Equities and the Economy:
• Stocks end little changed.
• Nasdaq squeaks out another record close.
After numerous indices posted record highs on Wednesday stocks bivouacked yesterday closing little changed. That being said, the Nasdaq’s small gain of 5 points was enough to push it to a new record close at 6,390, the 10th consecutive session it’s closed higher. The Dow shed 29 points ending at 21,612 and the S&P 500 closed unchanged at 2,473.
The economic news yesterday was solid but a few earnings misses offset the positive fundamental data. The Labor Department released weekly jobless claims yesterday noting claims fell 15,000 to 223,000 last week. This is the lowest in 3 months, although lower numbers were seen earlier this year. Translation: the labor market is “healthy.” Also, the Conference Board’s reported yesterday its index of Leading Economic Indicators rose by 0.6% in June coming in nicely above economists’ forecasts.
Regarding earnings, Home Depot dragged on the Dow with its stock price falling 4.1%, it’s worst performance since January 2016, on a disappointing report.
Looks like some profit taking is going on this morning ahead of the weekend and after a strong week. The Dow is down 84 points.
• Oil prices retreat marginally from 6 week high.
• U.S. dollar trading at 2 year low vs. the euro.
On its final day in existence the August WTI Nymex contract closed down 33¢ at $46.79 yesterday. Brent settled 40¢ lower at $49.30. Looks like a little profit taking came in being we’ve rallied about 6.8% from the July low. Prices are getting support from Saudi Arabia’s announcement they may cut production another 1 million bpd to offset the rise in production from Nigeria and Libya. Additional bullish data came from OPEC’s report that the cartel’s total crude inventories fell for a 3rd consecutive month to its lowest level in 5 years. On the bearish side, Iraq announced they expect to produce 5 million bpd by the end of this year, which compares to their current production level of 3.8 million bpd. Iraq is not in the production cut agreement.
The European Central Bank concluded their monetary policy meeting yesterday and although the bank didn’t announce a change in policy Bank President Mario Draghi hinted the bank may beginning tapering its QE program next year. This has sent the euro to a 2 year high vs. the U.S. dollar to the delight of U.S. commodity producers, including oil producers.
The profit taking continues this morning. WTI is down 37¢.
Courtesy of MDA Information Systems LLC
• EIA weekly storage data bullish.
• Current heat in the east dissipates.
The EIA released a bullish weekly storage report noting 28 Bcf was injected into storage facilities last week. This was 3 Bcf less than traders were expecting. Prices immediately bounced but couldn’t hold on to their gains in the afternoon on the midday weather forecast showing that next week the current heat wave in the Midwest and east will break down with normal weather conditions prevailing. At the day’s end August gas closed down 2.3¢ at $3.043.
Regarding storage, current levels are 9% below last year and 5% above the 5 year average.
This morning natty is down a penny. $3.00 continues to be the “magnet.”
Who are the best, and worse, tippers. According to a new CreditCards.com survey the best tippers are Republican males of the baby boom generation living in the northeast who use a credit or debit card. Each of the aforementioned categories leave a median tip of 20% of the total bill when they dine out making them the best tippers among diners at U.S. restaurants. Per the survey, women leave a median tip of 16%, and the median for Southerns and Democrats is 15%. Overall, 4 out of 5 Americans say they always give a restaurant tip with the median tip being 18%.
What about other service providers? The survey stated 68% of patrons tip the stylist or barber. 12% never do. In a coffee shop, 27% always tip the barista. 30% never do. When staying at a hotel, 27% tip the housekeeping staff. 31% never do.
The survey showed that men are more generous at tipping in a restaurant but women tip more often at the hairstylist of barber. 79% of women tip most or all of time compared to 74% of men. Baristas: 46% of women tip always or most of the time. Men, 41%. Hotel housekeepers: 47% women. 33% men.
Regional differences matter. Those in the Northeast are most likely to tip a waiter or waitress, housekeeper or hair stylist but coffee shop baristas get the best treatment in the Midwest and West.
Waiters and waitresses may want to avoid the South. It’s the only region where both the average and median tip left for servers at sit-down restaurants is a sparse 15%. For comparison, the median in the West, Midwest and Northeast are 18%, 20% and 20%, respectively.
Credit card users tip 90% of the time. Those who plunk down cash, only 76%.