Stocks rallied today as interest rates fell. The feeling is that with a Brexit vote on the horizon and the recent weak US labor report the Federal Reserve will stay pat for the month of June.
At the close the Dow gained 66 points on heavy trading volume to close at 18,004. This is the first close over 18k since mid-April and indexes are once again nearing highs.
US WTI crude oil continued to rise. Stockpiles decreased more than expected in the latest reading sliding by 3.2 million barrels. The gurus had suggested a 2.7 million drawdown so they were off the mark. With oil prices back up to a 52 week high US production is also starting to recover. Production ticked up by 10,000 barrels per day to 8,745,000 bpd from the prior week reversing a 15 week downtrend. With the US now a major energy producer along with Russia and Saudi Arabia the global dynamics have shifted power away from OPEC which is now in disarray. Global oil demand is still creeping higher but if the US adds back recent idled production it could put a long term price cap on oil. The rapid growth of alternative energy and electric cars will add to this price cap. WTI closed the day up 1.8% to $51.29 a barrel.
Gold continued to bounce back gaining $16.90 per ounce to close at $1,263 an ounce. The recent bounce in gold is due to rising odds the Feds will not raise rates until September combined with increased buying by big banks in search of a currency hedge.