Equities and the Economy:

• Stocks move higher on prospects of tax bill passing.
• All three major indexes close at records.

U.S. equities have been moving up or down the last few weeks following the prospects of the tax reform bill passing. On Thursday Senators Rubio and Corker had concerns about the bill and Senator Rubio even said he would not support it in its current form. Well the Senator got what he wanted, which was an increase in the child care tax credit, and on Friday both senators came out supporting of the bill. With those two senators now on board it looks highly probable the bill will pass, and knowing that investors piled into stocks on Friday taking the three major indexes to new record highs. The Dow gained a healthy 143 points, 0.6%, closing the week at 24,652. The S&P 500 advanced 24 points, 0.9%, at 2,676 and the Nasdaq rose a big 80 points, 1.2%, ending at 6,937. It wasn’t just a good day for stocks, it was a good week. The Dow was up 1.3%, the S&P 0.9% and the Nasdaq 1.35%. Last week was the 4th consecutive week the Dow and S&P posted weekly gains.

Regarding the tax bill, the House is scheduled to vote on the bill on Tuesday and the Senate Wednesday or Thursday. Senator McCain (R-AZ), who is undergoing treatment for cancer, will not be in Washington to vote, but even without his vote the Republicans are confident they have the votes, but it will definitely be close.

The tax bill euphoria continues this morning with the Dow ripping 160 points higher.

Oil

• Prices close mixed.
• Oil rig count down on the week.

Oil prices closed mixed on Friday with WTI closing up 26¢ at $57.30 and Brent slipping 8¢ settling at $32.23. Chatter. It was a volatile week with prices rallying at the beginning of the week on news of Ineos’ Forties pipeline system in the North Sea being shut-in for several weeks due to a crack. However, as the week wore on and agencies reported a continuing increase in U.S. production and forecasts of further increases in 2018, selling came in wiping out all the gains. For the week both oil prices closed pretty flat with WTI down 0.1% and Brent off 0.3%, Both oils logged a 3rd consecutive weekly decline. That being said, I repeat, Saudi Arabia will do anything and everything to keep prices “reasonable” in 2018, at least until their IPO comes out which is expected in Q4.

Baker Hughes stated in its weekly report on Friday the U.S. oil rig count fell by 4 last week which was a surprise to traders. That was the first decline in 6 weeks. It is worth noting though that the current oil rig count is 237 higher than this time last year at 747 rigs.

On the rig count news and with equities higher and with the U.S. dollar a tad weaker WTI is up 23¢ this morning.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices continue to get hit.
• Weather forecast very cold.

Natural gas prices continued their slide on Friday with January gas getting whacked 7.2¢ closing at $2.612, a 10 month low. It was a very rough week for the bulls with January gas losing 5.8% on the week. Cash gas on Friday morning for the weekend was very weak driven lower by very, very warm weather over the weekend in the Midcontinent and eastern regions of the country. But that’s all changing folks! Remember that polar weather I talked about multiple times last week that was centered just west of the major gas consuming regions? Well the 11-15 day forecast this morning shows it moving into the upper Midwest, Mid Atlantic and New England states bringing with it some very cold temperatures. Temperatures will be 8-15 degrees below normal on New Year’s Eve. In fact, the below normal temperatures will reach all the way to the Gulf of Mexico. The haut monde women of Houston and Dallas will find an excuse to break out their furs.

This morning the bulls are finally getting something to celebrate with January gas up 10.9¢.

Elsewhere

I love a good craft beer! Small and independent craft beer brewing has exploded over the past couple of years. Here are some facts.

• 6,000 breweries were in operation during 2017, with 98% of them small and independent craft brewers.

• Over 1.1 million homebrewers produced more than 1.4 million barrels of beer. That equates to 1% of total U.S. beer production.

• Small and independent brewers employ 456,373 employees. That’s up 7.5% from 2014.

• Craft breweries contributed $67.8 billion to the U.S. economy in 2016, up 21.7% from 2014.

• American craft brewers donated about $73.4 million to charitable organization in 2016, up from $71 million in 2014.

Cheers!