Equities and the Economy

Good morning. U.S. stocks lower for a second consecutive day but it was a flesh wound with the Dow down 48 to 17,169, the S&P 500 off 12 to 2,109 and the Nasdaq closing 41 lower at 4,840. All the major indexes were flat to positive all day until the final hour when they rolled over. It was another day of mixed earnings with Boeing and United Technologies feeding the bulls and Goldman Sachs and United Healthcare feeding the bears. There were no economic reports of significance which also gave investors and traders no reason to trade.

Let’s move on to this morning because things are much more exciting today. The Asian markets closed mixed but Germany’s DAX and France’s CAC are rocking being up 1.51% and 1.39%, respectively. U.S. stock indexes are materially as well with the Dow up a big 163 points getting a boost from the just released weekly Labor Department unemployment claims report coming in better than expected at 259,000 remaining at levels last seen in 1973. It was the 33rd straight week claims were below 300,000 which is normally associated with a firming job market. At current levels there is not much room for claims to fall further and the very low level of layoffs suggests the labor market remains in good shape.

Oil

Oil prices felt the weight from the DOE’s weekly crude and products report showing a 4th consecutive build in U.S. crude stockpiles, specifically 8.0 million barrels and double expectations. WTI lost $1.09 closing at $45.20 and Brent fell 88¢ at $47.85. Yesterday OPEC and non-OPEC members met for a “technical” conference with Venezuela trying to make it into something more, and failing miserably. The meeting was held to discuss oil qualities, shipping problems, refinery requirements, et al with never the intention to discuss price, much to Venezuela’s chagrin. The only outcome, an embarrassed Venezuela. The next “real” OPEC meeting is next month and unless there’s an event of a material nature between now and then, there will be no change in policy, i.e., open the values to full flow and let the best man win! This morning WTI is getting a bounce on the big jump in equities.

Courtesy of MDA Information Systems LLC

Natural Gas

Natural gas prices fell yesterday with the November contract closing down 7.2¢ at $2.404. The intraday low was $2.379 which is the first time in 3 years prices have traded below $2.40. Today the EIA releases its storage report and the market is looking for an injection of 86 Bcf. Last year for this week we say a 94 Bcf injection and the 5 year average is 87 Bcf. Natty is up 0.9¢ as I write. Chatter.

Elsewhere

Sorry there is no elsewhere today. Due to a meeting I am running quite late today. Tomorrow, I promise.