Good morning. Stocks closed lower on Friday with the Dow falling 61 and below 17,000 to 16,982, the S7P 500 off 12 to 1,986 and the Nasdaq closing at 4,568, down 24. This is the first week the major indexes have closed down (S&P down 1.2%) after 5 weeks of gains. Let’s not forget though we’re really not that far off the recent highs with the S&P hitting a record high of 2,007 on September 5th. All in all, I’d summarize last week as choppy, lackluster. Tomorrow and Wednesday the Fed meets and all the market cares about is two words: “considerable time.” These are the words used by the Fed previously when describing how long they will keep interest rates at near zero after their bond buying program ends next month. It doesn’t seem that long ago but the Fed has kept overnight interest rates near zero for almost 6 years. Technically, since December 2008. Most economists expect the Fed to raise interest rates in 2015. The question is when? March, June, July, September? Economists lately have shifted their expectations forward and generally expect it to come in Q2. Futures traders (yes, there’s a market for this!) are now pricing in June 2015 price hike, up from July.

Regarding economic data, retail sales were released on Friday and were a good deal stronger than had been expected being up 0.6% month-on-month in August with forecasts projecting a 0.3% increase.

Overnight the Asian markets closed mixed. Good economic news came out of China with retail sales up 11.9% year on year and while industrial production increased 6.9% it was well below the consensus of 8.8% and last month’s 9.0% increase and was the slowest growth in 6 years. In Europe, two of the major indexes are down and one is up but it’s really just chatter because they’re waffling on either side of unchanged. Russia is already feeling the effects of the sanctions. Today the ruble hit an all-time low against the dollar and is down 15% this year. Add that to Brent being down over $18 in three months and the squeeze is on. Mr. Putin says the Russian economy is strong enough to withstand the sanctions. We’ll see. Sanctions are death by a thousand cuts.

The week is starting out mixed here in the U.S. with the Dow down 2 which is chatter but the Nasdaq is taking it on the chin trading down 0.90% with biotechnology shares getting pounded down 1.72%.

Oil slipped again with WTI falling 56¢ to $92.57 and Brent lost 97¢ settling at $97.11. Oil globally is under pressure from ample supply but raising sanctions against Russia puts more downward pressure on global demand which forecasters have put at flat to down for next year. WTI prices are right down on a long term support line dating way back to the start of 2010. If you’re a technical trader, you buy here and sell it out on a break of support. This morning WTI is up 15¢ after being down 72¢ when I came into the office.

Natural gas closed 3.4¢ higher on Friday at $3.857 with shorts covering ahead of the weekend. Mostly chatter all day. This morning is quite different though with natty up 8.1¢ on the heels of a strong cash market. It looks like utilities come in short from the weekend with the mild cold snap and need to “double buy” today, both to make up from over the weekend and tomorrow’s needs (the norm is to buy today for tomorrow). We may really start to see some support in this market. More and more forecasters are coming in with forecasts for a colder than normal winter for the upper Midwest (forecasts for the northeast are for a normal winter). Have a good day.