Thursday, March 9, 2017

The Market And Energy Page, T+48; Shock And Awe -- Fight Is On! -- March 9, 2017

The Close

A last minute "save." The Dow squeaked out a 3-point gain; WTI recovered to $49 and change. 

Early Afternoon

WTI: down $1.37 and now trading below $49. The previous floor was thought to be $50. Is the new floor $45? The equity market seems to be taking it in stride; the Dow is down about 25 points, again, inconsequential after the huge run-up over the past few months. 


WTI: down $1.15; barely above $49.
  • yesterday, crude oil stocks rose by 8.2 million bbls, which I believe is the three consecutive week of nearly double-digit rise
  • the rise set a new all-time record in US crude oil stocks: 528.4 million bbls and this does not include the SPR which the government is now selling off (in line with usual government policies to buy high, sell low)

Dow: up 20 points; minimally affected by oil rout.


Jobs: first time claims jump more than expected Jumps 20,000 to 243,000. Forecast for 238,000 from the prior week's reading of 223,000, the lowest count since March, 1973. Four-week moving average came in at 236,500, an uptick of 2,250. The rise this week completely offsets the 19,000 drop one week ago.

Dow futures just turned green. Opening: up 8 points on the Dow. WTI at $49.76 -- the big story today.

WTI flirting with $49. Oil plunges in price. Harold Hamm: industry "binge" can "kill" oil market.
Harold Hamm, the billionaire shale oilman, said the U.S. industry could "kill" the oil market if it embarks into another spending binge, a rare warning in a business focused on fast growth to compete with OPEC.
ObamaCare: if folks remember, ObamaCare was a three-legged stool -- a) the corporate mandate; b) the individual mandate; and, c) the medical device tax. Overnight, Congress repealed the medical device tax; it was bipartisan -- even Elizabeth Warren was against this tax. Obviously she's a tool of the medical device sector in Boston. EW never saw tax she didn't like -- except ...  So, the tax on medical devices leg killed; the individual mandate killed (by executive order the IRS will not penalize filers for not enrolling in a health care plan; the corporate mandate being worked.

Staples: in deep, deep trouble. Down 8% yesterday; down another 2% today. Folks should have seen this in May, 2016, with the failed Home Depot - Staples merger. There are only two reasons why big companies merge, impending failure is one of the reasons. Too bad US regulators couldn't see that. But for investors, an open-book test.

South border crossings usually spike in February/March. In February, crossings have dropped 40%. Folks don't like paying $5,000 to cross border illegally just to risk being sent back immediately. Homeland Security says the number of apprehensions (a proxy for border crossings) the lowest in five years.

Fight is on: US Marines will crush ISIS capital, Raqqa, this week. When US Marines move in with "triple-7" they mean business. How will we know that ISIS is defeated in Syria? Oh, I think we will know.

Best business news show: Stu Varney. Great format. Stole idea from late-night talk shows. Johnny Carson had his Ed McMahon. Stu Varney has his Liz MacDonald. Stu does it one better with the incredibly good Ashley Webster who can host the show on his own when Stu takes a day off.  Look how Ashley got his start with with US network / cable television:
Webster began his journalism career at NBC affiliate KTVH-TV in Helena, Montana, where he worked as a news director. Before that, he had spent 6 years in London, working for the Bank of Montreal and Lloyds Bank.
Too Good Not To Report
For The Granddaughters

Barcelona soccer: greatest comeback in European soccer history

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