Equities and the Economy:

• Dow marks 6th consecutive record, barely.
• S&P and Nasdaq retreat marginally.

U.S. stocks ended little changed yesterday but it was enough for the Dow, which rose 8 points to 20,620, to set a 6th straight record high. The S&P 500 closed down 2 points at 2,347 and the Nasdaq lost 5 ending at 5,815. Yesterday ended the longest winning streak since 1992 of all three indexes closing simultaneously higher. (checking your portfolio?) Since last week when President Trump promised markets that he plans on implementing “phenomenal” tax reforms equities have risen smartly. The Dow is up about 4% in 2017 and the S&P about 5%. Those extrapolate into some big gains for the year folks, but don’t go spend your money yet. We will get some periods of consolidation or correction. Yesterday I mentioned numerous factors that were wind to the sail for higher stock prices. Here’s another. Q4 2016 earnings for S&P companies have risen about 7.3%, the strongest since Q4 2014. Additionally, analysts are expecting Q1 2017 earnings to average a whopping 10.7%. Remember, current stock prices are reflecting this expectation.

Regarding fundamental news, the Commerce Department reporting housing starts fell 2.6% in January but this was due to a big drop of 7.9% in multi-family housing starts. Single family housing starts rose 1.9% and building permits rose 4.6%. That is good news.

This morning the Dow is down 53 points being dragged lower by Asian and European stocks which closed or are trading lower today. We just had a big run. Bivouacking is not to be unexpected.

Oil

• WTI and Brent been trading around $53 for two months now.
• Ying-yang of lower OPEC and “friends” production vs. rising U.S. production.

Nothing new in oil. $53ish WTI. We’ve traded between $50 and $54 since the beginning of the year. For those of you keeping track, WTI closed 25¢ higher at $53.36 while Brent fell 10¢ at $55.65. Oil prices traded higher intraday on reports that OPEC could extend their production cuts beyond the end of June and may cut production further if global inventories don’t fall to targeted levels. OPEC has seen about 90% compliance with the production cut deal which is pretty impressive. On the other side is the U.S. where, per our EIA, crude stockpiles are at their highest level since 1982. The morning WTI is down 23¢. Yawn.

Courtesy of MDA Information Systems LLC

Natural Gas

• Weekly EIA storage report bearish.
• Natural gas prices fall for 4th day out of 5.

The market was looking for the EIA’s weekly storage report to show a 156 Bcf withdrawal from storage for last week but that actual number was only 114 Bcf which brought the bears out of their caves pushing the March contract down 7.1¢ at $2.854. Natty prices have now fallen more than 65¢, 19%, over the past 3 weeks and are trading at a 3 month low. Prices have erased more than 90% of their late 2016 rally which was up to a two year high of just below $4.00. The weak seasonal heating demand due to warm temperatures is crushing the bulls. So how warm has it been this February? Based on actual and forecasted gas weighted heating degree days this February is on track to be the warmest since 1954!

This morning’s forecast continues to show above normal temperatures for the next two weeks for the eastern U.S. Natty is up 2.1¢ with the shorts covering before the long holiday weekend taking some chips off the table.

Elsewhere

Bye-bye thimble. You know, that common household item that was in every household at a time when everyone knew how to sew on a button. The protector of fingertips was immortalized as a playing piece on the real estate board game Monopoly with its inauguration in 1935. That immortality has ended. Modern Monopoly fans have voted to dump it. The voting results came about through a ruthless online competition that pitted the classic tokens against dozens of newcomers, including a dinosaur, an emoji, a hashtag, a horse and a helicopter. Voting closed at the end of January and the game maker Hasbro is slowly sharing the results, starting with the demise of the thimble. This isn’t the first time a classic token has been shown the door. In 2013, the iron was replaced with a cute cat. Hasbro will release the final results from the voting and the identities of the winning tokens on World Monopoly Day, March 19th. I’m sure you’re marking your calendar!