Equities and the Economy:

• U.S. stocks closed lower on Friday but up for the week.
• First round of French elections over and it’s “risk on” today.

The major U.S. indexes closed lower on Friday with the Dow falling 31 points to 20,548, the S&P 500 off 7 points to 2,349 and the Nasdaq dropping 6 to 5,911. On the bright side, all the indexes closed higher for the week with the S&P logging its first weekly gain in three. For the week the Dow, S&P and Nasdaq were up 0.5%, 0.8% and 1.8%, respectively. A steady stream of positive earnings through the week helped buoy stocks.

Let’s move on to today because to say global equity markets are “active” is an understatement. The closely watched first round of the French elections were Saturday and going into the elections investors were shedding risk taking a “wait and see” attitude. Well the outcome yielded no surprises, to investors’ relief, with the two candidates expected to win doing so and a run-off election schedule in a few weeks and money is pouring back into riskier assets, including stocks. Asian stocks closed higher but European stocks are skyrocketing led by France’s CAC 40 which is up a huge 4.22%. The euphoria has spread across “the pond” with the Dow up a hefty 189 points.

Keep an eye on the news this week. There’s a lot of potentially market moving events including more companies releasing earnings, the U.S. budget deadline where if there’s no agreement the government would shut down, and possibly the big hitter this week, the report on U.S. GDP.

Oil

• Oil prices get bludgeoned for the week.
• Rig count continues to rise.

Oil prices fell on Friday ending a lousy week for producers. WTI fell $1.09 settling at $46.92 and Brent lost $1.03 closing at $51.96. It was a tough week for producers with the slippery stuff posting a weekly loss of 7.4% marking its first weekly loss since the week ending March 24th. Although Saudi Arabia continues to talk of OPEC extending its production cuts traders keep seeing data that U.S. production continues to rise. Further evidence of future production growth came from Baker Hughes on Friday in its weekly rig count report showing the oil rig count rose another 5 to 688. This was the 14th consecutive week the oil rig count has risen. The natural gas rig count also rose by 5. This comes on top of the EIA stating last Wednesday that U.S. production hit a 20 month high above 9.25 million bpd. Texas continues to be the place to drill gaining 6 of the 10 rigs.

This morning oil remains on the defensive down 27¢. On a broader perspective oil has traded between $47 and $54 for about 5 months now.

Courtesy of MDA Information Systems LLC

Natural Gas

• Cash market pushing prices lower.
• Gas prices down 8% over the last few weeks.

Cash prices have been “leaking” lower since the first of the month which is weighing on futures prices, at least the prompt month. The May Nymex contract closed down 5.8¢ on Friday at $3.101. That being said, the calendar strips have been rising during the same period. For example, the calendar 2019-2021 strips have climbed ~10¢ during that time frame. That not only translates into higher burnertip cost but also puts upward pressure on electricity prices. We’ll have to see if this continues during the summer when the A/C load really kicks in. Supporting the back end of the curve is that U.S. dry natural gas production is not increasing despite a higher rig count. Now there is always a delay between a rising rig count and increase in supply due to the need to build infrastructure so let’s see if we get more supply this summer.

This morning the bears continue to push natty lower with it trading down 5.5¢ as I write.

Elsewhere

Interesting facts that occurred on April 24th.

1184 BC – Troy fell, with the help of the Trojan horse.

1704 – The first regular newspaper in British Colonial America, the News-Letter, was published in Boston.

1895 – Joshua Slocum, the first person to single-handedly sail around the world, left Boston aboard the sloop “Spray.”

1907 – Hershey Park in Pennsylvania was opened.

1953 – Winston Churchill was knighted by Queen Elizabeth II.

1961 – Bob Dylan made his first recording playing harmonica on a Harry Bellefonte song. He earned $50.

1970 – The first Chinese satellite, Dong Fang Hong I, was launched.

1880 – The Library of Congress was established.

1981 – The first IBM personal computer was completed.

1982 – Jane Fonda’s first workout video was released.

1990 – The $1.5 billion Hubble Space Telescope was launched from the Space Shuttle Discovery.

1994 – Madonna visited the San Antonio Spurs locker room to congratulate David Robinson on his 71 point game.