Equities and the Economy:

• Employment report for March shows smallest gain in new jobs in a year.
• Stocks shrug off report posting marginal losses.

Always a big report, the Labor Department released its Employment Situation Report for March on Friday with the headline being that U.S. employers added just 98,000 new jobs, the fewest since last May, which was way below economists’ forecasts of 185,000. However, the unemployment rate plunged to 4.5%, the lowest since before the recession, May 2007, and wages rose 0.2% in March and 2.7% y-o-y. Investors shrugged off the disappointing jobs creation number attributing it to the severe March weather on the East Coast hitting the construction market. Believe it not, there’s may also be something going on here, an increasingly tight labor market, which is why wage growth is up the solid 2.7%. You regular readers know that every Friday I discuss first time unemployment claims and claims are at decade low levels.

So on Friday investors took the low number of job gains as a “one off” and stocks ended little changed. The Dow finished down 7 points at 20,656 and off less than 0.1% for the week. The S&P 500 fell 2 points on Friday and shed 0.3% for the week and the Nasdaq lost a single point on Friday closing at 5,878 and down 0.6% for the week.

This morning is beginning quietly with the Dow up 5 points. The next big event is earnings season which begins this week. Investors are looking for double digit percentage earnings gains, which is baked into current stock prices so we better get that or it ain’t gonna be fun.

Oil

• Oil prices at one-month high.
• Rig count continues to climb.

Oil future prices ended at a one-month high on Friday supported by the U.S. airstrike on Syria. Now Syria doesn’t produce much oil, 50,000 bpd, but its proximity to pipelines and transport routes in conjunction with the simple fact it’s in the Middle East where 40% of the world’s crude oil is produced and increases geopolitical risk which increases the risk price premium. On Friday WTI closed up 54¢ at $52.24 and gained 3.2% for the week. Brent climbed 35¢ settling at $55.24 also rising 3.2% for the week.

Baker Hughes released its weekly rig count report noting drillers added 15 more rigs last week, 10 oil and 5 natural gas. Texas and Oklahoma were the big gainers with 7 and 4, respectively. The current oil rig count is now 672, up 111% from its nadir last May. The natural gas rig count is up 94% from that same month. All the gains in the rig counts over the last year have been on-shore. Currently there’s 22 rigs working off-shore. Last year at this time there were 25. Current oil prices are too low to make the economics of off-shore drilling work.

The bulls remain in control. This morning WTI is up 60¢ on reports out of Libya that once again the Sharara field is closed.

We’re feeling the higher oil prices at the pump. On Friday reformulated-gasoline blendstock, the Nymex gasoline contract, traded at its highest level since August 2015.

Courtesy of MDA Information Systems LLC

Natural Gas

• Profit taking on Friday.
• Prices up 2.2% for the week.

Natural gas prices had a strong week and traders took some chips off the table and profits on Friday resulting in the May Nymex contract closing down 7.1¢ at $3.261. Even with the loss on Friday natty was up 2.2% for the week. The 2019 through 2022 calendar strips closed virtually unchanged to Thursday.

Although we’re in the “shoulder season” when there’s little weather related load, there are tremendous amounts of nuclear MW’s off line for refueling (44% more this year than last) and this will be replaced with natural gas fueled generation which will support natural gas prices.

This morning it’s quiet. Natty is down 0.18¢. Chatter.

Elsewhere

One of the great golf tournaments ended yesterday and congratulations to Sergio Garcia on his first major tournament victory, in 74 attempts! Here are 14 Masters fun facts you can drop at the bar.

1) That’s not sand in those bunkers! It’s actually a waste product from the mining of aluminum which is a really bright quartz.

2) During WWII labor was tight and the maintenance crew workers left for the war. The replacements? Occasionally the club set a couple hundred head of cattle loose to help cut the grass.

3) How did the second shot on hole number 11, all of 12 and the first two shots of 13 get the name “Amen Corner?” It got the name from author Herbert Wind as a way of giving this section of the course a transcendent nickname. The name was inspired by the 1930’s jazz record “Shouting in that Amen Corner.”

4) The Masters was the first tournament to use the grandiose on-course scoreboard.

5) Cell phones aren’t allowed at Augusta. While Tiger Woods and other top pros get a pass, you and I won’t. Augusta is one of the last few places in the world where payphones still exist.

6) The food is really cheap. $1.50 for an egg salad sandwich. $2.50 for the Club sandwich.

7) Tickets are really pretty inexpensive. A four day past only costs $250. But you better be lucky. They’re only available by lottery. In the secondary market they’ll cost you thousands.

8) Where’d those green jackets come from? Those snazzy green jackets were first worn by members in 1939 as a way to help visitors identify them in case they needed help or had questions. The tradition of awarding the jackets to tournament winners came 10 years later with Sam Snead being the first champion to ever be given the most recognizable jacket the world has ever known.

9) There have been 83 Masters Tournaments. Only 17 golfers in the world have won more than once. There’s only been 3 to win back-to-back: Jack Nicklaus, Nick Faldo and Tiger Woods.

10) Jack Nicklaus is the oldest winner at 46 years old. He also has the most green jackets, 6. Two more than the next closest: Tiger Woods and Arnold Palmer.

11) Tiger Woods is the youngest winner at 21 years old. He also has the largest margin of victory, 12 stokes in 1997.

12) Europeans struggle at the Masters. They’ve only won 8.

13) All the caddies wear white coveralls. There was a time when players couldn’t bring their own caddies to the Masters and instead had to hire one from the club. Since most caddies were poor locals from the town of Augusta with little money to buy nice clothing, the white coveralls were designated as a mandatory uniform to uphold appearance standards.

14) Augusta was a U.S. Open reject. Before launching the inaugural Masters Tournament in 1934, Augusta National had hoped to become a host venue of the U.S. Open. The request was denied so Augusta started its own tournament. The rest is history.