Weekly Market Recap – August 20, 2021

News headlines this week covered familiar topics. In Afghanistan, the Taliban took control of the country. The U.S. evacuation mission continues, and the EU is bracing for waves of Afghani refugees in the months to come. On the weather front, hurricane season is now ramping up. On Monday, tropical storm Fred peaked at 65 mph, making landfall on Florida’s panhandle. Hurricane Grace made landfall in Haiti, and intensified to 125 mph, hitting Veracruz, Mexico before petering out. Henri followed, taking aim at the East Coast. According to global average temperature data reported by NOAA, last month was the hottest July on record.

Monthly economic statistics, compared with previous levels, were as follows: retail sales -1.1% vs. -0.3%, industrial production 0.9% vs. 0.2%, capacity utilization 76.1% vs. 75.4%, business inventories 0.8% vs. 0.6%, housing starts 1.53 million vs. 1.64 million. Weekly initial jobless claims were the lowest since the pandemic began, dropping to 348,000 vs. last week’s 377,000.

Stock market indices moved lower for the first half of the week, then corrected a bit, but lost some ground from the prior Friday. The S&P 500 decreased 0.6%, ending at 4,441.67, the DJIA closed at 35,120.08 (-1.1%), and the NASDAQ Composite went out at 14,714.66 (-0.7%). Volatility soared 20.1%, as evidenced by the CBOE VIX, which spiked to 18.56. The USD Index rose to 93.45 (+1.0%). Falling prices in the commodity sector depressed the S&P GSCI to 494.42 (-5.8%), its first close below 500 in four months (494.10 on April 23).

With the exception of gold, which inched up 0.3% to settle at $1,784.00 per ounce, the other five metal futures we track here were in the minus column. The final prices were: silver at $23.112 (-2.8%), platinum at $994.20 (-3.1%), palladium at $2,276.50 (-14.30%), copper at $4.1370 (-5.8%), and aluminum eased 2.1%, with the LME Friday close at $2,546.50 per metric ton.

In the energy futures, the petroleum sector continued to sell off, closing at three-month lows. Settlements and percentage changes were as follows: WTI crude at $62.14 per barrel (-8.9%), Brent crude at $65.18 (-7.7%), ultra-low sulfur diesel fuel at $1.9082 per gallon (-8.2%), and RBOB gasoline at $2.0236 (+10.6%). Natural gas, the only non-petroleum energy product that we cover, had a down week, as well, with inventories rising more than expected. The front-month closed at $3.851 per mmBtu (-0.3%).

Of the nine agricultural contract prices we report, seven retreated, and two advanced.  Those in the red were: soybeans at $12.90 3/4 (-5.4%), corn at $5.37 (-6.3%), wheat at $7.14¼ (-6.3%), coffee at $1.8150 (-2.3%), sugar at 19.58¢ (-1.9%), cocoa at $2,567 (-2.0%), cotton at 93.10¢ (-1.3%). The winners were in the livestock category; live cattle finished at 129.050 (+0.7%), and lean hogs, closed at 88.625 (+2.4%).

Futures Referenced in Market Recap

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