Stocks continue to trade on the downside although mixed and with low volume. Apple Computer reports earnings after the closing bell. After the close the Dow was off 64 points to 24,099. Interestingly enough the NASDAQ was up 64 points.
According to GasBuddy.com, gasoline prices up north in Vancouver, BC hit $8 per gallon making Vancouver the most expensive place to fill up your car in North America. The high prices are the result of a combination of issues. The base price of oil is moving up thanks to global economic growth. Then Vancouver has high taxes on gas thanks to a transit tax, carbon tax and even a tax on tax tax. We call this the TIUTK Tax or “take it up the kazoo tax”. The third factor gets back to a tiff between BC and Alberta over the Kinder Morgan Trans mountain pipeline expansion project. Canada, Kinder and Alberta want to expand capacity on the pipeline while BC does not. The existing pipeline, built in 1953, runs from Edmonton, Alberta to Burnaby where it heads west to Vancouver but also south and crosses the US border near Sumas. From there it splits and goes to refineries at Cherry Point and Anacortes. With US refineries needing oil and hogging capacity on the line, supply for BC is tight thereby driving up prices at the pump. The expansion would ease the supply issue for BC plus allow Canada to export to Asia which China and Japan want. This issue is coming to a head and Kinder Morgan Canada has given elected officials until May 31st to approve the deal or it will cancel the project.
The ISM factory index eased a bit from 59.3 to 57.3 as US factories, while they continue to grow, appear to be having trouble keeping up with demand. The “prices paid for materials” component rose for a 5th month in a row, productivity dropped and the backlog hit a 14 year high. Sjhipping times are also lengthening as there is a shortage of truckers. The bottom line is that the factory sector in the US continues to hum along although the growth rate has dropped a bit.