Equities and the Economy:

• Nasdaq ends at record high.
• Dow & S&P log 7th consecutive monthly rise.

The three major indexes all closed higher yesterday.  The Dow rose 29 points to 23,377 while the S&P 500 added a couple of points finishing at 2,575.  The Nasdaq had a fine day advancing 29 points to end at yet another record high at 6,728.  Yesterday marked the tech-heavy index’s 62^nd record close of 2017 matching a record set 37 years ago.

While October has historically sometimes been a bad month for equities, it sure wasn’t this year for the Dow logged a 4.3% gain, the S&P a 2.2% rise and the Nasdaq posted a 3.6% gain.  All there indexes had their biggest monthly percentage rise since February.  Both the Dow and S&P wrapped up their 7^th straight monthly gain, making for the longest such streak for the blue-chip gauge since April 2012 and the best for the S&P since May 2013.  The Nasdaq rose for the 4^th consecutive month.

Fundamental economic data continues to be positive.  S&P/Case-Shiller’s 20 city home price index rose a seasonally adjusted 0.5% during the 3 month period ending August and is up 5.9% compared to the same period a year ago.  Per the organization’s economist, “…nationally home prices have reached new all-time highs.”

The Chicago purchasing managers index rose to 66.2 in October, its highest reading since March 2011.  In a separate report, the Conference Board said its consumer confidence index rose to 125.9 in October from September’s 120.6 marking its best reading since December 2000.

Today the FOMC concludes its two day November meeting.  A post-meeting press conference is not scheduled and no change in monetary policy is expected.

Buoyed by well performing European equities the Dow is up a whopping 130 points this morning!

Oil

• Brent ends at more than 2 year high.
• API data bullish.

Yesterday Brent rallied 47¢ closing at $61.37 which is near a 2.5 year high.  For the month Brent was up 8%.  WTI yesterday logged a 23¢ gain settling at $54.38 posting at 4.7% gain for the month.  The push higher lately has been driven by what appears to be an agreement between Saudi Arabia and Russia to extend the production cut agreement to the end of 2018.

Bullish data was reported yesterday from a couple of sources.  First, Reuters reported that compliance among the OPEC led nations making up the production agreement rose to 92% in October from September’s 86%.  Saudi  Arabia continues to be the “heavy lifter” here producing below its quota.  Also, Venezuelan output continues to decline with the country in an economic depression.  The second factor is yesterday’s API’s weekly crude and products report which, as usual, was released after the closing bell.  The Institute reported a massive drawdown of oil and fuel stockpiles.  Way more than forecasts.  Crude inventories fell by a huge 5.1 million barrels, triple expectations!  Gasoline stocks fell by 7.7 million barrels, four times what traders expected!  Distillates fell by 3.1 million barrels compared to estimates of a drop of 2.5 million barrels.

WTI prices are being pushed higher this morning by the API report with December up 56¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices close lower.
• Warm weather weighing heavily.

Natural gas prices closed lower yesterday with the December contract falling 7.0¢ to $2.896. Current warm weather across the eastern 2/3rds of the country is making the cash market very weak which is heavily weighing on futures prices. This morning’s forecast shows no significant changes. Cash remains weak and natty is down 3.8¢. The 1-5 day time frame very warm.

I see a polar pig in western Canada on the map in the 1-15 day forecast but as of now it looks like the jet stream is keeping it north of the 49th parallel.

Elsewhere

Credit cards.  I don’t know of a person that doesn’t use one.  Credit was first used in Assyria, Babylon and Egypt 3,000 years ago.  The bill of exchange, the forerunner to banknotes, was established in the 14^th century.  Debts were settled by one-third cash and 2/3rds bill of exchange.  Paper money followed only in the 17^th century.

From the 18^th century until the early part of the 20^th, tallymen sold clothes in return for small weekly payments.  They were called “tallymen” because they kept a record, or tally, of what people had bought on a wooden stick.  One side of the stick was marked with notches representing the amount of debt and the other side recorded payments.

In 1950, Diners Club and American Express launched their cards in the U.S., the first “plastic money.”  In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York.  However, it was only in 1970 when standards were established for the magnetic strip that the credit card became part of the information age.  The rest is plastic history.