Weekly Market Recap – January 8, 2021
In the Markets
The December non-farm payroll figure came in as a drop of 140,000 vs. November’s 336,000 increase, despite analysts’ average expectation of +50,000. Initial jobless claims were practically unchanged, amounting to 787,000 vs. 790,000 in the previous week’s report; Wall Street analysts had expected an average of 815,000. As a monthly percentage, the unemployment rate in December was 6.7%, unchanged from the November report. The November balance of trade level showed that the deficit grew by $5 billion, as the net came in at -$68.1 billion, compared to -$63.1 billion for October. Construction spending for November was reported to have risen by 0.9% (vs. October’s +1.6%). November factory orders rose 1.0% (vs. +1.3% for October).
More than 370,000 coronavirus deaths have been reported nationwide. On Thursday, the one-day US death toll surpassed 4,000 for the first time. A mutant strain of the coronavirus that has been spreading in UK has been detected in Colorado, California, Florida, Georgia and New York.
All four of the stock market benchmarks covered in our recap closed at record end-of-week highs. The DJIA gained 491.49 (+1.6%), settling at 31,097.97 on Friday; the 68.61 increase in the S&P 500 (+1.8%) took the index to a 3,824.68 close. NASDAQ’s Composite had a 313.70 up move (+2.4%) to its 13,201.98 final price. The Russell 2000 rose 9.39 points (+5.9%), settling at 167.66 at week’s end. According to the CBOE VIX, volatility in equities eased from the previous week’s 4.7% rally by receding 1.19 (-5.2%) and ended at 21.56 on Friday. In the currency market, the US Dollar Index stabilized with a corrective gain of 0.14 (+0.2%) to close at 90.06. In the basket of commodity markets defined in S&P’s GSCI, the index increased 18.10 points (+4.4%), finishing at 427.55, its highest closing value since January 14, 2020 (427.71).
The two major metals groups diverged in pricing, as the precious sector retreated while the industrials advanced. Silver was the weakest of the bullion markets, with March contracts sinking $1.775 (-6.7%), ending the week at $24.637 per ounce. April gold backed off $59.70 (-3.2%) with a final price of $1,835.40 at week’s end. March palladium lost $88.80 (-3.6%) to $2,365.00 and April platinum only slipped 0.7%, as it decreased $7.90 to $1,071.30/oz. The base metals we highlight in this recap both firmed; CME copper added 15.45¢ (+4.4%) settling at $3.6735 per pound and LME aluminum for three-month delivery ended the week at $2,021.50/ton, a gain of $42.00 (+2.1%).
Tightening crude supplies, related to Saudi Arabia’s additional production cuts announced early in the week, sending oil markets sharply higher. NYMEX WTI ended the week at $52.24 by rallying $3.72 (+7.7%), and ICE Brent shot up $4.19 (+8.1%) to settle at $55.99 per barrel. The strength took both markets to levels not seen since early February 2020. Refined products soared, as well; heating oil gained 9.50¢ to close at $1.5804 (+6.4%), while RBOB gasoline gained 12.51¢ (+8.8%), settling at $1.5405 (+8.8%). February natural gas futures have corrected 19% from the contract low established on 12/28/2020. The forecast through the end of January projects colder-than-normal temperatures for more than half of the US heating load areas, sending natgas 16.1¢ (+6.3%) higher on the week. Friday’s close was $2.700 per MMBtu.
Agricultural product price movements were mixed. The spotlight remained on soybeans, which hit new contract highs again. March beans went out at $13.75¾ after rising 64¾ ¢ (+4.9%). Corn settled at $4.96¼ per bushel, up 12¼¢ (+2.5%). Wheat for March delivery, with its $6.38¾ close, decreased 1¾ ¢ (-0.3%) for the week. Of the four ICE US softs we track here, two rose and two fell. Coffee moved 4.55 lower (-3.5%) to 123.70 at the close. March sugar inched up 0.11 to 15.60¢ (+0.7%). Cocoa lost $87 (-3.3%) for the week, closing at $2,516 per ton. March cotton increased 1.65¢ (+2.1%) to its 79.77¢ settlement price. Livestock retreated, as cattle futures pared off 0.550 (-0.5%) to a 114.475 close, while hogs ended at 68.700 for February, losing 1.575 (-2.2%).
World Cup Trading Championships®
In the futures division of the 2020-2021 Global Cup Trading Championship, Jan Smolen finished the week in 1st with a net return of 148.2%. M. Vontobel of Tirutrade AG finished the week in 2nd with a 145% net return. 3rd place is currently held by Stefan Seibert with a net return of 124.5%. Fernando C. Piñeiro and Adrian Koemel finished the week in 4th and 5th with 89.4% and 75.3% net returns respectively.
In the 2020 World Cup Trading Championships® Futures division, Stefan Seibert finished in 1st with a 342.3% net return. Brent Carlile took 2nd with a net return of 287.9%. Yuwen Cao took 3rd with a net return of 262.9%. Michael O’Keeffe and Evgeny Kartashov rounded out the top 5 with net returns of 249% and 165.8% respectively. (Final Pending Audit)
In the 2020 World Cup Trading Championships® Forex division, Jan Smolen finished in 1st with a 113.9% net return. Scott Welsh took 2nd with a 78.7% net return, followed by Sergey Shirko taking 3rd with a net return of 61.8%. Irwan Ariston and Oliver Bjoerklund rounded out the top 5 with net returns of 51% and 19.7% respectively. (Final Pending Audit)
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.