Weekly Market Recap – January 6, 2023

In the U.S. House of Representatives, it took fifteen ballots to secure Kevin McCarthy’s speakership, which dominated the news most of the week. There are new COVID concerns as health experts track the abrupt rise of XBB.1.5, the latest Omicron sub-variant. In northern California, torrential rains caused rivers and streams to overflow with cascades of water down streets and highways, submerging vehicles, homes, and businesses. Record wave heights were reported in the San Francisco Bay area. 180,000 utility customers lost power and twelve fatalities have been confirmed.

Monthly economic statistics, compared with prior values were as follows: international trade balance (deficit) -$61.5 billion vs. -$77.8 billion, motor vehicle sales 13.3 million vs. 14.2 million, factory orders -1.8% vs. +0.4%, construction spending +0.2% vs. -0.2%, job openings unchanged at 10.5 million, job quits 4.2 million vs. 4.0 million, nonfarm payrolls 223,000 vs. 256,000 and the unemployment rate was 3.5% vs. 3.6%. Weekly employment figures showed a drop in initial jobless claims to 204,000 from 223,000 while continuing claims fell to 1.69 million from 1.72 million. There were no significant quarterly statistics reported during the shortened week.

In the aftermath of the stock market’s Q4 losses, the first week of the New Year showed some composure by investors in the three indices we follow. The Dow Jones Industrial Average closed at 33,630.61 (+1.5%). The S&P 500 rose 1.4% to 3,895.08, and the NASDAQ Composite went out at 10,569.29 (+1.0%). Volatility in equities contracted 2.5% for the week, evidenced by CBOE’s VIX settling at 21.13 on Friday. In currencies, the trend of the USD Index managed to stabilize, with the futures closing at 103.646 (+0.4%). The portfolio of commodity futures contracts in the S&P GSCI ended the week at 573.29 (-6.0%).

In the metals market, we saw a mixed performance, Settlements and weekly percentage changes were: gold at $1,869.70 (+2.4%), silver at $23.982 (-0.2%), platinum at $1,104.30 (+2.0%), palladium at $1,806.70 (+0.5%), copper at $3.9110 (+2.6%) and aluminum at $2,295.50 (-3.5%).

All of the energy contracts on our radar tumbled lower. Here’s how they played out: WTI crude at $73.77 per barrel (-8.1%), Brent crude at $78.57 (-8.5%), heating oil at $3.0045 per gallon (-8.8%), RBOB gasoline at $2.2446 (-9.4%), NYMEX natural gas at $3.710 per MMBtu (-17.1%), and ICE TTF Dutch gas at €69.534 per MWh (-18.8%).

Of the nine agricultural futures that we monitor, two increased and seven decreased. The gainers were: cocoa at $2,605 (+0.2%) and cotton at 85.68¢ (+2.8%). Falling into the red, were: soybeans at $14.92½ (-2.1%), corn at $6.54 (-3.6%), wheat at $7.43½ (-6.1%), coffee at $1.5830 (-5.4%), sugar at 18.96¢ (-5.4%), live cattle at 156.775 (-0.7%) and lean hogs at 80.275 (-8.5%).

Futures Referenced in Market Recap

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