Equities and the Economy:

U.S. stocks log biggest gain in months.
S&P 500 sets new record high.

Although Irma knocked out power to over 6.5 million Floridians, damage appears to be less than was expected on Friday and with no North Korean missile test over the weekend it was “risk on” globally yesterday, and that included the U.S. The S&P 500 had its biggest percentage daily gain since April 24th climbing 27 points, 1.1%, closing at 2,488, a new record high. The bellwether index is up 10% for 2017 trading near 17.6 times expected earnings compared to its 10 year average of 14.3. This is one of the fundamental tenants of the bears. The other major indexes also performed great too with the Dow posting a whopping 260 point gain, 1.2%, finishing at 22,057 marking its biggest daily gain in 6 months and the Nasdaq climbed 72 points, 1.1%, to 6,432. Let’s call yesterday a “relief rally.” It’s hard to understand how simply the lack of bad news can send stock prices higher, but as Old Turkey said in Edwin Lefevre’s classic book Reminiscences of a Stock Operator, “After all, this is a bull market.”

Traded volume was 6 billion shares which is above the average of the last 20 sessions which was 5.6 billion. Good to see that.

There were no economic reports of significance released yesterday so let’s move on to today, which is looking to be a good start with the Dow up 56 points. Investors are focusing on that historically government spending in the aftermath of natural disasters tends to boost stocks.

Apple has a big event today announcing which much fanfare new products which will include the latest iPhones. Executives will boast of all the new wizardry in the new phone, but the most important feature may be the last to be discussed, if it’s discussed at all. The price. Word is the top model’s cost is $1,000. Ouch!

Oil

Oil prices post slight gains.
U.S.’ largest refinery back on line.

Oil prices logged slight gains yesterday with WTI closing 59¢ higher at $48.07 and Brent settling up 6¢ at $53.84. Brent hit a 5 month high last week. The Brent/WTI spread “blew out” with Harvey shuttering about 20% of the U.S. refinery capacity lessening the demand for crude oil. With those refineries returning, including Motiva’s plant, the largest refinery in the U.S., which commenced operations again yesterday after being down for 2 weeks, the demand for WTI is returning. Management expects the refinery to be at full capacity in 4 – 6 weeks. The return of the refining capacity is also putting downward pressure on gasoline prices which fell again yesterday by 1.31¢/gallon. I’ve seen gasoline prices at the pump begin to fall, but as is always the case, prices will fall more slowly than they rose.

This morning WTI is up 14¢.

Courtesy of MDA information Systems LLC

Natural Gas

Prices close higher.
Once again it’s $3.00.

Natural gas prices closed higher yesterday with the October contract settling up 6.0¢ at $2.950. Weather forecasts continue to trend warmer in the 6-15 day time frame which continues to bring in buyers. Also, gas used in LNG terminals, i.e., feed gas, which was all but shut-in due to Hurricane Harvey, is again flowing at close to capacity, 2.7 Bcf/d. Putting this in perspective, last year at this time LNG feedgas was 0.5 Bcf/d and 18 months ago it was zero. Two more LNG “trains” are scheduled to come on line before the end of the year which will add another 1.4- 1.6 Bcf/d of demand. Not an inconsequential amount.

This morning the weather forecast is once again warmer for the entire eastern half of the country for mid-September. While this won’t increase load much in the upper Midwest and east, it will boost demand for natural gas in the south for electric generation. Natty is up 3.2¢ as I write.

Elsewhere

One in 68 children in the U.S. has autism and it is the fastest growing developmental disorder in the U.S. per the Centers for Disease Control and Prevention. Autistic children struggle to, or don’t, recognize emotional cues from other people that children without autism do. Well, the folks at Stanford University’s Wall Lab are trying to help these kids by employing technology. The technology, called the Autism Glass Project, uses facial recognition software and runs on Google Glass. It reads facial expressions and gives the user cues as to what emotion they are seeing such as a corresponding emoji or color on the glass display. The project has been in development for two years and has been tested on more than 100 children with autism. Early results show the autistic children wearing the device got better at verbalizing what emotion they were feeling when previously they might have had a tantrum. The next step is to continue clinical trials to prove the technology. To date the feedback from the families who have used the device is very promising. As Martha Stewart would say this is a “good thing.”