Will disappointing holiday demand be the story or will a new wave of economic optimism generated by last week’s better than expected jobs report make the headlines? Companies did add more jobs than expected as non-farm private payrolls actually rose by 67,000. Forget that Chicken Little maybe the sky isn’t falling after all but with jobs still far from a pace that will get us back to normal I don’t think that there is reason to celebrate. I think the market may slip into a negative mode. Did the Labor Day holiday bail us out on the demand side?
According to the Energy Information Administration heading into the Labor Day holiday weekend, U.S. retail gasoline prices fell three weeks in a row with an average price of $2.68 per gallon which was the lowest level of the 2010 peak summer driving season and the second lowest price at this point in the past five summers. Still not even that may save the demand side of the equation. With storms battering up and down the East Coast, demand for gasoline was most likely impacted negatively. We are in the heart of the shoulder season and demand will continue to be very weak. We still maintain a bearish bias but still recommend playing the ranges.
The storms in the Atlantic never seem to end. There are three tropical waves that currently have about a 30% chance of becoming a tropical cyclone. At this time the storms do not seem to be a threat still they will bear watching.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org