Equities and the Economy:

• Major stock indexes close lower on Thursday for 3rd consecutive session.
• All three indexes post weekly losses.

It was a lousy Thursday with the major equity indexes taking it on the chin in the holiday shortened week. The Dow lost 139 points, 0.7%, finishing at 20,453, the S&P 500 closed down 16 points, also 0.7%, at 2,329 and the Nasdaq ended at 5,805, off 31 points, 0.5%. Discouragingly, all three indexes closed at their low of the day. The only positive thing was that trading volume was significantly below normal. For the week the Dow lost 1.0%, the S&P fell 1.1% and the Nasdaq was off 1.2%. Over the past couple of weeks investors have sought safe haven assets with the U.S. hitting Syria with Tomahawk missiles and dropping the “mother of all bombs” in eastern Afghanistan doing little to encourage traders into a buying mood.

Earnings season got in full swing last week with the much anticipated reporting of the major banks: J.P. Morgan, Citigroup and Wells Fargo. The three are among the earliest companies to report and as such provide investors with the first glimpse into how American corporations are faring. Expectations are high, as well as are current valuations. Well the three banks failed to impress and all ended down on the day. Here’s one for you. The financial sector was the best performing group in the wake of Donald Trump’s November election victory pulling the overall market higher. That sector has fizzled of late and last Wednesday the group turned negative for the year.

Now for some positive news. Last Thursday the University of Michigan showed U.S. consumer sentiment unexpectedly strengthened in April as consumer optimism on current conditions climbed to its highest level since November 2000.

Let’s move on to today because last Thursday’s activity is now ancient history. When I first sat down the Dow was down marginally but things are looking better with the blue chip index up 43 points. We may want to take today’s action with a grain of salt. Many markets are closed today including Germany, France, the UK, Switzerland and Hong Kong.

Oil

• Oil prices little changed on Thursday.
• Prices post 3rd consecutive weekly gain.

WTI and Brent ended little changed on Thursday with the former closing up 7¢ at $53.18 and the latter adding 3¢ settling at $55.89. For the week WTI was up 1.8% and Brent up 1.2%. Baker Hughes in its regular weekly rig count report noted that the rig count continues to increase (13th consecutive week) to a two year high at 683 rigs. Last week, however, it was all about oil. Drillers added 11 oil rigs but the natural gas rig count fell by 3. The Permian basin remains the darling gaining 8 rigs and is now up 198 rigs, 140%, over the past 12 months. Lower 48 production is currently at a 15 week high above 9.2 million bpd. Very interestingly though, the Paris based International Energy Agency in its monthly report released on Thursday said global oil supplies fell in March. The agency said, “It can be argued confidently that the market is already very close to balance….”

This morning is beginning very quietly with WTI down 12¢. Apparently the North Korean blown (pun most definitely intended) missile launch did not spook investors.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices consolidating.
• Flat production and forecasts of hot back end of summer has traders in “buy dip” mode.

Natural gas prices ended little changed on Thursday closing up 4.0¢ at $3.227. Interestingly, the calendar strips were up as well, between 1.9 – 2.7¢. Over the past few months I’ve seen bigger moves in the prompt month with no move in the calendar strips. Hmmm. My antennae are up.

Last Thursday the EIA released its weekly storage report noting 10 Bcf was injected last week which was pretty much at expectations. Current storage levels are 416 Bcf, 17%, below last year and 263 Bcf, 14.6%, above the five year average.

Weather forecasts continue to be supportive of natty showing early warmth for the south which means A/C load which means above average natural gas burns. That being said, the cash market is a tad weaker this morning and the May contract is down 6.0¢.

Elsewhere

Continuing the nightmare for United, on Thursday Dr. David Dao’s, the man dragged down the aisle of the airplane, attorney held a press conference. Here’s what his attorney, Thomas Demetrio, said, along with translations.*

• “I hope he becomes a poster child for all of us.” Translation: This story could be around for many, many years to come.

• “The man suffered a concussion. He has absolutely zippo, nada, memory of going back onto the airplane.” Translation: There could be lasting impairment to his brain function, and if that is the case any payout by the airplane could be a costly one.

• “He’s going to have medical treatment for some time.” Translation: very expensive.

• “I hope he makes a full and complete recovery. That’s the hope.“ Translation: Very, very expensive.

• “I’m sure he would have picked ‘Good Morning America. ‘Charlie Rose’ if he could. He was sought after….. Even our president last night said that was horrible.” Translation: The PR blitz could get a lot more intense, unless a settlement is reached.

• “He was singled out for reasons maybe we’re going to find out….I don’t know what they are…..I don’t think this is a matter of race at all. I think what happened to Dr. Dao could have happened to any one of us.” Translation: His race probably didn’t play a part. Probably. Why don’t we let the public decide?

• “This was not a troubled passenger. This was not a nut job.” Translation: This was a traumatic event and we will be ready for any attacks on our client’s character or attempts to use his past mistakes against him.

• “He needed to get home. He’s a physician. He had patients to see the next day. His wife is also a physician. She also had patients to see.” Translation: Did I mention he’s a doctor?

• “Dr. Dao is in a secure location. Please leave the guy alone.” Translation: Stop bringing up events in his past.

• “We’re not ready to sue.” Translation: There will be a point when we will absolutely be ready to sue.

*I sure wish I could claim the translations but must give credit to Reuters.