Stocks continued to pull back as investors are wrestling with the realization that the Federal Reserve will not lower interest rates this year. People were secretly betting the Feds would lower rates but that bet appears to be off the table when Fed Chair Powell said he would do his best imitation of a traffic cone and just sit tight. The Dow closed down 122 at 26,307 on heavy trading volume. Banks showed leadership in the market today.
US Steel is set to report earnings today but, in the meantime, they announced they would build a billion-dollar steel mill in Pennsylvania at the Mon Valley steel works location. The plant will be a new “sustainable” endless casting and rolling facility making it the first of its kind in the US and one of only a handful in the world.
A lot is happening in energy markets. Oil prices were lower with WTI crude hitting the lowest price in a month at $61.25 a barrel off over 3% today. The selloff came after the release of the EIA’s weekly estimate for U.S. crude oil production showed that output jumped to a new record high of 12,3 million barrels per day. Also, oil inventories were at elevated levels as refineries head into the spring maintenance period. Meanwhile US sanctions on Iranian oil exports are in full swing and Turkey complains of not being able to completely replace Iranian oil with other sources. The EU also announced it will buy copious amounts of LNG or liquid natural gas from the US. In an interesting twist, NPR reported that China is going to build 300 coal powered generating plants around the world as part of its belt and road initiative. They are doing this while at the same time shutting down domestic coal plants or replacing coal fuel with natural gas in an effort to reduce air pollution within their own boarders. These plants are like a jobs program for Chinese coal miners.