Weekly Market Recap – August 5, 2022
The Senate passed a bill to expand medical care and other benefits to 3.5 million veterans who may have been exposed to toxins from burning trash pits on U.S. military bases. As we approached press time on Sunday, the Senate passed a $430 billion bill to forward President Biden’s economic package to combat climate change, address health care costs and raise taxes on large corporations; the bill will now go to the House. Drought conditions continue to exacerbate U.S. wildfires. As the weekend began, there were 32 large uncontained fires being fully suppressed. Another 30 were not being fully suppressed: 17 in Alaska, 3 in the Southwest, 5 in the Great Basin, and 4 in the Northern Rockies. Record flash floods in Death Valley National Park stranded nearly 1,000 park visitors due to mudslides and washed-out roads.
Monthly economic statistics released during the week, compared with prior levels were as follows: construction spending -1.1% vs. +0.1%, job openings 10.7 million vs. 11.3 million, job quits 4.3 million (unchanged), factory orders +2.0% vs. +1.8%, balance of trade -$79.6 billion vs. -$84.9 billion, nonfarm payrolls 528,000 vs. 398,000, unemployment rate +3.5% vs.+3.6% and consumer credit $40 billion vs. $24 billion. Quarterly figures showed that nominal credit card debt increased by 5.5% in Q2 vs. a 1.8% drop in Q1 and that Q2 real household debt rose 0.3% compared with the unchanged Q1 debt. The unemployment numbers for the weekly reports showed initial jobless claims rising to 260,000 vs. the prior 254,000 and that continuing claims rose to 1.42 million from 1.37 million.
For U.S. home buyers, the average rate on a 30-year mortgage dropped to 4.99%. Regarding this benchmark, Freddie Mac reported that this was the first weekly average below 5% since mid-April. The three stock indices that we monitor were flat to tepidly higher for the week. The NASDAQ Composite had an up-move to 12,657.55 (+2.2%), while the DJIA lost 0.1%, ending at 32,803.47 on Friday. The S&P 500 managed to squeak out a 0.4% rise, printing 4,145.19 at the close. An easing CBOE VIX accompanied the stock market ambivalence as this volatility indicator receded 0.8% to 21.15 at week’s end, its lowest in 17 weeks. In currencies, USD index futures inched up to 106.490 with a 0.7% gain. Commodity prices that comprise the portfolio of futures listed in the S&P GSCI ended at 649.27 (-6.3%). The incremental decline was the result of weakness in metals, energy, and agricultural contracts, as indicated by the futures price moves cited below. The GSCI has not seen a level this low since mid-February.
Metals sector futures were mixed. Their closing prices and percentage movements were: gold at $1,791.20 per ounce (+0.5%), silver at $19.842 (-1.8%), platinum at $924.70 (+3.9%), palladium at $2,128.70 (-0.05%), copper at $3.5520 per pound (-0.6%) and aluminum at $2,416.00 per metric ton (-2.9%).
In energy markets, the futures we report here were mostly stronger for the week. Closing values and their respective movements were as follows: WTI crude at $89.01 per barrel (-9.7%), Brent crude at $94.92 (-8.7%), heating oil at $3.2159 per gallon (-9.4%), RBOB gasoline at $2.8556 (-8.3%), and NYMEX natural gas at $8.064 per MMBtu (-2.0%). The outlier was ICE TTF Dutch gas, the pricing of which is largely influenced by Russia’s export manipulation, as oil and gas have been weaponized by Kremlin policies. The Dutch gas closed at €196.320 per MWh (+2.8%).
Of the nine agricultural contract prices we report, six succumbed to selling pressure, and three traded higher. Those in the red were: soybeans at $14.08¾ per bushel (-4.1%), corn at $6.10 (-1.6%), wheat at $7.75¾ (-4.0%), coffee at $2.0945 per pound (1.2%), cocoa at $2,305 per metric ton (-0.8%), and cotton at 96.13¢ (-0.6%). The winners ended the week as follows: sugar at 17.94¢ (+2.3%), live cattle at 143.875 (+1.2%), and lean hogs at 98.400 (+6.0%).
Futures Referenced in Market Recap
|ICE||Dutch TTF Gas||September|
|NYMEX||ULSD (Heating Oil)||September|
|LME||Aluminum||3 Mo. Forward|
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