Equities and the Economy

U.S. equities had their best week of the year last week pushing the indexes upward. The Dow gained 91 points, 0.51%, ending at 17,824, the S&P 500 added 8, 0.37%, to 2,089 and the Nasdaq rose 31 points, 0.62%, finishing at 5,105. For the week the S&P gained almost 3.3%, a very nice accomplishment. The Dow was up 3.4% on the week and is now once again positive for the year, albeit by the barest of amounts. Investors are becoming comfortable that an interest rate increase is ok starting to believe the Fed that the U.S. economy is on solid footing. Meanwhile, new economic stimulus in Europe is supporting equities on the Continent.

Regarding economic data, the Fed released its Kansas City Manufacturing index and sparing you the actual number, the important point is that it was in positive territory which is the first time that’s happened since February of this year. Thus, things are improving in the central region of the country

This morning U.S. stocks are down by the barest of amounts and this is because they’re being pulled lower by European equities with all the major bourses trading red. Dow futures are down 11 currently. Chatter.

Oil

Oil prices banged around Friday not doing much. The December WTI Nymex expired down 15¢ at $40.39 while Brent closed up 48¢ at $44.66. WTI’s price last week dropped below $40 to within a couple of dollars of this year’s earlier 6 year low. 80 year highs in U.S. crude oil inventories tend to do that. Baker Hughes released it weekly rig count report noting the number of rigs drilling for oil in the U.S. fell last week by 10 to 564. This is the 11th week in the last 12 the rig count has declined. There are currently 1,010 less rigs looking for oil than a year ago at this time.

You just got to work and it’s already been a crazy day for oil. Oil prices got hammered overnight but then Saudi Arabia announced they would work with producers within and outside of OPEC to stabilize the market. The announcement sent the shorts scurrying driving prices up, but only from the deep lows they were at for the January contract, which is now the prompt month, is still down 64¢ at $41.26.

Courtesy of MDA Information Systems LLC

Natural Gas

Although the country is currently going through a cold snap the weather forecast Friday morning did a big time shift to the warmer side in the 6-15 time period slaying the bulls and natty prices got knackered closing down 13.1¢ at $2.145. Today’s forecast shows normal to marginally above normal temperatures in the 6-10 day time frame but the 11-15 day time frame is showing some warm temperatures for the eastern seaboard and MidAtlantic regions. Our neighbors north of the boarder will be downright balmy! If the weather forecast continues to show above normal temperatures in the eastern half of the nation $2.00 is in the cross hairs. Just an early heads up. The November Nymex contract expires Wednesday. It looks like traders got their shorts on Friday for this morning natty is up 1.5¢

Elsewhere

All of us have seen the famous photographs and video clip of the Hindenburg as it was destroyed in flames. In the aftermath of the disaster a multiplicity of causes were given, but few place the blame where it should have been placed, on Adolf Hitler. It was 7:25 AM on May 6, 1937 when the Hindenburg was attempting a landing at Lakehurst, New Jersey after making its twentieth transoceanic flight. As it dropped its mooring lines it the ground crew two hundred feet below, the giant craft burst into flames. Twenty-seven passengers jumped to their deaths rather than die in the fire. The total death count was thirty-six, including one American member of the ground crew.

Following the event, most experts blamed an atmospheric electrical spark that supposedly ignited the gas that was flowing from a leak in the ship. Still other point to the high volatility paint used on the airship, which would have been something akin to coating it with rocket fuel. All of these scientific explanations, however, fail to take note of the political climate at the time, and herein may be the ultimate cause of the burning of the Hindenburg.

The extremist Adolf Hitler had just come into power and the U.S. government was very suspect the Germans would use their blimps, which were designed to use helium, for military purposes and the U.S. refused to sell any of the gas to them. Adolf Hitler had no other source for helium so he was forced to use the highly flammable gas, hydrogen, to fill the Hindenburg, all seven million tons of it. Thus, it was the Nazi dictator that was at a minimum indirectly responsible for the Hindenburg having to use hydrogen gas instead of the inert helium gas for blimps exposing them to catastrophe. .

Have a good day.