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“The more wonderful the means of communication, the more trivial, tawdry, or depressing its contents seemed to be.” – Arthur C. Clarke
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Ahead of a busy morning for economic data, US futures are lower but well off their lows of the overnight session. S&P 500 futures are down just 10 basis points, while the Nasdaq is down 16. Treasury yields are down nearly 2 bps to 4.165%, and crude oil is down over 1.6% and on pace for another closing low. Gold prices are fractionally lower but still trading over $4,300 per ounce. In the crypto space, Bitcoin is up 1.5% but still only trading at $87,100.
As mentioned above, it’s a busy morning for economic data with Non-Farm Payrolls and Retail Sales hitting the tape at 8:30. It’s good to get some economic data again, but be forewarned that these reports could be noisy.
Most Asian markets were down at least 1% overnight, with South Korea leading the losses and falling over 2% as memory stocks were weak. European stocks are also weak this morning, but the losses are much more contained than what Asia saw overnight.
As mentioned above, crude oil prices are down over 1% this morning, and while not quite at 52-week lows on an intraday basis, if these losses hold, it will mark a new 52-week closing low. After briefly trading over $80 per barrel in January, prices have been in a steady decline almost all year. The only exception was back in June when prices briefly spiked after Israel launched airstrikes on Iranian nuclear facilities.
With this morning’s declines, crude oil prices are down close to 5% for the month, and if these losses hold throughout the next two weeks, it will be the fifth straight month of declines for crude oil. That would be tied for the longest streak since January 2015 (7 months). Since 1984, there have only been two longer streaks (7 months each) and five others that lasted five months. What would also make this current streak noteworthy if the losses hold is that it would also be the fifth month in a row that crude oil declines 2% or more. Since 1984, there have only been two streaks that lasted longer and one that lasted as long.
Even though crude oil is sinking towards new 52-week lows, the S&P 500 Energy sector has been holding up relatively well. While it’s underperforming the S&P 500 on a YTD basis, it’s still much closer to 52-week highs than 52-week lows. That may be partly due to the strength of natural gas, although even that commodity has weakened in the last few days, falling from $5.25 MMBtu on 12/5, down to $3.94 this morning.
