ELAM: Texas bounces back

first_img Pinterest Facebook TAGSDennis Elameconomyenergygasmarketoil WhatsApp Twitter In the PipelineDennis Elam Previous articleMATTER OF RECORD: May 16. 2021Next articleTHE ECONOMIST: The count Dennis Elam Facebookcenter_img WhatsApp By Dennis Elam – May 16, 2021 Dennis Elam is an associate professor at Texas A&M San Antonio and a 1966 graduate of Andrews High School and blogs at https://professorelam.typepad.com/markets/ I just finished an hour webinar with Dallas Federal Reserve Economist Keith Phillips. Texas is coming back better than other states from the COVID crisis. Texas continues to benefit from an influx of migrants from California and New York. The new work from home ethics has funds buying single-family homes for rental purposes.The drilling rig count is up. The demand for fuel with people coming out of COVID is driving crude oil prices higher. As I write Friday afternoon, WTIC is trading at $65.31 up $1.49 from just yesterday. Our target for a June high is in the low $470s.My lengthy list of energy stocks is bright green (up) for near every company. Energy ETF XLE is near a new high of $53.64, up from last November at $28. Even the energy service sector has finally rallied. Energy Service ETF XES corrected from $55 to $50 and has now rallied back near $60. This is a great performance mix for new wells in the Permian Basin as well as support services for existing wells.Unleaded gasoline is hitting new highs around $2.20. The outage at Colonial Pipeline and demand for more travel is supporting higher prices.The major stock indexes had a three-day correction. This sets the markets up for a final run to what should be at least a multi-month high in June. Look for the DJIA to hit a new high above 35,000. The S&P may rise to 4,500.Our outlook for lower bond prices, higher interest rates, is probably on hold until July.Political social mood continues to worsen between the two national parties. Israel is mounting a major offensive against Hamas. It is hard to imagine a successful meeting between Biden and Putin given Biden’s recent remarks about the Soviet leader. How long before the negative political comments seep into Wall Street? Twitter ELAM: Texas bounces back Pinterestlast_img

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