Good morning. Friday was a horrible day for U.S. stocks. The Dow lost 316 points, 1.79%, the S&P 500 dropped, 33, 1.62%, and the Nasdaq ended off 55 points, 1.16%, at 4,654. It wasn’t just Friday that stunk. The whole week did with the S&P down 3.5%, its worst weekly performance since May 2012. The Dow’s performance was even worse racking up a loss of 3.8%, its biggest loss since 2011 which resulted from an unusually severe winter which stamped U.S. growth. Oil’s price decline is really putting the spot light on investors’ concerns about global growth. Highlighting this weakness was the Paris based IEA’s report on Friday cutting its estimate for global oil growth. Investors fret the 46% plunge in oil prices since June is signaling the global economy is slowing more quickly than current data suggests. Further evidence of this was another report out of China on Friday noting lower than expected industrial production figures.

There was some positive economic news here in the States which got overshadowed by equities horrific performance and that was the Reuters/University of Michigan Consumer Confidence report which rose quit sharply in November with the index rising to 93.8 from October’s 88.8. This is an 8 year high and was well above estimates with consumers referencing stronger employment, lower gasoline and energy prices and a higher stock market. Further, drilling down into the report the “future conditions” and “current conditions” data were quite strong. All in all, the report was quite impressive.

This morning Asian stocks closed mixed with Japan’s Nikkei hitting a 4 week low and Hong Kong’s Hang Seng ending down 0.95% being pulled down by a Peoples Bank of China report today predicting economic growth in the country could decrease to 7.1% next year on slowing property investment. The European markets are waffling on either side of unchanged. U.S. equities are unchanged from Friday’s close and this is very disappointing for Dow futures were up triple digits when I came in this morning.

Oil continued to get crushed last week with WTI closing down $2.14 on Friday at $57.81. Brent lost $1.83 at $61.85. These were new 5 year lows. For the week WTI lost 13% and Brent lost 11%. As mentioned above, traders continued to pile on short positions when the IEA on Friday slashed its outlook for global demand growth for 2015 by 230,000 bpd to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil exporting countries. That’s the demand side of the equation. On the supply side OPEC reiterated yesterday in Dubai it will not cut production.

OPEC may not be cutting production but it will be cut here in the States. On Friday Baker Hughes reported in its weekly rig count report that rigs targeting oil dropped by 29 last week to 1,546, the lowest level since June and the biggest weekly decline since December 2012. It will take about 6 months for production to be affected because there’s always a lag between rig count changes and a change in production. In fact, it’s projected that oil production in both the Eagle Ford here in Texas and the Bakken in North Dakota will hit record levels next month. This morning WTI continues to bleed with it being down 85¢.

Courtesy of MDA Information Systems LLC

Natural gas put on its rally cap Friday closing 16.1¢ higher at $3.795. The weather forecast in the 11-15 day time frame shifted from above normal temperatures to more normal brining in the buyers. Last week we got close to the $3.54 low we saw in late October which brought pause to selling with some profit taking coming in. This morning the forecast is much like Friday’s noon forecast showing mostly normal temperatures for the end for the last week of December with natty up a penny. Chatter.

There’s a grim joke in Moscow these days and it circles around the number “63.” That is where Russian’s think the Brent oil price was heading, where the ruble exchange rate is heading and Putin’s age next year. Regarding Brent, we’re already there with it settling at $61.85 on Friday. The Russian ruble is trading at 59 currently and is poised to trade 60 even as soon as today. This is the lowest level ever. Some $128 billion is projected to have fled the country this year more than double last year and well over 6% of the entire Russian economy. Inflation, particularly for food, is rising and a recession is projected for next year. Economists estimate Russian banks and major state-owned companies owe western banks hundreds of billions of dollars but due to the sanctions these loans cannot be refinanced in the U.S. or Europe. Chinese banks can’t handle the volume so borrowers are facing defaults or hoping for handouts from Russia’s rainy day funds. While all heck is breaking loose economically, Putin is trying to deflect blame and attention. On Friday the top story on a major state-owned channel newscast was not of the ruble’s sudden drop but about French soccer fans getting beaten up in Kiev. Putin has tried to blame western sanctions for the demise but structural problems and mismanagement are as much to blame. There’s now a joke making the rounds in Russia: one friend asks another the proverbial question, “if you had a chance to change one thing in your past what would it be?” The friend answers “I would’ve changed rubles to dollars!” Have a nice day.