Equities and the Economy:

• Stocks post marginal losses on Friday.
• Solid gains for Q1.

The major U.S. stock indexes closed marginally lower on Friday with the Dow falling 65 points to 20,663, the S&P 500 off 5 to 2,363 and the Nasdaq losing 3 points to 5,912. Looking at it from a longer term perspective, which is what we all really do, it was a month of mixed results but a good quarter. The Dow lost 0.7% for the month of March but rose a nice 4.6% for Q1 2017 marking its 6th consecutive quarterly gain, the longest since Q4 2006. The S&P was flat for the month but up 5.5% for the quarter posting its 6th consecutive positive quarter. The Nasdaq absolutely kicked butt. It was up 1.5% for March and a whopping almost 10% for the quarter, its best quarterly performance since the end of 2013. The small cap Russell 2000 was the laggard up 2% for the quarter.

Big tech was the big winner for Q1. Apple rose 24%, Facebook 23%, Priceline 21%, Amazon rose 18% and Netflix gained 16%. However, the overall best-performing stock in the S&P was a surprise for it was an energy company. NRG, whose stock rose a huge 50% in Q1. Wow!

Turning to economic data, the Commerce Department on Friday reported that person incomes rose 0.4% in February and that disposable income rose 0.2% with both being higher than economists’ forecasts. The personal consumption index, the Fed’s favored measure of inflation rose 0.1% for the month and 2.15% from a year ago. Remember, the Fed’s target is 2% so we’re there. This is further support for the Fed to raise rates.

Overnight the Asian stocks posted solid gains however the European stocks are trading much more muted and here in the U.S. the Dow is meandering up 7 points.

Oil

• Oil prices closed mixed on Friday.
• Lousy quarter for producers.

Oil prices closed mixed on Friday with WTI up 25¢ at $50.60 and Brent falling 13¢ closing at $52.83. The good news for producers; prices are at more than 3 week highs. The bad news, prices are down almost 6% for the quarter. Over Q1 2017 traders began questioning the effectiveness and sustainability of the OPEC led production cut agreement in the face of rising U.S. production.

Baker Hughes released its closely watched rig count report and the number of rigs working continues to rise. Last week the rig count was up 15 rigs, 10 oil and 5 natural gas. The total oil rig count is 824. That’s up 108% from its nadir last May. Current U.S. oil production is 9.15 million bpd, it’s highest in over a year. Since last October production has risen at an annualized rate of nearly 19%.

Similar to equities trading is muted with WTI down 19¢. Chatter.

Courtesy of MDA Informmation Systems LLC

Natural Gas

• Prices little changed on Friday.
• Current prices at two month highs.

While natural gas prices ended little changed on Friday with the May Nymex contract ending 0.1¢ lower at $3.190, prices last week hit two month highs. Over the past couple months the prompt month has risen more than 70¢, 29%, with the rally beginning on forecasts of the arctic blast we felt early last month. I told you this previously but it’s worth stating again because it’s crazy. The first 2 weeks of February were warmer than the first 2 weeks of March.

The weather forecast this morning is showing pretty much normal temperatures for most of the U.S. in mid-April which will follow some awesome weather in the Midwest and northeast next week. The 11-15 day forecast of normal temperatures in the south meaning less A/C load has brought some bears out with natty down 4.5¢.

The Baker Hughes rig report also noted the natural gas rig count is up 88% over the last 11 months. The big question I have is if the natural gas rig count is up that much how come U.S. natural gas production is 2.3 Bcf/d, 3%, lower than this time last year? Working on figuring that one out. I think “lag time” has a lot to do with it.

Elsewhere

Would you risk a year in jail to help an animal? That’s what Corey Hancock did. He was hiking on a scenic trail in Oregon when he came across a frail 3-month-old baby bear. “I didn’t have a choice. I wouldn’t have left it out there,” he told Inside Edition. “He seemed to be abandoned and dying. He was hardly moving at first when I walked up on him. I thought he was dead.” The cub, weighing just five pounds, looked certain to die. Hancock decided to rescue him carrying him for more than two miles. “I was carrying this little lifeless creature in my arms kind of wondering if he was going to make it,” he said. “I tried to give it CPR. I gave it a few rescue puffs and pushed on his chest. He took one breath. He was fighting to survive.” Hancock drove the bear to a wildlife center near Salem, Ore., where he is recovering well but can never be returned to the wild. Animal experts believe the hiker was out of line. Interfering with wildlife and taking them out of their natural habitat is illegal, according to the Oregon Department of Fish and Wildlife. The good Samaritan could have been fined $6,000 or even been sent to jail for a year. When queried Mr. Hancock said, “He would do it again.” On Wednesday, the Oregon State Police said that Hancock, who says he felt “a special bond with that little bear,” will not be punished for what he did.