Morning Minutes

Natural Gas Slides as Storm Effect Fades




The recent run up in natural gas which was sparked by Gulf of Mexico production shut-ins related to Hurricane Ida appears to be coming to an end. The commodity price has come down 0.6% this morning as investors shift their focus to rebuilding, restoration and reopening. Meanwhile, the late summer heat wave which extended cooling demand also appears to be breaking in some areas, suggesting that shoulder season may be starting. Meanwhile, WTI crude oil is up 0.6%.

US index futures are all up about 0.2% following a mixed start to the month which varied between a 0.3% gain for the NASDAQ Composite to a 0.2% loss for the Dow Industrials. Investors appear to be waiting for tomorrow’s numbers which include the US nonfarm payrolls report (street 750K vs previous 943K) and service PMI reports from around the world. Investors may also look to tomorrow’s hourly average earnings number (street 4.0% unchanged) for signs of whether wage inflation is accelerating or moderating.  This morning, US factory orders (street 0.3% vs previous 1.5%) are due at 10:00 am EDT.

Investors appear to have taken yesterday’s ADP payrolls report in stride. Although the headline number was not as strong as expected (374K vs street 613K and previous 326K), they indicated that a steady recovery in US jobs continues and not being too strong could be seen as a positive among those hoping the Fed may hold off on tapering stimulus for a while. Weekly initial jobless claims (340K vs street 345K) were a bit better than expected, also indicating a positive job market.

This morning’s Canadian economic numbers have been disappointing. The July trade surplus was less than the street had expected ($0.8B vs street $1.4B), while building permits retrenched (-3.9% vs street +0.3% and previous 7.2%).

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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