Equities and the Economy:

• Headlines, not earnings data, dominating.
• Employment Report for January just released.

The U.S. indexes continued the chop that’s been prevailing this week. The Dow shed 38 points ending at 19.853, the S&P 500 slipped 3 to 2,276 and the Nasdaq lost 14 to 5,627. It’s earnings season and earnings have been good for the most part but you wouldn’t know it because it’s been news surrounding Donald Trump’s presidency that’s been hijacking the headlines. Example, Facebook reported stronger than expected earnings yesterday with advertising revenue soaring 53% y-o-y, but it was Donald Trump’s putting Iran “on notice” for test-firing a ballistic missile and his comment during his telephone conversation with Mexico’s President Nieto to stop the “bad hombres down there” from getting into the U.S. or he’ll bring in the U.S. military is what you’re reading.

Speaking of the fundamental data, yesterday the Labor Department released its weekly first time jobless claims noting they fell 14,000 last week to 246,000, a continuing the multi-decade low level trend.

The big news today is already out which is the Labor Department’s Employment Situation Report for January. 227,000 new jobs were added in January which was way over economists’ forecast of 197,000 jobs. The unemployment rate actually rose a notch to 4.8% because more people were looking for work. Job openings are near a record high and that’s drawing Americans off their couches to look for a job. A tighter labor market is forcing employers to pay more for workers. Last month hourly wages rose 0.1% to $26/hr. Over the past 12 months wages have climbed 2.5%, faster than the less than 2% annual gains over the past few years.

So how is the market taking the report? Pretty good. The Dow is up 128. By the way, Donald Trump, or his administration, is “jawboning” the value of the dollar, and it’s working. The dollar is on course for a 6th straight lower week being off 4% from cycle highs and now less than 1% away from its pre-election levels.

Oil

• Oil prices continue to find support over OPEC cuts.
• Still trading around $53ish.

WTI lost 34¢ closing at $53.54 and Brent settled 24¢ down at $56.56. Donald Trump’s putting Iran “on notice” had no effect on prices. Traders have one eye on compliance with OPEC production cuts, which as I said yesterday has been calculated at 88% which is pretty incredible, and the other eye on U.S. production, which has been and is forecasted to increase. We’ll get some insight into that with Baker Hughes’ rig count report this afternoon. The weakening U.S. dollar is also helping commodities priced in greenback. WTI is over $54 this morning, up 57¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• No cold weather for next 2 weeks.
• Natural gas prices getting bludgeoned.

While the March Nymex contract closed 1.9¢ higher yesterday at $3.187 the bears have been getting mauled lately due to the lack of cold weather. This morning’s forecast for the next 2 weeks is very warm and natty is down 12.0¢ at $3.067. Here’s the numbers. Just 8 calendar days ago, January 26th, natural gas traded $3.50. Today, $3.067. That’s a decline of 43.3¢ or over 12%. The last time natty traded at this level was way back on November 26th. We’re in the back half of winter and every day that’s warm is an mcf not withdrawn from storage and is another mcf not necessary to be injected this summer to meet next winter’s demand.

Elsewhere

Krispy Kreme just revamped its coffee, and to tempt customers into giving it a taste the chain is tossing in a free doughnut with every purchase. The special offer isn’t a one-day promotion either: You can get a free doughnut every time you buy a coffee at Krispy Kreme for three full weeks. Starting February 6 ending February 28, Krispy Kreme will provide customers with a free original glazed doughnut when they purchase a coffee in any size. No coupon is required, and customers may take advantage of as many free doughnuts as they can handle while the deal is valid.

The company is relaunching its coffee with a choice of two flavors: Smooth and Rich. The former is described as best for “subtle, easy drinking,” while the latter is darker and comes with a “more bold experience.” While Krispy Kreme’s effort to spruce up its coffee is hardly original, it’s hard to argue with how the company is promoting the new product: Everybody loves free doughnuts!