Weekly Market Recap – February 26, 2021
In the Markets
President Biden’s $1.9 trillion pandemic relief package was passed in the House. A panel of experts advising the Food and Drug Administration endorsed Johnson & Johnson’s single-shot COVID-19 vaccine. Initial jobless claims declined to 730,000 vs. the previous week’s 841,000 applications. Other economic statistics, compared to their prior levels, were as follows: the consumer confidence index was 91.3 vs. 88.9, durable goods orders for January were 3.4% vs. December’s 1.2%, January core capital goods orders were 0.5% (unchanged from December’s figure). Personal income for January grew by 10%, a huge improvement over the 0.6% uptick reported for December. Consumer spending rose 2.4% vs. the prior month’s decline of 0.4%. The monthly index of leading economic indicators advanced 0.5% compared with 0.4% the prior month.
On Thursday, the 10-year U.S. Treasury yield briefly topped 1.6%, trading at its highest level in more than a year, raising concerns for investors. All four stock market indices we track here declined for the week. The greatest percentage drop was the NASDAQ Composite’s 4.9% down-move to 13,192.34. The Russell 2000 had a weekly decrease of 3.1%, ending its Friday session at 176.06. The S&P 500 closed at 3,811.15 (-2.4%), and the DJI fell the least (-1.8%), ending at 30,932,337. CBOE’s VIX soared 26.8% as option premiums swelled, taking the volatility index to 27.95 at the close. In currency markets, higher interest rates boosted the U.S. Dollar Index up +0.6%, hitting 90.92 at the week’s end. Commodities, in general, are still advancing, as evidenced by the S&P GSCI. This diversified portfolio of futures closed at 476.98 (+1.5%), its highest end-of-week level in nearly two and a half years.
All the precious metals futures we cover in our recap weakened, settling as follows: gold at $1,728.80 (-2.7%), silver at $26.402 (-3.1%) and palladium at $2,310.10 (-2.5%). Platinum had the steepest decline in the precious sector, hitting $1,185.30 (-8.3%). The industrial metals managed to stay in positive territory, with copper at $4.0945 (+0.5%) and three-month aluminum at $2,152.00 (+1.0%).
In energy markets, crude oil kept rising, as NYMEX WTI reached $61.50 (+3.8%) and ICE Brent climbed to $64.42, gaining 3.7%. Refined products also increased. RBOB gasoline firmed to $1.8770 (+3.9%) and heating oil, the weakest in the petroleum group, added only 1.8%, as demand expectations in the northeast subsided, due to warmer weather forecasts. This led the March contract to drop to 1.8565 per gallon. A higher temperature outlook on the horizon also affected natural gas, which lost 9% from contract highs two weeks ago. Futures took a 7.4% dive from the prior Friday, ending the week at $2.771 per MMBtu.
Among the nine agricultural products featured here, gainers outnumbered losers (6 to 3). Soybeans closed at $14.05¼ (+2.0%), wheat edged up 0.7%, ending the week at $6.55, while corn settled at $5.55½ (+2.3%). Coffee’s strength was due to crop issues in Brazil; the May contract shot up to 137.50 (+6.5%). Cocoa prices moved up sharply by 6.5%, to 2½-month highs, ending at $2,604 per metric ton, possibly linked to reports of increasing demand for chocolate. Sugar’s path was downward for the week, with May futures settling at 16.45¢ per pound (-2.6%). Cotton prices also saw some slippage (-1.8%), as May’s final price for the week was 88.83¢ per pound. Livestock futures prices converged. Cattle declined to an even 120.00 (-3.0%), while hogs increased to its 87.150 close (+3.1%).
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