Weekly Market Recap – January 29, 2021

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Weekly Market Recap – January 29, 2021

In the Markets

Initial jobless claims declined to 875,000; the report for the previous week was 914,000 first-time applications. Economic statistics, compared to their prior levels, were as follows: the consumer confidence index was 89.3 vs. 87.1, durable goods orders were 0.2% vs. 1.2%, core capital goods were 0.6% vs. 1.0%, personal income for December was 0.6% (November was down 1.3%) and consumer spending fell 0.2% vs. -0.7%. The monthly report of the index of leading economic indicators advanced 0.3%, the lowest change in six months. Gross domestic product growth for Q4 plunged to +4.0 after Q3’s record +33.1% (Q2’s GDP had been a 31.4% decline.)

As the U.S. vaccination programs are proceeding at slower rates than expected, another mutation has arrived onshore. This mutation referred to as the South Africa variant has been detected in South Carolina and Maryland. Disease experts consider the South African strain to be more infectious than the others.

Throughout the week, the stock market news was dominated by systemic factors unrelated to the pandemic, the economy, interest rates, the USD or politics. Hedge fund trading activity in large short option positions in companies with distressed stock prices was countered by thousands of small investors who used social media to coordinate their buying of these stocks. The resulting “squeeze” led to unusual gyrations in volatility. CBOE’s VIX (aka “the fear index”) leaped 11.18 points, from 21.91 the previous week to 33.09 on Friday. This was a 51.0% spike. During the first, and worst, phase of the pandemic-based market crash, the VIX had a weekly 134.8% rise of 23.03 points (from 17.08 to 40.11). That occurred at the end of February 2020, when the markets began to tank from the growing investor panic attributed to COVID-19.

This past week’s movement of the benchmarks we track here was decidedly bearish. Across the board, stocks registered losses. The DJIA plunged 1,014.36 (-3.3%), printing 29,982.62 as its Friday close; there was a 127.23 decrease for the S&P 500 (-3.3%) closing at 3,714.24. NASDAQ’s composite index had a 472.37 down move to 13,070.69 (-3.5%). The Russell 2000 fell with a 7.61 drop to 166.00 (-4.4%). In currency markets, the dollar improved slightly, evidenced by the spot US Dollar Index, which ended up 0.32 (+0.4%), to its 90.53 close. S&P’s GSCI, moved to 430.99, increasing by 3.59 (+0.8%) at week’s end.

Except for silver, the metals sector declined in price. March silver gained $1.358 (+5.3%), ending at $26.914 per troy ounce. Gold eased $8.90 (-0.5%) to its $1,847.30 settlement price. In percentage terms, platinum and palladium gave back more than gold. The former fell $32.40 (-2.9%) to its $1,079.20 close, while the latter dropped to $2,208.40 (-6.6%) with a loss of $156.80 for March delivery. The base metals that we cover in our recap weakened, as well. Copper retreated 7.0¢ (-1.9%) to close at $3.5560 per pound. LME aluminum for 3-month delivery slipped $17.00 dollars per ton, ending at $1,977.50 (-0.9%).

Energy futures were mostly higher, excluding NYMEX WTI crude oil, down only 7¢ (-0.1%), ending at $52.20 per barrel. Front-month ICE Brent crude added 0.8% (+ 47¢) to its $55.88 settlement. Refined products also rose: March heating oil firmed 2.02¢ to close at $1.5984 (+1.3%), while RBOB gasoline inched up 0.77¢ settling at $1.5527 (+0.8%). Weather forecasts featuring the polar vortex gave natural gas in the U.S. some added demand support, boosting the futures by 10.8¢ (+4.4%) to $2.564 per MMBtu.

Of the nine agricultural products we focus on here, four advanced, four retreated, and one was unchanged. Wheat settled at $6.63 per bushel, up 28½¢ (+4.5%). Corn, with its $5.47 close, gained 46½ ¢ (+9.3%) for the week. Soybeans went out at $13.70, after rising 58¼¢ (+4.4%). Livestock was mixed: hogs ended at 76.650 for April, adding 0.500 (+0.7%), while cattle sagged 0.675 during the week (-0.6%) to a 121.850 close. The ICE US softs were mostly weaker, as coffee decreased 1.20 (-1.0%) to 125.00 from the previous Friday, cocoa slipped $12 (-0.5%) for the week, closing at $2,474 per ton, and March cotton gave back 0.92¢ (-1.1%) to its final price of 80.64¢ per pound. Holding its ground, sugar was unchanged for the week, settling at 15.08¢


World Cup Trading Championships®

In the 2021 World Cup Trading Championships® Futures division, Weichou Chen finished in 1st with a 68.6% net return. Princely Mathew took 2nd with a net return of 44.4%. Daniel Grymyr took 3rd with a net return of 33.1%. Stefan Seibert and Donald Weijland rounded out the top 5 with net returns of 31.4% and 20.2% respectively.

In the 2021 World Cup Trading Championships® Forex division, Michael Frank finished in 1st with a 45.7% net return. Raul Glavan took 2nd with a 22.7% net return, followed by Michele Di Gregorio taking 3rd with a net return of 15.2%.  Michel Campanale and Patrick Nill rounded out the top 5 with net returns of 13.3% and 13% respectively.

In the futures division of the 2020-2021 Global Cup Trading Championship, Stefan Seibert finished the week in 1st with a net return of 178.7%. Jan Smolen finished the week in 2nd with a 135.9% net return. 3rd place is currently held by M. Vontobel of Tirutrade AG with a net return of 79.7%. Adrian Koemel and Patrick Nill finished the week in 4th and 5th with 71.2% and 62.3% net returns respectively.

 

Trading futures and forex involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results. World Cup Championship (WCC ) accounts do not necessarily represent all the trading accounts controlled by a given competitor. WCC competitors may control accounts that produce results substantially different than the results achieved in their WCC accounts. WCC entrants may trade more than one account in the competition. CME Group is the trademark of CME Group, Inc. The Globe logo is a trademark of Chicago Mercantile Exchange, Inc.

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