The stock market has made a dramatic move to the upside since the election, with the Dow Industrials rising more than 1800 points, or 10% in a little more than a month. This size of a rally is not unprecedented, however. It rose more in both percentage and actual points when it recovered earlier this year in January and also in the fall of 2015. Both of those advances led to some months-long consolidation periods, and we see the same thing coming for the current rally, but we are also confident that the longer-term trend will continue to be bullish. The smaller-sized growth stocks have led the Dow and S&P in performance during this most recent rally, which is a change from those previous rallies, where the FANG stocks led on the upside, and this is a positive change that should have better long-term implications, as it signals a higher level of investor confidence that is needed to support longer-term gains. Eventually, we expect the underperforming Health Care stocks to join in on the upside, but this probably won’t happen until later next year when the policies of the new administration are more apparent. Donald Dickey RBC.

Crude is bounded $40-$50. RBC Technical Charts Dec 7 2016.

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According to Brad Smith. Thanks Brad.

 

Just sayin'.

 

 

 

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Manufacturing, an economic backstop in shale-rich Texas, is witnessing a drop in payrolls in an otherwise mixed bag, the Federal Reserve Bank of Dallas said."Employment reports varied across sectors," the bank said in a report. "Manufacturing and energy services firms continued to trim payrolls."Apart from oil, Texas is one of the top manufacturing states in the country and the Federal Reserve Bank of Dallas said a stronger dollar, which makes U.S. goods more expensive, continued to put pressure on that part of the state economy.The bank warned earlier this year that the pressure from low oil prices was spilling over to other parts of the economy, with banks in southern U.S. states facing increasing risk. In its Beige Book, the bank said high-tech manufacturing growth was witnessed across the board, though construction-related manufacturing was mixed.The Federal Reserve Bank of Dallas said that, even though drilling activity picked up across the state, demand for oilfield services declined. With oil priced in the upper $40-per-barrel range, the bank said companies tied to the oil and gas industry in the state were showing signs of distress.Karr Ingham, an economist who created a so-called petro index to gauge the health of the industry, said there were "encouraging signs" that the worst was over for the No. 1 oil producer in the country, though some metrics still suggested the state may still be skimming the bottom of a downturn.Both oil and natural gas production in Texas were down from last year, Ingham said, with oil production off 7.8 percent from July 2015."Outlooks were generally positive but cautious, with the upcoming presidential election driving some of the uncertainty," the Dallas bank said. "Several contacts said they believe the worst of the oil bust slump has passed, but that economic growth has not yet returned to normal levels."

Moody’s Investors Service 1 Sept upgraded its outlook for the North American and European chemicals sector to stable from negative, indicating that the credit ratings agency “[does] not expect business conditions to change significantly” in the near future. “The North American and Europe, Middle East and Africa (EMEA) chemical industry’s EBITDA is likely to rise modestly through the end of 2017, as the benefits of modest global growth, acquisitions and cost-cutting programs are partially offset by further deterioration in a few commodity sectors,” Moody’s says. The slowdown in China is the key issue impacting commodity chemicals. Moody’s expects EBITDA for North American and European chemical makers to rise by about 1-2% through early 2018. The increase is expected to be driven by solid performance by diversified and specialty manufacturers, while commodity chemical makers lag behind. In particular, the housing and automotive markets in the US, and strong consumer demand, will drive growth, while European companies will benefit from currency impacts and restructuring. Agchems are expected to remain weak, and the ethylene chain will be hit by new capacity additions in the US ­– although as the US is now a low-cost producer, most firms are expected to remain profitable. Other commodities, such as chlor-alkali, titanium dioxide, and methanol, are showing signs of bottoming out, although the outlook is hardly rosy. A handful of commodities, such as styrene and polypropylene, have more positive outlooks, with polypropylene in particular remaining tight. China, however, is a “key risk,” according to Moody’s. “China is unlikely to provide an uplift to the chemicals industry n 2017 as it did during a period of demand weakness following the Great Recession,” Moody’s says. Lower growth in China has already put pressure on commodities due to overcapacity, and “any meaningful slowdown” would cause a rise in Chinese exports, putting further pressure on margins for commodities and intermediates, Moody’s says.Meanwhile, Moody’s expects M&A activity in the industry to “remain brisk.” Low organic growth and low interest rates are driving M&A transactions, although private equity firms will continue to be shut out of large deals due to high valuation multiples, Moody’s says. Sourced from Moodys website, Chemical Week, ACC Website and Platts.