Weekly Market Recap – April 17, 2020
In the Markets
Pandemic news has been the primary fundamental factor in global capital markets since February. As the data has begun showing COVID-19’s curves flattening, investors have been reacting more positively. Recent market action continued the uptrend as stock indexes posted strong gains for a second consecutive week. The Wall Street Journal stated, “The Dow had its best two-week performance since the 1930s.”
The DJIA closed at 24,242 on Friday, up 523 for the week (+2.2%, with +15.1% for both weeks). For the S&P 500 index, the final level of 2,875 was an increase of 85 (+3.0%, and +15.5% in two weeks). The NASDAQ Composite showed a bit more strength, having a 6.1% rise, due to its 497-point improvement to settle the week at 8,650. NASDAQ’s two-week increase amounted to +17.3%. There was a slight pullback in the Russell 2000, which had a 1-point decrease to 98 (-1.3% for the week, yet +16.6% in the two week period). Assessing those four markers on a year-to-date calculation: DJIA is down 11.0%, S&P 500 is 15.1% lower, NASDAQ shows a mere 3.6% decrease and the Russell has dropped 26.2% since December 31, 2019. The CBOE’s VIX scale eased further due to more stability in option premiums. The volatility index ended at 38.15 on Friday, its lowest weekly close since February 21st, when it settled at 17.08.
Precious metal futures were mixed, as June gold declined $54/oz. last week, ending at 1698.80 (-3.1%). Front-month silver slipped 4.7%, ending down 76 cents at $15.30/oz. The platinum group firmed as July platinum rallied 4.9%, up $36.70 to $785.30; and June palladium rallied 1.0%, up $20.90 to $2,130.90/oz. Base metals are also staging up moves from recent lows. CME copper rose 3.8% to $2.3445/lb. and LME aluminum increased by 2.2% to $1,512.50 per metric ton.
Energy market traders continued to focus on supply-side management efforts by global oil producers. However, stocks of crude and refined products spiked in the latest inventory report as storage approached full capacities. WTI futures ended the week at an 18 year low of $18.11 per barrel, down 20.4% for the week (making the year to date decline -69.8%). ICE Brent lost 12.3% from the previous week, settling at $27.60 (down 56.9% this year). Refined product prices were mixed. Heating oil futures closed at $0.9667 (-0.6%) as RBOB gasoline rose to $0.7133 (+5.3%). Natural gas prices increased as colder than normal shoulder season temperatures boosted demand. The May contract closed at $1.762, adding 1.7% from the prior week.
The week’s news about basic food commodities included stories about shortages as well as surplus conditions. The closing of restaurants and schools has led to fewer donations to food banks. Long lines at grocery retailers are getting even longer and some supplies are tightening. Yet, farmers are having to let crops spoil and dairy producers are dumping milk due to supply chain problems and customer attrition.
Soybean futures for May delivery fell 31¢ per bushel to $8.3250 (3.6%). Corn declined 9.5¢ to $3.2225 (-2.9%). Nearby month wheat fell by 23¢ to $5.3300 (-4.1%). Coffee lost 3.7% and sugar eased 0.6%. However, cocoa’s strong close on Friday rendered a 3.2% increase for the week, despite the lower global consumer demand for chocolate. Cotton lost 2.9%, as did FCOJ. Milk dropped 3.3%, hogs pared 10.2%, while cattle managed to stage a rise of 2.3% from the previous week.
World Cup Trading Championships®
Michael O’Keeffe held onto the top position with a 995.8% net return. A. Masters and Allen Swiontek held 2nd and 3rd as well with net returns of 388.5% and 332.5% respectively. Stefano Serafini and Yuwen Cao are neck in neck for the 4th and 5th positions with net returns of 231.2% and 218.7% respectively.
In the Global Cup, Michael Cook held first place for yet another week with a 235.2% net return. Stefan Seibert held 2nd with a net return of 208.4%. Robert Miner maintained 3rd with a 136.7% net return. Maxim Schulz and Wayne Wan held onto 4th and 5th with respective 131.5% and 100.2% net returns.
In the Forex division of the World Cup Trading Championships®, Nicholas Ridley finished the week holding onto first place with a net return of 139.6%, followed by Chien-Hung Chen at 87% and Raul Glavan at 79.4% net. Andreas Plagge and WenChen Zhang reclaimed spots on the leaderboard with net returns of 52.8% and 42.1% respectively.
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