Good morning. Stocks ended mostly down yesterday with the Dow rising 11 points ending at 17,078, the S&P 500 falling 2 to 2,001 and the Nasdaq getting hit 26 points settling at 4,573. While the former two indexes waffled on either side of unchanged the Nasdaq got whacked 0.56% dragged down by Apple which fell 4.2%. The fruit company (reference Forrest Gump) got hit with Samsung’s announcement their close to making a virtual reality headset (goggles) available commercially. Let me put it to you another way. While Apple’s touting a new phone with a screen that’s ¼ larger, Samsung’s introducing virtual reality gear.

On a broader scale the market has been on pause recently. The economic data has been good lately but the market is waiting to see what the ECB will do. The central bank, which is meeting today, has been vocal on using “all the available instruments needed to ensure price stability” to combat fears that deflation may be creeping into the euro zone.

The Commerce Department released factory orders for July yesterday and on the surface it looked great. Orders rose a record 10.5% The report was taken higher by very strong demand for commercial airliners. However, once you drilled down below the surface things didn’t look so rosy for orders for non-defense goods excluding transportation, which most folks see as representing business investment, fell 0.7%.

The ECB just concluded its meeting and ECB President Mario Draghi just had a press conference stating the bank will start buying securitized loans and covered bonds next month. These are non-financial private assets. He said the bank would buy broad portfolios of simple and transparent asset-backed securities and of euro-denominated covered bonds with full details of the new programs to be given after the ECB’s next meeting on Oct. 2. Mr. Draghi stated that taken together with the ECB’s new long-term loans to banks to be offered for the first time later this month, “the newly-decided measures … will have a sizeable impact on our balance sheet.” This is big time folks. One of the lessons I’ve taught over the course of the years of publishing this Report is that equities love QE. And the market are responding. Prior to the announcement the major European equities were trading below yesterday’s close. Now they’re “green.” Now we need contain our speculative euphoria for a lot of this is already built into the market. Two weeks ago at Jackson Hole Mr. Draghi made his comment on “all available instruments” well conveying his intentions. Investors here in the U.S. like what he’s saying for the Dow is up 73 this morning.

The violence continues in oil but this time I’m not talking about conflicts in Gaza, Iraq, Libya or Ukraine. I’m talking price. After falling $3.08 on Tuesday WTI popped $2.66 yesterday closing at $95.54. Brent lost $2.45 on Tuesday and recovered almost 100% of that loss yesterday ending up $2.43 at $102.77. I understand the whip-saw of Russia “invading” Ukraine followed the next day by an announcement by the Ukrainian President of a cease fire only to be immediately contradicted by Moscow stating there was such thing but that there were only “talks” but frankly it doesn’t justify to me the huge price swings of the previous two days. Larger than normal quantities of Maalox have been consumed over the last two days.

This morning oil’s price action is returning more to “normal” (if there is such a thing in commodity trading!) with WTI being down 65¢ moving in contravention to equities but having to bear the very heavy burden of a much, much stronger U.S. dollar relative to the euro. The euro is down 1.09% this morning which is an absolutely huge move for a currency over one day (at least for a country that’s not about to default on its debt).

After falling 17.5¢ Tuesday natural gas slipped another 4.3¢ yesterday closing at $3.847 on moderating weather forecasts. Today is Thursday and you know what that means. EIA natural gas storage report day. The market is expecting an injection of 74 Bcf. Last year for this week we saw an injection of 60 Bcf and the 5 year average injection is 56 Bcf. Natty is up 2.6¢ this morning. I’m sure this is some short covering ahead of the report at 9:30 CDT. Forecasts look pretty moderate for the eastern half of the country once we get through this weekend but get this. I was reading some research on grains this morning and there is was mention of the northern plains possibly getting an early frost in a couple of weeks. Hard to comprehend for a person who’s experiencing 94 degree highs, 76 degree overnight lows and 94% humidity. Have a good day.