ASA Advisor: U.S. rig counts down
General price deceleration seen across most commodity classes.

ASA’s Advisor (powered by Armada Corporate Intelligence) reports year-over-year U.S. rig counts are down by 59, while Canadian rigs saw a net decline year-over-year of 20. However, internationally there was a year-over-year gain of 84. This from Dr. Chris Kuehl’s larger macroeconomic viewpoints contained in the monthly Advisor.

Kuehl reports U.S. competitiveness in global petroleum markets continues to improve and it is expected U.S. petroleum exports will increase faster as the dollar stabilizes against other currencies.

Kuehl also explains across most commodity classes there has been general price deceleration, and stock-piling has affected late-cycle demand. Specifically, copper prices for 2019 are still contending with overstocks.

On the tariffs front, trade negotiations have broken down with China, while tariffs on steel from Mexico and Canada are being lifted, and tariffs on the EU have been postponed for six months.

Another interesting key takeaway from Kuehl’s take this month is that U.S. manufacturing activity remained positive as measured by the Purchasing Managers Index, but readings have fallen into the low 50s. Housing starts are down along with permits and sales of existing homes, Kuehl reports. Momentum, Kuehl adds, has stalled despite lower mortgage rates and a reduction in home prices in key markets. Kuehl forecasts that with 30-year mortgages stabilizing at around 3.5%, single-family starts should accelerate in 2019.

Kuehl also sites a Price-Waterhouse Cooper Trendsetter survey that shows U.S. CEOs are optimistic about the next 12 months as far as the U.S. economy is concerned, but are worried about the pace of global growth. Kuehl adds the rate of capex has fallen dramatically, but CEOs are still insisting they will be on track before 2019 ends.