Good morning. Investing in equities is all about growth and economic reports, or a lack thereof, and are killing stocks taking a toll on investors. And not just here in the U.S. but globally. On Friday an index of global equities hit a 7 month low and oil slumped to a 4 month low (more on that below). On Friday stocks closed lower although the Dow and S&P 500 didn’t fair too badly with the former off 10 to 16,650 and the latter down 6 to 1,922. However, the tech-heavy Nasdaq got whacked hard dropping a very material 58 points, 1.32%, to 4,321. Asset values, I mean equities, are tied to expectations of growth and a recent raft of weak indicators from Europe and China at a time when other big economies, including Japan and Brazil which are also struggling, is making the bull’s yoke very heavy. And let’s not forget about Germany with its dismal data of late as well as a lack of QE action by the ECB fueling anxiety that the euro zone may slip back into recession. Then you also have the Fed set to wind down its asset purchasing program which is credited with boosting markets over the past 2 years ending this month. Turn the Bat-Signal on!

This morning Dow futures are up 60 points but I strongly recommend not putting too much credence in today’s market action for although our markets are open for Columbus Day the banks are closed. Additionally, the markets are closed in Canada for Thanksgiving and in Japan for, get this, Sports Day.

As I mentioned above, oil hit a 4 month low intraday on Friday although it did manage to eke out a gain by the day’s end with WTI closing up a nickel at $85.82 and Brent up 16¢ settling $90.21. Let’s move on to this morning because there were events over the weekend affecting oil prices, and they were not good for the bulls. Over this past week and weekend in private meetings, some of which took place in New York, Saudi Arabia told the oil market that Riyadh is comfortable with markedly lower oil prices for an extended period of time. This is a major shift in policy from its long standing de facto strategy of holding prices at around $100 (Brent). Many analysts believe their action is directly aimed at shale oil producers here in the U.S. Yesterday Ali al-Omair, oil minister of Saudi Arabia’s core Gulf ally Kuwait, appeared to be the first to articulate the emerging view of OPEC’s most influential member saying output cuts would do little to prop up prices in the face of rising oil production from Russia and the U.S. saying through the state news agency “I don’t think today there is a chance that [OPEC] countries would reduce production.” More bluntly, when asked about coming Saudi output curbs, one Saudi official responded “What cuts?”

OK, so where are prices heading? My oil and gas clients are not going to like this but the aforementioned Mr. al-Omair believes prices will stop falling at $76 to $77 per barrel citing production costs of shale oil in the U.S. We’re on our way there this morning with WTI being down $1.02.

Natural gas was uneventful Friday with natty trading in only a 5.5¢ range closing up 1.4¢ at $3.859. Although currently below the black hole like price of $3.90, we’re only a nickel under that price which looking at the forest and not the trees, is immaterial. To the chagrin of my friends 900 miles north of me, winter is just around the corner and natty prices will be moving with every new forecast change. Speaking of the forecast, after some materially above normal temperatures the next few days, things are turning noticeably cooler in the 6-15 day time frame with below normal temps coming to the upper Midwest and southeast with the former having more of an impact in natty demand and prices than the latter. You can mentally overlay the jet stream on the map below, which results in the temperature forecasts, with an amplified ridge over the western U.S. and a big trough in the east. This is the same pattern we saw for most of last winter.

We’re getting closer to energy independence. Per our EIA, the total U.S. net imports of energy as a share of energy consumption fell to their lowest level in 29 years for the first 6 months of 2014. Total energy consumption in the first 6 months of 2014 was 3% above consumption during the first 6 months of 2013 but consumption growth was outpaced by increasing in total production. These changes led to a 17% reduction in net imports compared to the first 6 months of 2013. So we have growing consumption due to a growing economy accompanied by a reduction in energy imports. As Martha Stewart says, “This is a good thing.” Have a good day.