Equities and the Economy:

• Investors digesting major news events from yesterday.
• Nasdaq finishes at record high.

Investors are digesting the trifecta of news events that occurred yesterday. The first event was the conclusion of the ECB’s meeting. The central bank made no changes to their current accommodative monetary stimulus program but changed the language in the communique to clearly indicate interest rates would not be going lower. Second, ex-FBI Director James Comey testified before the Senate Intelligence Committee and while it looks like President Trump survived what could have been a devastating day, clearly his actions in this matter were inappropriate. Thirdly, the general election in the UK occurred and the Tories lost their majority in parliament. When Prime Minister May called for the election, and she did not need to call this election, she fully expected the outcome would increase the Tories majority. However, she mishandled the health care issue and the Labour Party picked up enough votes to take the Tories majority away. The results of this election will impact the Brexit negotiations between the UK and EU.

The U.S. equity markets ended almost unchanged from Wednesday with the Dow closing up 9 points to 21,183, the S&P 500 added a single digit to 2,434 and the Nasdaq gained 24 ending at 6,322, a new record high. The Nasdaq has recorded an astounding 38 record highs in 2017, the most since 1999. I guess it would be an understatement to say investors are in love with technology.

The only economic report of significance yesterday was the Labor Department’s weekly first time unemployment claims and it was a yawner.

This morning investors are returning to their bullish ways with the Dow up 42 points. As Old Turkey said in one of the must reads for traders, “Reminiscences of a Stock Operator,” “You know, it’s a bull market!”

Oil

• Oil prices end little changed.
• Prices at one month lows.

After Wednesday’s shocking DOE crude and products inventory report which sent oil prices plummeting, prices stabilized yesterday at one month lows with WTI falling 8¢ to $46.54 and Brent closing down 20¢ at $47.86. The DOE’s report was so shocking to me that I did some further research. While clearly bearish, the report was not as bearish as its face value. The DOE’s report last week was manifestly bullish showing aggregate inventories falling 9.9 million barrels when the historical average for that week was a net zero. I believe this Wednesday’s report was a “correction” to last week’s report. Averaging these two erratic data points yields an aggregate sum of crude and products rising 1.1 million barrels, an immaterial sum.

This morning there’s no material news and WTI is up 18¢. Chatter.

More African countries are pumping oil. Congo, once seen as non-existent producer of oil, is ramping up production. New projects have come on line and the country is projected to boost production by 25% next year to 350,000 bpd. Now this isn’t a huge sum but it chips at the efficacy of the OPEC and friends production cuts.

Courtesy of MDA Information Systems LLC

Natural Gas

• EIA releases storage report.
• Prices consolidating.

The EIA released its closely watched weekly storage report stating 106 Bcf of natural gas was injected last week. The number was a tiny bit bearish for the market was looking for a 100 Bcf injection. Neither the bulls nor the bears had an ax to grind and natty ended up 0.8¢ on the day at $3.028 and are settling in around the $3.00 level.

Returning to the storage report, current storage levels are 332 Bcf, 11%, below last year and 237 Bcf, 10%, above the 5 year average.

This morning natty is moribund, up a penny.

The higher natural gas prices are definitely impacting coal. The EIA reported yesterday that U.S. coal production, which is almost used exclusively in electric generation, is up 24% from this time last year.

Elsewhere

Tonight is game 4 of the NBA championship finals. You need to watch it! I’m saying this not because I’m a Golden State Warriors or Cleveland Cavaliers fan, but because you may see history being made, without the possibility of it being bested. Two nights ago with 45 seconds left in the game Golden State’s Kevin Duran drained a go-ahead 3 pointer driving a dagger into the hearts of the Cleveland Cavaliers leading to a 118-113 Warrior’s victory. No doubt it was a great come-from-behind victory, but much, much, MUCH more was accomplished. With Wednesday’s victory the Golden State Warriors set a record for the longest number of playoff wins in the history of the four major sports! With that victory Golden State won 15 straight playoff games. They have not lost a single playoff game! They are within one win of the first perfect postseason in NBA history, 16-0!. The previous longest streak was 14 games by hockey’s Pittsburgh Penguins during the 1992-1993 Stanley Cup playoffs.

Like I said, this is a must see! Game time is 8 PM Central.