Stocks pulled back and closed the day off 201 points to close at 25,989 on mixed trading volume. Worries over slowing global economic growth was the cause of the pullback. For the week, the Dow was up 3%. Both IBD and BTS indicators have swung back to positive readings which indicates the odds of a rally are now greater than the odds of a pullback.
Oil prices continue to fall and are now down 20% with WTI crude falling below $60 per barrel. The story line is that US oil producers are flooding the markets with product while the hoped-for cutbacks from Iranian sanctions were given a 6-month delay when the Trump administration allowed 8 big nations to continue buying Iranian oil while they get through the winter months and line up other suppliers. While oil prices are down however natural gas prices continue to move higher as US demand grows along with rising exports to Mexico. This is happening in the face of US gas stockpiles that are currently below average. Natural gas was up another 7% today to $3.70 per million BTUs.
Natural gas exporter Cheniere Energy reported a 30% revenue gain and an increase in net income of 121%. Poland just signed a deal with Cheniere and is addressing its energy future by 1) signing a 24-year supply contract with Cheniere for liquid natural gas. The deal, from Poland’s standpoint, moves them away from buying natural gas from Russian (aka Putin), 2) the price of gas delivered to Poland from Cheniere is approx.. 30% cheaper than what Gazprom was charging and 3) Poland also announced an initiative to install 9 gigawatts of wind power with the savings. It’s a “wind, wind, wind”. Ha ha.
Mickey Mouse roared, and Disney reported better than expected earnings sending shares back toward an all-time high. Revenue gained 12% and net income was up 38% beating estimates as softness in theme parks was offset by streaming and studio revenues that gained 50%. Disney is planning on another sequel for Star Wars proving that both infinity and inertia exists in corporate planning.