Weekly Market Recap – August 28, 2020

In the Markets

Initial jobless claims were above 1 million again (1,006,000), and 35 states have been approved for the enhanced unemployment benefit of $300 per week that was authorized by executive order on August 8th. A Category 4 hurricane, Laura, delivered the strongest landfall in Louisiana in 164 years, and brought the highest wind speed ever recorded at Lake Charles (137mph). More than 900,000 are still without electric power and 200,000 without water. Early estimates of Laura’s damages exceed $80 billion. COVID-19 deaths in the US have reached 182,000. On Friday, 50,000 marchers assembled peacefully in Washington DC at the site of Dr. Martin Luther King, Jr.’s 1963 “I have a dream” speech. Also on Friday, Federal Reserve chairman Jerome Powell indicated that the central bank will tolerate higher inflation and focus on keeping the unemployment rate from falling too far. This strategy is intended to create a long period of cheap mortgages and business loans to encourage strong demand and a solid job market.

Equities indices stayed on their upward course all week. The DJIA rose 723.54 (+2.6%), hitting 28,653.87 at Friday’s close; a 110.85 rise in the S&P 500 (+3.3%) took it to a 3,508.01 close, a new all-time high. Likewise, the NASDAQ Composite index staged another record high with its 383.83 up move (+3.4%) to an 11,695.63 final mark. The Russell 2000 firmed, as well, yet is the only one of the indices we cover in our recap that is still negative for the year (-4.9%), having a 2.09 weekly gain to 126.65 (+1.7%). Volatility in equities has ticked up a bit, as the CBOE VIX ended at 22.96 with a 0.42 rise (+1.9%). In the currency market, the dollar weakened, as the spot US Dollar Index ended at its lowest weekly close (92.30) since April 2018. In commodities, the steady uptrend is intact. The S&P GSCI, which settled at 359.94, rose 6.58 (+1.9%) from the prior week. This index is up 49.1% from 241.44, it’s lowest weekly close this year (April 24th).

Metals are ticking higher again. CME copper added 2.7%, closing at $2.9950/lb., its highest weekly close in more than two years. LME three-month aluminum gained 2.0%, ending the week at $1,800.00 per metric ton, the highest it has been since January. In the precious sector, the most active contracts for gold, silver, platinum and palladium all moved on the plus side: gold rose by $27.90 (+1.4%) to $1,974.90, silver increased by 88.3¢, to $27.760 (+3.3%), platinum gained $13.90 (+1.5%) to $940.00 and palladium rose by $17.50 (+0.8%) to $2,197.80 per troy ounce.

On the charts, the petroleum complex maintained the upward trend. NYMEX crude oil prices booked an increase, as September WTI ended Friday’s session at $42.97, which was up 63¢ (+1.5.%). ICE Brent gained 88¢ (+2.0%), settling at $45.81 per barrel. A gallon of heating oil added a mere 0.82¢ to close at $1.2162 (+0.7%), while RBOB spiked because of Hurricane Laura. After the storm weakened as it moved inland, gasoline eased back, gaining 3.14¢ cents for the week, settling at $1.3155 (+2.4%). Disruption from Laura also impacted natural gas: spot natgas futures ended 8.4¢ higher for the week (+3.3%). Friday’s $2.657 settlement was the highest price gas traders had seen since April 2019.

In the agricultural futures sector, the greatest percentage gain of the week was in cocoa, with an 8.9% rally. The confluence of bullish factors included continuing dry weather in West Africa, inventories dropping to a 5½ month low and a large reduction of exports out of Nigeria. December cocoa increased $214 per ton, closing at $2,623 on Friday. ICE’s coffee contract gained 7¢ (+5.8%) to $1.2710/lb., sugar slipped 0.23 (-1.8%) to its 12.60¢/lb. close, and cotton futures improved by 1.2%, as the December contract closed at 65.08¢ per pound. Among the most active Ag markets, the grains and oilseeds were boosted by bullish fundamentals ranging from weather and crop reports along with export data. CBT soybeans shot 49¾¢ higher (+5.5%) to a $9.50½ settlement price. December corn also rallied, gaining 5.5% with its 18¾¢ move to $3.59¼ per bushel. September wheat increased 12¢ (+2.3%) to $5.39¼ at Friday’s close. Livestock markets retreated as October cattle dropped 3.65 (-3.4%) to a 104.90 close, while hogs ended at 53.650, easing 0.600 (-1.1%).

World Cup Trading Championships®

In Futures, Michael O’Keeffe has held the top position, based on the end of week standings, for the 20th week in a row with a 437% net return. Stephan Seibert held 2nd with a net return of 237.4%. Yuwen Cao moved up to 3rd with a net return of 225.1%. Orhan Özcan and Stefano Serafini rounded out the top 5 with net returns of 221.3% and 122.3% respectively.

In the Forex division, Nicholas Ridley remained in the top spot with a 260.5% return. Jan Smolen held 2nd at 124.4%, with Sergey Shirko finishing the week in 3rd with a net return of 108.1%. Raul Glavan and Scott Welsh rounded out the top 5 with net returns of 86.3% and 72.4% respectively.

In the futures division of the 2020-2021 Global Cup Trading Championship, Jan Smolen moved up to first with a net return of 71%, with Adrian Koemel following in 2nd at 66.2%. 3rd place is currently held by Samuel Sum with a net return of 61.7%. Stefan Seibert and Fernando Piñeiro finished the week in 4th and 5th at 59.8% and 39.9% respectively.

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