Stocks were lower today to end the month of May. The Dow fell 60 points early then recovered and finished off 20 to 21,008 on heavier trading volume. For the month of May the Dow was up about 0.3% while the S&P 500 gained just over 1% and is now up about 7.8% for the year.
Shares of Boeing were higher after the completion of its missile intercept test on Wednesday. The rocket was launched from Vandenberg “Air Head” Base in CA and hit a target ICBM fired from the Marshall Islands toward Alaska. It was just like what happened when Randy Johnson hit a bird while throwing a pitch during a spring game back in 2001. Could Boeing in this case be Randy Johnson and Kim Jung Un be the bird?
Oil prices fell today as traders were betting against the viability of the recent OPEC agreement to cut production by 1.8 million barrels per day. On the supply side the OPEC/Russia production cuts are being offset by rising output in the US, Libya and Iran. On the demand side the US is using less fuel as people buy electric cars while new gas cars are becoming more fuel efficient. Back in the year 2000, US passenger cars averaged 28.5 mpg but today they average about 37 mpg. I recall attending a seminar several years ago and this company in Bellevue called AFS Trinity estimated that if the average mpg rating in the US could reach 44 mpg then it would cut about 5 million barrels per day from consumption.