Equities and the Economy:

• U.S. stocks suffer marginal loss yesterday.
• Disappointing auto sales weigh.

U.S. equities closed marginally lower yesterday under the weight of disappointing auto sales. The Dow lost 13 points ending at 20,650, the S&P 500 closed down 4 at 2,359 and the Nasdaq fell 17 points to 5,895. GM, Ford and Chrysler Fiat stock prices fell 3.4%, 1.7% and 4.8%, respectively. That’ll drag an index down. On the topic of automakers, yesterday Tesla surpassed Ford in market capitalization. Pretty amazing considering Ford is 115 years old and Tesla is just 14 years old. Additionally, Tesla isn’t even making money posting an annual net loss of $680 million while Ford made over $10 billion last year.

While auto sales was the headline news there was other economic data which was mixed. IHS Markit Economics reported its index of manufacturing activity fell to a 6 month low at 53.3. Their chief economist stated the post-election surge seen late last year is showing signs of losing steam. The index remains over 50 which indicating expansion so that’s positive. Separately, the Commerce Department reported some good news. Construction spending rose 0.8% in February to the highest level since April 2006. As Martha Stewart would say, “This is a good thing.”

This morning stocks are on the defensive with the Dow down 18 points. We might be just catching a breath after a good Q1 where the Dow posted a 5.5% gain.

Oil

• Oil prices slip.
• Oil flowing again in western Libya.

Oil prices closed a little lower yesterday with WTI closing down 36¢ at $50.24 and Brent settling 41¢ lower at $53.12. Blame the move on the news that the force majeure in western Libya that had shut in its largest field, Sharara, has ended. Separately, while data is showing U.S. production is increasing, it may not be elsewhere in the world possibly reflecting the effect of the OPEC production cuts. Bloomberg yesterday reported that oil stockpiles in the Caribbean have fallen 20-30 million barrels over the past 6 weeks.

The U.S. dollar is rebounding trading at 3 week highs but traders are shrugging it off with WTI up 37¢ this morning.

Courtesy of MDA Information Systems LLC

Natural Gas

• Moderating weather forecast weighs on prices.
• Production slipping.

After climbing to a 2 week high last week prices have pulled back by about 12¢ including yesterday’s 6.2¢ drop with the May contract settling at $3.128. Yesterday morning’s forecast showing temperatures moderating in the south in the 11-15 day time frame brought in some selling. While the forecast this morning isn’t much different for the eastern half of the country, natty is up a hefty 10.0¢, and lower production is the reason. Every day I look at U.S. dry natural gas production and the data this morning is showing it’s dropped below 70.0 Bcf/d to 69.6 Bcf/d. This may be only an anomaly caused by an Operation Flow Order (OFO) on Tennessee Pipeline due to too much gas on their system in the PA area requiring producers to ratchet back volumes. This is the problem in western PA, WV and eastern Ohio. There’s more production than pipeline capacity to move the gas out of the region. Beginning last year additional capacity was and is being built but it’s going to take some time to relieve the constraint. That being said, if production really is declining it’s very bullish.

Elsewhere

Congratulations to the North Carolina Tar heels on their NCAA Men’s Basketball Championship! Here are a few facts about the tournament.

• It’s been a long tradition to cut down the nets. However, beginning in 1986 the winning school also has been given the hardwood court. Many sell or auction off pieces to the fans.

• The record for most overtimes in a single game is four. It happened twice. In 1956 and in 1961.

• The record for the most points scored by an individual in a game belongs to Austin Carr, 61, in Notre Dame’s 1970 opener.

• North Carolina has recently been a powerhouse, but they weren’t in 1941. They have the dubious record of scoring the fewest points in a game, 20.

• Kansas City has hosted the most Final Fours, 10. That’s going to change in 2035. Indianapolis will then have that record. No accident there. The NCAA headquarters are in Indianapolis.

• The lowest seed to ever win the NCAA Tournament was Villanova as the number 8 seed in 1985.

• Only once have all the number one seeds made it to the Final Four. That was in in 2008: Kansas, North Carolina, UCLA and Memphis.

• The odds of filling out a perfect bracket are one in 9,223,372,036,854,775,808 (that’s quintillion!)

• The Connecticut Huskies are the only school to win his-and-her national championships in the same year. And they did it twice! In 2004 and 2014.

Speaking of Connecticut, in Dallas last Friday night the Mississippi State women’s basketball team stunned the UConn Huskies 66-64 and ended Connecticut’s record 111 game winning streak. Mississippi State earned a berth to the championship game and ended Connecticut’s bid for a 5th consecutive national title. Two days later Mississippi State lost to South Carolina 67-55 in the championship game. It was South Carolina’s first ever NCAA women’s title.