The President Owns This

The bear market in stocks is over, and clocking in at just 126 trading days is the shortest bear market in history. While the Democrats, at their virtual convention, slammed the way President Trump handled the coronavirus response and the way the Trump Administration has dealt with the economic fallout from the virus, it is hard to dismiss. The President nurtured the longest stock bull market in history by removing burdensome regulations and enacted the most significant tax reform since the Reagan Administration. President Trump created incredible jobs and wage growth and stock appreciation before the coronavirus shocked stocks into a bear market. That bear market hit the energy space hard where negative prices in oil stunned us as demand dropped, and OPEC and Russia flooded the market to destroy the U.S energy industry. President Trump brokered an international deal to support oil prices and helped avoid the bankrupting of the U.S. energy Industry.

While Democrats could argue that Trump's action on the virus made things worse by not taking more decisive action, they have yet to show that they would have done any better. Vice President Biden, when the Trump administration announced travel restriction from China to try to stop the spread on the virus from its epicenter, said that the President had a "record of hysteria, xenophobia, and fear-mongering." It does not look like the Vice President based that comment on science.

Yet real science is one of the reasons why the stock market is coming back. The Trump administration's unprecedented push for a vaccine is looking to take fruit, as many experts believe we will have one before the end of the year. If successful, it will be the fastest known time we went from a not previously identified virus to a vaccine for it in the history of the world. While the President will probably not get any credit for that in the press, the one thing they have to acknowledge is that President Trump has presided over the shortest bear market in history. President Trump owns that.

The oil bull market can also be credited to President Trump but is stalling out a bit as demand fears linger. The American Petroleum Institute(API) did report a very large 4.264 crude oil draw, adding to the recent run of large crude draws, but showed a big 4.991 million barrel increase in gasoline supply. That is raising concerns that the jump that we saw in gasoline demand last week might be stalling out. As far as distillates go, there is demand hope as the API reported the second draw in a row coming in at 964,00 barrels. We look at the EIA to give us clarity.

Stocks and oil may also get support on reports that the Trump administration sees a possibility for republicans and democrats to agree on a smaller round of pandemic relief totaling $500 billion that would omit the most significant areas of disagreement, according to a senior U.S. official. House Speaker Pelosi also hinted at a deal. It was reported that Congress might be able to reach an accord on issues like financial help for the Postal Service, aid to schools, and more money for businesses to keep their workers employed.

Bloomberg News reports that "Forces loyal to Libya's eastern commander Khalifa Haftar said oil ports closed since January can reopen. However, it wasn't clear if crude exports from the OPEC member would be allowed to resume. The ports can restart operations to dispose of stored fuel and gas to resolve electricity shortages in eastern Libya, Naji al-Maghrabi, head of an oil-facilities guard linked to Haftar's Libyan National Oil Company.

Oil traders and the natural gas trade have to start watching the Atlantic as storms are brewing. Three tropical disturbances have to be monitored as it is likely that one or more of them could impact oil and gas in one way or another. Spectrum News reports that at least two waves in the tropical Atlantic will need to be monitored for development this week. Both are moving west across open water for now. One wave is in the central Caribbean, moving swiftly to the west at 20 mph. Development is unlikely in the next couple of days, but it has a better chance of organizing this weekend as it moves into the western Caribbean. The second area to watch is about halfway between the Cabo Verde Islands and the Lesser Antilles. It has a high chance of developing into a tropical depression in the next couple of days but is currently far from land. Each of these is days from coming anywhere near U.S. shores if they reach here at all. However, the long term forecasts for both waves will need to be watched closely as computer models indicate a generally westward motion.