The Closing Look

Stocks were closed on Monday in observance of the New Year Holiday. On Tuesday, stocks rallied on the first trading day of 2017 but closed off their highs after energy prices plunged. Natural Gas plunged 10% mid day on ample supply and a seasonally warm January and February. Oil prices U.S. opened higher but closed lower and hit a two-week low as the US dollar rallied. Economic data was mostly positive which helped the greenback rally. The ISM manufacturing index jumped to 54.7, a two-year high and easily beating estimates for 53.8. Elsewhere, construction spending jumped to a 10-year high and also beat estimates. The stronger than expected economic data strengthens the case for the Fed to raise rates later this year, hence the stronger dollar.

Gary’s Thoughts: See-saw day. Strong gap open…good sell…75 dow points to the upside in the final 30. WATCH GOLD here. Looks like it wants to turn up for now. Not sure duration but looks like money flows coming in. Stocks leading the metal. Also, oil prices reversed down hard but oil stocks did not. Something else to watch as many oil names sitting tight.

Two interesting political stories of the day. First, the moron Republicans tried squashing some ethics rules. Yup…first day of year and look what some wanted to do. The good news is Trump squashed them and went nowhere. Also. Ford not moving plant to Mexico and will invest in the good old U.S. of A. Ford CEO first says had nothing to do with Trump but then says it does…gonna be a fun 4 years and it hasn’t even started.