Stocks are caught between geopolitical headlines, pre-holiday urban flight and solid earnings reports. The Dow was down 58 at 24,753 on trading volume that was lower than a snake’s belly in a wagon rut. For the week the Dow was up about 0.1%.
Earnings reports from Lowes, Tiffany’s, Foot Locker and Splunk came in on the positive side showing that corporate earnings continue to exhibit strength.
Geopolitical news however is another matter. The summit with North Korea was off and then might be on again. A North Korean spokesman apparently called the White House and said “hey we just blew up our test site and now you don’t want to meet with us?” Meanwhile NAFTA negotiations are stuck and Wilbur Ross will lead another trade delegation to China next week for continued talks.
Oil prices tumbled today after reports surfaced that Russia and Saudi Arabia might raise production caps. This, coupled with a surprise increase in the US stockpiles sent WTI crude oil down over 4% to close near $67.70 a barrel. A week ago WTI crude was at $72 per barrel. In talking to a scout dad last night who is a pilot for Kenmore Air, things in Vancouver, BC are getting crazy. Kenmore was allowed to make two test flights per day to Vancouver. Fuel for the aircraft all comes from the BP Cherry point refinery near Bellingham which is now shipping 1,000 truckloads of jet fuel to Vancouver each year to make up for the shortage of refined products getting into the area. Due to the population growth, a rapidly growing airport and a lack of capacity at the only remaining local refinery and the maxed out Kinder Morgan Trans mountain pipeline, gasoline in Vancouver is now over $8 per gallon. Washington State is benefitting immensely from this because we get cheap oil from Canada, refine it and then truck it back up to the Canadians. Washington refineries are some of the highest margin refineries in the world thanks in part to desperate buyers in Canada.
Markets will be closed on Monday. Have a good Memorial Day weekend. Give thanks to all those souls who served our country.