 7¢ closing at $112.29. Of note, the term structures continue to weaken with the backwardation of August ‘14/August ’15 continuing to narrow. Weakening backwardation is usually a sign of weakness in the general market for if demand were strong the backwardation would be widening. This morning WTI is down 50¢.

There must be a lot of natural gas traders who are soccer fans [the U.S. lost to Belgium 2-1 yesterday and was eliminated L] for natty was dead yesterday ending the day almost flat to Monday, down 0.6¢ at $4.453. That being said, calendar 2015, ’16 and ’17 were up 1.6¢. As you all well know, I watch not just the front month but all the terms and I’ve been seeing over the past 6 months the curve getting flatter with the balance of 2014 getting cheaper but prices in 2015 and beyond rising. Weather forecasts indicate a very mild July 4th weekend for the Midwest and east with some above normal temperatures hitting the east coast next week. Traders are hitting natty this morning being down 6.7¢.

As of April 2014, the U.S. produced 8.4 million bpd of crude oil. Now here’s the impressive part. Texas and North Dakota accounted for nearly half of this total. Texas production topped 3.0 million bpd for the first time since late the late 1970’s, more than doubling production in the last 3 years. North Dakota production broke 1.0 million bpd for the first time in history nearly tripling its production over the same time period. Ten years ago North Dakota’s production wasn’t even “on the map.” From April 2010 to April 2014, North Dakota and Texas’ combined share of total U.S. production rose from 26% to whopping 48%. By comparison, the Gulf of Mexico’s crude oil production share dropped from 27% to 17%. Have a good day.