Weekly Market Recap – August 19, 2022
China’s economic slowdown has contributed to the drop in global oil demand; crude oil prices have slumped back to where they were when Russia invaded Ukraine in February. Russia-Ukraine tensions are heightening over threats regarding Zaporizhzhia, Europe’s largest nuclear power station. Inflation hit 10.1 % in Britain, propelled by surging energy and food prices.
Monthly economic statistics released during the week, compared with the prior month were as follows: building permits 1.67 million vs. 1.70 million, housing starts 1.45 million vs. 1.60 million, existing home sales 4.81 million vs. 5.11 million, retail sales 0.0% vs. +0.8%, business inventories +1.4% vs. +1.6%, industrial production +0.6% vs. 0.0%, capacity utilization 80.3% vs. 79.9%, and leading economic indicators -0.4% vs. -0.7%. Weekly statistics for initial jobless claims were 250,000 vs. 252,000, and continuing unemployment claims were 1.44 million vs. 1.43 million.
The stock market indices we follow sold off from the previous Friday. The Dow Jones Industrial Average closed at 33,706.74 (-0.2%), the S&P 500 gave back 1.2%, trading at 4,228.48 at the close, and the NASDAQ Composite went out at 12,705.22 (-2.6%). CBOE’s VIX settled at 20.60 (+5.5%). In currencies, the USD Index firmed all week, with the futures settling at 108.098 (+2.5%). The portfolio of commodity futures contracts in the S&P GSCI ended the week at 670.09 (-0.4%).
All six metals futures on our radar declined. Settlement prices and weekly percentage decreases were: gold at $1,762.90 (-2.9%), silver at $19.069 (-7.9%), platinum at $888.00 (-7.4%), palladium at $2,131.40 (-4.0%), copper at $3.6645 (-0.1%) and aluminum at $2,386 (-2.0%).
Energy contracts ended mixed after a volatile week. NYMEX WTI closed at $90.77 per barrel (-1.4%), with Brent crude at $96.72 (-1.5%). The refined products diverged as heating oil rose 5.2% to $3.7005 per gallon, while RBOB gasoline slipped 0.9% to $3.0175, 23% lower than its contract high from ten weeks ago. U.S. and European natural gas prices soared all week, with the NYMEX price testing its contract highs from early June, going out at $9.336 per MMBtu (+6.5%). Showing even more upward movement, the ICE Dutch gas price tested its all-time highs from mid-March as it skyrocketed to €244.550 per MWh (+18.7%).
For the nine agricultural markets we follow in our recap, the score was six lower and three higher. The contracts that lost value were: soybeans at $14.04 (-3.5%), corn at $6.23¼ (-3.0%), wheat at $7.53¼ (-6.5%), coffee at $2.1595 (-4.7%), sugar at 18.09¢ (-2.7%) and lean hogs at 93.125 (-6.9%). The gainers were: cocoa at $2,362 (+0.4%), cotton at 116.01¢ (+6.8%), and live cattle at 145.250 (+0.5%).
Futures Referenced in Market Recap
|ICE||Dutch TTF Gas||September|
|NYMEX||ULSD (Heating Oil)||September|
|LME||Aluminum||3 Mo. Forward|
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