Good morning. Yesterday was bifurcated. If you were AT&T or ExxonMobil or other members of the Dow you did ok with the Dow (which is 30 stocks) closing up 44 points at 17,031. If you owned the S&P 500 index you yawned with it closing down 1 at 1,984. But if you owned the Nasdaq index you had a really bad day with it falling 49 points, 1.07%, to 4,519. So how bad was it? Just the worst day since July 31st. I’m not sure if it was nervousness and some money wanted to exit high flying stocks like Tesla (down 9.08%) or Twitter or Yelp or FireEye or LinkedIn which were all down 6.5% or maybe it was investors were wanting to get cash to put into Alibaba which is going public this Friday and is expected to be the largest IPO in history raising than $20 billion (Youza!). For those of you not familiar with Alibaba it is a privately owned (at least until Friday) e-commerce company based in Hangzhou China. And boy is it a big one. In 2012 it handled more money than its competitors eBay and Amazon combined.

Today the Fed begins its two day meeting with a press conference scheduled for tomorrow. It’s a slam dunk the Fed will announce that its bond buying program (big part of QE) will end next month. As mentioned yesterday, the big question is whether it will back off the “considerable time” language it’s used for months on how long it will keep overnight interest rates near zero. It’s widely expected the Fed will raise interest rates in 2015, the only question is, and it’s a very important one to investors, is when.

There were a couple of important economic reports released yesterday. The Fed reported that industrial production in the U.S. fell 0.1% in August which was far worse than economists were forecasting which was for a 0.3% increase. Mitigating that somewhat was the New York Fed’s manufacturing report for the region with its index rising from 15 last month to a stunning 28. The consensus was for a 16 so the miss was considerable and positive. That being said, the former report was for the nation and the latter for a region so the mitigation effect is limited.

While you slept the Asian markets all ended lower with China’s Shanghai Composite Index getting destroyed closing down 1.82%. Weighing on the index were two reports released yesterday. One stated foreign direct investment in China fell in August to its lowers level in more than four years and another that industrial production is slowing to the lowest rate since 2008. Both are in the latest sign the world’s second largest economy is losing steam. All the European indexes are bleeding red this morning and although not as bad as the Shanghai, they are down more than chatter. Our market is hanging in there pretty well considering what is happening elsewhere with the Dow down 7 points.

WTI and Brent are trading divergently with the former finally getting a bid yesterday closing up 65¢ at $92.92 while the latter continues to grind lower falling 46¢ to $95.65. For those of you like me who follow that spread it is now “into” $3.73. The last time we were that tight was on April 11th. The October Brent contract expired weak yesterday which closed the spread. That being said, the Brent/WTI November spread is $5.89. Really putting pressure on oil prices, particularly Brent, are repeated reports of demand waning in China. Brent is down 17% from its 2014 high in mid-June.

This morning WTI is giving back a big portion of what it gained yesterday being down 58¢ being dragged down on lower equities.

Natural gas popped 7.4¢ yesterday closing at $3.931. Traders right now are taking direction from the cash market which was strong in the Midwest yesterday with the cold front moving through with markets a little short from over the weekend and also having to buy for today. As you can see from the forecast below, the cool air remains in the east for the next two weeks. For right now the cool air doesn’t translate into much of an increase in demand but the end of the 11-15 day time frame puts us to September 30th with the forecast tomorrow putting us into October when cooler than normal will indeed translate into an increase in HDD’s and incremental load. Man does the jet stream pattern producing the forecast below (ridge in west, trough in east) look familiar. This is what we experienced all winter last year. This morning the cash market is a little weaker with natty being down 5.5¢ as I write.

Things in Ohio sure are popping. At least with respect to energy production. As a matter of background, the Utica formation lies below the Marcellus formation and encompasses a larger area than the Marcellus, mainly to the northwest, west and southwest of the Marcellus. This puts the Utica into eastern Ohio while almost none of the Marcellus lies in Ohio. Well, Ohioans are beginning to do a great job with this new resource. In Q2 2014 natural gas production increased an incredible 32% to 88.7 bcf from 67.3 Bcf compared to Q1. Putting it in other words, Ohio reported more natural gas production in Q2 than in all of 2012! And oil production is radically increasing too. In Q2 2014 2.5 million barrels were produced from the Utica compared to Q1 which is a 32% increase. And let us not forget all the good paying jobs this is creating for Buckeyes. As one of our antipode friends would say, “Good on ya mates!”