Equities and the Economy:

• Dow closes up 36 points at 18,903, 20 points shy of record high.

• S&P 500 added 10 to 2,187, just 3 points shy of record high.

• Nasdaq finishes up 39 points, at 5,334, 6 points shy of record high.

• U.S. dollar hits its strongest level in 14 years.

U.S. equities were driven higher yesterday buoyed by strong fundamentals and non-threatening words from Fed Chair Janet Yellen. Regarding the fundamentals, the Commerce Department reported that housing starts rose a whopping 25% in October compared to September at an annualized rate of 1.32 million units. That probably doesn’t mean anything to you but this will. This is the largest single month-on-month gain in more than 3 decades! Drilling down into the data, somewhat mitigating the headline number was that a large part of the increase, 69%, was due to an increase in the always volatile multi-family category, but even so, family home construction was up a robust 11%. This was a very good report.

Additional “good” data came from the Labor Department in its weekly initial jobless claims report. The report stated that claims fell 19,000 to 235,000 last week. This is the lowest level since the early 1970’s! This data is even more impressive than the ‘70’s figure for in the ’70’s the U.S. population was 2/3rds what it is now. So really initial jobless claims are far below the 70’s.

Inventors had their eyes on Fed Chairperson Janet Yellen and her testimony before the Joint Economic Committee of Congress yesterday for this was her first testimony since the election. The bottom line is she believes it would be appropriate to raise interest rates “relatively soon.” Traders are betting 90-% that will happen next month.

This morning we’re beginning very quietly with the Dow down a digit.

Oil

• Oil prices little changed yesterday: WTI closed off 15¢ at $45.42. Brent fell 14¢ settling at $46.49

OPEC is working hard to convince the world it will indeed come to an agreement on a production cut at its November 30th meeting. Yesterday Saudi Energy Minister Khalid as-Falih said he was “optimistic” that OPEC’s members will formalize a deal. As I’ve said repeatedly, OPEC WILL reach an agreement. They WILL sign an agreement. And then they will cheat. That being said, every day that oil can trade a dollar higher on hype or headlines equates to millions of dollars in OPEC’s, and Russia’, treasury.

What’s really impressive to me is how oil prices are hanging in there in the face of a very, very strong U.S. dollar. And it’s doing so again this morning with WTI up 19¢.

Courtesy of MDA Information Systems LLC

Natural Gas

• December natural gas fell 6.1¢ settling at $2.703.

• EIA released its weekly storage report stating 30 Bcf injected last week. Current storage levels are at a record high.

While the front month price fell, the calendar strips, which I focus on because for most of you it determines your natural gas and electricity rates, closed unchanged. Prompt month prices have rebounded 25¢ from a 3 months low earlier this month. Regarding storage, 30 Bcf was injected last week coming in close to the 29 Bcf expectation. Current storage levels are at 4,047 Bcf which is 41 Bcf greater than the record set last year. We’ll probably get a small injection in next week’s report further pushing inventories into record territory. Next week will most likely be the last injection of the year and withdrawals will start thereafter.

The weather forecast is little changed the morning from yesterday but some cold weather is moving into the midcontinent and south this weekend which is bringing out some utility buying which is pushing up the cash market and futures are following with natty up a hefty 11.4¢ as I write.

Elsewhere

“Post-truth.” Ever heard the term? Well, it’s the word of the year, per Oxford Dictionaries. The publisher defines the word as “relating or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief.” “Post-truth” was traced to first being used in a 1992 essay by late Serbian-American playwright Steve Tesich and has gone from being a peripheral term to a mainstay in political commentary. It’s usage had increased by 2,000 percent since last year. The organization said its use has spiked because of the Brexit vote in Britain and the rise of Donald Trump. It added that “post truth” as a concept has been finding its linguistic footing for some time “fueled by the rise of social media as a news source and a growing distrust of facts offered up by the establishment,” adding “people have been restricting their news consumption to sources that don’t claim to be neutral.”

The runner up for word of the year was “Brexiteer” used for anti-EU advocates. Coming in third was “Alt-right” defined as an ultra-conservative grouping in the United States “characterized by a rejection of mainstream politics and the use of online media to disseminate deliberately controversial content.” The term has been used a lot this week in referring to Steve Bannon who was chosen by Donald Trump to be his chief strategist.