Weekly Market Recap – December 16, 2022

A breakthrough in science hit the headlines on Tuesday as the Lawrence Livermore National Laboratory in California announced a milestone: physicists had produced nuclear fusion ignition that generated more energy than it took to start the reaction. On Thursday, the Fed raised interest rates by half a percent; less than 24 hours later, the European Central Bank, Bank of England, and Swiss National Bank followed suit. Despite the encouraging inflation numbers earlier in the week, a resumption of inflation fears prompted stock investors to sell. The House passed a bill that would allow Puerto Rico to hold a referendum to vote for either US statehood or independence. A mid-week outbreak of more than 50 tornadoes battered 7 states in the South, and, From the Midwest to the Northeast, a massive winter snowstorm left tens of thousands of homes and businesses without power.

Monthly economic statistics released, compared with previous measures, were: federal budget -$249 billion vs. -$191 billion, consumer price index +0.1% vs. +0.4%, CPI year-on-year +7.1% vs. +7.7%, import price index -0.6% vs. -0.4%, retail sales -0.6% vs. +1.3%, retail sales excluding motor vehicles +0.2%vs. +1.2%, industrial production -0.2% vs. -0.1%, capacity utilization rate 79.7% vs. 79.9%, and business inventories +0.3% vs. +0.2%. There were no significant quarterly reports. Weeklies showed initial jobless claims fell to 211,000 from 231,000 and continuing unemployment claims were unchanged at 1.67 million.

Renewed inflation concerns, as mentioned above, were evidenced by the week’s decline in the stock market indices we track here. The DJIA fell 1.7% to 32,920.46, the S&P 500 dropped to 3.852.36 (-2.1%), and the NASDAQ Composite closed at 10,705.41 (-2.7%). The selling was orderly, as indicated by the CBOE VIX, easing to 22.62 at Friday’s close (-0.9%), The dollar continued its downward path as the USD Index futures inched lower to 104.333 (-0.1%). Across the commodity spectrum, bulls defined the moves, as the S&P GSCI portfolio of futures rose to 588.21 (+2.8%).

Despite the inflation narrative’s effect on the stock, metals traders appeared to believe that the demand side would weaken. All six metals futures we monitor moved to the downside. Settlement prices and weekly percentage decreases were: gold at $1,800.20 (-0.6%), silver at $23.328 (-1.6%), platinum at $1,000.00 (-3.5%), palladium at $1,706.60 (-13.3%), copper at $3.7615 (-3.0%) and aluminum at $2,375.00 (-4.3%).

In the energy markets we follow, all but one of the contracts rose throughout the week, and one plunged into the red, the opposite of the prior week; ICE Dutch TTF gas was the outlier again, this time it tumbled 17.0% to €115.451 per MWh. Regarding the other five energy futures on our list, the final results and corresponding percentages looked like this: West Texas Intermediate crude at $74.29 per barrel (+4.6%), Brent crude at $79.04 (+3.9%), heating oil at $3.1199 per gallon (+11.7%), RB gasoline at $2.1323 (+3.7%), and NYMEX natural gas at $6.600 per MMBtu (+5.7%).

The agricultural contracts on our roster of nine products ended the week with a score of two down and seven up. Those in the minus column were: soybeans at $14.83¾ (-0.3%) and cocoa at $2,475 (-1.2%). The gainers were: corn at $6.53 (+1.4%), wheat at $7.53½ (+2.6%), coffee at $1.6440 (+4.0), sugar at 20.09¢ (+2.5%), cotton at 81.92¢ (+1.2%), cattle at 155.775 (+0.1%), and hogs at 85.775 (+2.1%).

Futures Referenced in Market Recap

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