Weekly Market Recap – August 2nd, 2019

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Weekly Market Recap – August 2nd, 2019

In the Markets

After several weeks of gains and new highs, U.S. equities came falling back to earth last week. The Dow Jones dropped 2.6%, the S&P 500 fell 3.1%, and the NASDAQ lost 3.9%. The main catalyst for the pullback seemed to be the return of tariff threats between the U.S. and China. After several weeks displaying the appearance of progress in trade negotiations, President Trump announced a 10% tariff on $300 billion worth of Chinese goods to go into effect on September 1st.

The tariff announcement came a day after the Fed’s July 31st meeting, where they chose to initiate a 25 basis point (bp) cut to interest rates. The interest rate cut was already predicted by the market, but investors had hoped for a larger cut of 50 bp. Additionally, the Fed announced an immediate end to balance sheet normalization one month ahead of schedule. As a result, the typically positive news of lowering interest rates was not enough to prevent equities from recording their worst week of 2019. On Friday the July employment report was released, showing 164,000 jobs added on the month, down from June’s 193,000.

Crude oil experienced a significant single day drop on Thursday, with WTI futures dropping 7.9% and Brent crude falling 7.17%. Gains to begin the week, as well as a slight rebound on Friday, left Brent falling a net 2.47% on the week, and WTI just losing 0.96%. Heating oil finished almost flat on the week, losing just 0.75%, while gasoline fell 4.96%. Natural gas posted its third straight losing week, down 2.21%.

Gold broke from the trend set by the rest of the precious metals sector by gaining on the week, up 2.74%. Silver dropped 0.77%, platinum fell 2.35%, and palladium plummeted 8.26%. Copper also dropped on the week, losing 4.54%.
Agricultural commodities joined the slew of futures to post losses on the week. Soybeans dropped 3.22% and corn fell 3.62%, while wheat managed to escape the week with just a 1% decline. Coffee and milk both fell on the week, down 1.6% and 1.09% respectively, while sugar finished flat. Lean hogs dropped double digits on the week, losing 11.7%.

World Cup Trading Championships

Durai Ramasamy weathered the eventful week, maintaining first place with a net return of 213.1%. The rest of the top 5 experienced some shuffling as Holger Groechel climbed into second place with a net return of 163%. Fabien Fischer took third place at a 114.4% net return, followed by Kurt Sakaeda who held a spot on the leaderboard with his fourth-place net return of 108.5%. Eduardo Ramos finished the week close on Kurt’s heels, standing in fifth place with a 106.3% return.


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