Trade talks seem to be the only game in town these days. Trade “hopes” drive stocks higher while trade “fears” drive them lower. Today it was trade hopes and the Dow closed up 181 points to 26,346. Trading volume was lower. Third quarter earnings get going with Delta Airlines reporting tomorrow. Next week all the big banks will report. The gurus are expecting that S&P 500 index earnings will be down 3% from this time last year.
Steel stocks tumbled to lows today after US Steel said its CFO was leaving and that it was looking to cut costs amid a slump in steel prices. One observation in the comment section of the article seemed to hit the nail on the head when the commentator wrote “funny how it works…..steel tariffs reduced steel imports which sparked domestic production which flooded the market with steel and caused prices to drop all while the tariffs caused a slowdown in global steel demand”. This seems kind of true as US steel companies are now hunkering down amidst a supply and price glut.
Barani “BK” Krishnan, an oil guru at Investing.com noted that US oil production hit a record high last week with oil drillers cranking out 12.6 million barrels per day. BK said this is remarkable given the fact that the US rig count has fallen to a two-year low. Despite this news, oil prices rose a bit as markets are nervous over Turkish military action in Syria and yet hopeful for progress between the US and China over trade. In trading today, WTI crude hit $53 per barrel posting a slight uptick. With record US production the price of oil is expected to stay within the $50 to $55 range but it all seems to hinge on the outcome of the US China trade negotiations. Natural gas meanwhile hit a low back in August but heading into what is supposed to be a colder than normal winter nat gas pricing has been starting to move higher. Inventories are ample so a price spike like last year is not expected.