Stocks today held near support levels and finished the day up 43 points at 25,169 on light trading volume. During the day markets traded both positive and negative before the final uptick at the closing bell.
The US reported the latest estimate of Q1 GDP growth at 3.1% which, according to the gurus a few months ago was not in the cards. China also reported Q1 GDP growth at 6.4% (slowest rate in 10 years) and many think that this level was made possible by stimulus from the central bank and a 5.1% increase in China’s debt level which now stands at 248% of GDP. Europe’s GDP growth rate is 1.5% which is the slowest since 2013. The interesting thing about investing in today’s disruptive environment is that identifiable short-term trends seem nonexistent thanks to tweets and headline risks that change from moment to moment and day to day. The risk here is that you can make a trade which can quickly go the other way.
Oil prices continued to pull back after the US Energy Information Agency reported a tiny stockpile draw after last week’s huge jump in crude stocks. US stockpiles are currently growing at the fastest pace since 2016 which is pressuring prices. WTI crude today finished down 2% at $57.62 per barrel.
There is rising interest in Illinois based private equity firm JHL Capital since they are the owner of the only rare earth mine in existence within the US. They purchased a California mine a couple years ago out of bankruptcy for $1.3 billion and have begun to make a go of it. The mine that JHL purchased used to be the world’s largest rare earth producer but could not compete price wise with the Chinese so they shut down. The interesting issue however is that since there is no rare earth refining in America the concentrated ore must be shipped to China for processing. JHL is looking to reestablish rare earth refining and mining in the US again and their 2017 purchase looks like a very timely bet.