Equities and the Economy:  

• Stocks eke out gains.
• Major indexes remain near record highs.

It was a muted session yesterday with the three main U.S. equity benchmarks posting very marginal gains yesterday. The Dow rose 17 points to 23,440, the S&P 500 climbed 3 points to 2,585 and the Nasdaq advanced 7 to 6,758. Recent weakness has been blamed on worries about delays in much-anticipated corporate tax cuts. All that really can be said though is that we’ve lost momentum for all three indexes are within 1% of their all-time highs. So far this year, the Dow has gained 19%, the S&P is up 16% and the Nasdaq has gained 26%. I would actually welcome a pullback of 2%-3% to relieve the “overly bullish sentiment out there right now. It’s been a historically long time since the market has seen a 3% decline for a peak, and 3% declines are very common.

Today investors will be tuning in with the 3 presidents of the world’s major central banks (Fed, ECB and BOJ) taking part in a panel discussion. Folks will be looking for clues on interest rate hikes.

This morning stocks are pointing to a lower open with the Dow down 42 points.

Oil

• Prices end mixed.
• OPEC and EIA release demand and production reports.

On the bullish side, yesterday OPEC in its monthly report raised its forecast for 2018 global oil demand by 360,000 bpd to 33.42 million bpd. This is the 4th consecutive month it’s raised its forecast. On the bearish side our EIA released its monthly productivity report noting that U.S. shale production is at a record 9.632 million bpd. That is up 14% since the middle of July 2016. It went on to forecast that December shale production will increase by 80,000 bpd marking the 12th consecutive month of production increases. The two reports offset each other and oil prices ended little changed. WTI closed up 2¢ and Brent settled down 36¢. Chatter. The EIA also noted that there are currently 7,342 drilled but uncompleted wells in the U.S. shale basins, the most since data collection began in 2013. This is bearish because these wells could easily come on line if economic conditions warranted.

Both oil benchmarks hit 28 month highs last week but have lost momentum, at least in the short term. WTI is down 25¢ this morning.

Courtesy of MDA Information Systems LLC

Natural Gas

• Prices retreat.
• Trading the weather.

After posting 5 month highs recently, natural gas prices have backed off about 14¢ with December gas closing down 4.6¢ yesterday at $3.187. The calendar strips were little changed. The weather models came in mixed yesterday morning with the short term forecast a little milder and the 11-15 day forecast a little colder. While that may be neutral, U.S. production continues to increase and is near record highs with output in the Midcontinent region (mostly Oklahoma) reaching an all-time high yesterday at 6.51 Bcf/d. This is keeping a lid on prices.

Although the weather forecast continues to show cold weather for the eastern U.S. for the remainder of November traders are hitting the “sell” button this morning with natty down 8.7¢ primarily because the 11-15 day forecast is a tad milder this morning, albeit still price supportive.

The U.S. is about to have a new LNG plant go commercial. Dominion Energy’s Cove Point, MD facility received FERC’s approval to export LNG cargos. The plant has been in the commission mode and is now gearing up for commercial operation. This will add 0.6 – 0.8 Bcf/d of incremental demand.

Elsewhere

Interesting facts about our universe.

• Gilese 436 b is a Neptune-sized exoplanet about 33 light-years away. Astronomers believe it embodies exotic states of water that causes its surface to be covered in burning ice. The pressure on the planet forces the ice to stay solid, but the extreme surface temperature of 570 degrees superheats the water causing it to steam.

• Black holes are formed when very large stars collapse and condense all their mass into a very small area. The Earth would be considered a black hole if its mass condensed to a radius of 1/3rd of an inch.

• There are anywhere between 200-400 billion stars in the Milky Way and an estimated 100 billion planets. Around one in five stars are like our sun, and astronomers have estimated that about 22% of them have planets the size of Earth in their habitable zone, where water can exist as a liquid. This means there could be 8.8 billion planets within the galaxy capable of supporting life.

• When analog television sets aren’t tuned to a channel correctly, it results in static and white noise. Around 1% of that is radiation left over from the Big Bang.

• Quasars occur when gas swirls around a black hole very quickly and friction causes it to heat up, emitting light. Astronomers have a discovered a group of 73 quasars that are over 6.5 times larger than the average quasar group. This structure is over 4 billion light-years wide and cannot be explained by the Theory of General Relativity. Theoretically, it shouldn’t even exist.