Weekly Market Recap – June 10, 2022

In a move to mitigate soaring inflation, the European Central bank will raise interest rates in July. The quarter-percentage-point increase will be ECB’s first rate increase since 2011. The U.S. is ending COVID-19 testing requirements for air travelers entering the country, starting on Sunday.

The U.S. Department of Commerce reported that the foreign trade deficit in April was -$87.1 billion, a significant drop from the -$107.7 billion in March, one of three record deficit months in a row. Other monthly economic statistics compared with prior levels, were as follows: consumer credit $38 billion vs. $47 billion, wholesale inventories (revision) +2.2% vs. +2.1%, CPI +1.0% vs. +0.3%, core CPI +0.6% vs. +0.6% (unchanged), CPI year-over-year +8.6% vs.+8.3%, consumer sentiment index 50.2 vs. 58.4 and May’s Federal budget was -$66 billion vs. the April deficit of -$132 billion. Quarterly reports released showed that real household net worth fell 7.9% in Q1, compared with Q4’s 7.2% rise, and real domestic nonfinancial debt rose 3.4% vs. the previous quarter’s 1.9% increase. Regarding weekly stats, there were 229,000 initial jobless claims vs. 202,000 the week before. Continuing unemployment claims were unchanged at 1.31 million.

Stock markets reeled from Friday morning’s CPI number; the 8.6% increase was the highest year-over-year inflation jump since1981. The Dow Jones Industrial Average closed at 31,392.79 (-4.6%) the S&P 500 gave back 5.1% to close at 3,900.86 and the NASDAQ Composite went out at 11,340.02 (-5.6%). CBOE’s VIX settled at 27.75 (+11.9%). In currencies, USD Index futures closed the week at 104.151 (+1.9%). The commodity sector eased slightly as a whole, as per S&P’s GSCI: the portfolio of futures fell to 804.80 (-0.4%).

The six metal futures we track in this recap moved lower for most of the week; only gold and silver showed a blip to the upside on Friday. The final prices and corresponding positive/negative movements were: gold at $1,875.50 (+1.4%), silver at $21.931 (+0.1%), platinum at $971.00 (-4.5%), palladium at $1,907.00 (-4.0%), copper at $4.2945 (-4.0%), and aluminum at $2,680.00 per metric ton (-1.7%).

AAA reported on Saturday that the average national at-the-pump gasoline price exceeded $5.00 for the first time. The wholesale gas price we report here (Reformulated Blend, or “R Bob”) actually dropped for the week, ending at $4.1722 per gallon, which was down 1.9%. The previous week had seen new contract highs for RB, which takes a few days to get transported from refineries to terminals, then onto trucks and delivered to filling stations. The other energy contracts we monitor in our recap were mostly higher, except for Dutch gas. Friday settlements and weekly percentage movements were: NYMEX WTI at $120.67 per barrel (+1.5%), Brent crude at $122.01 (+1.9%), heating oil at $4.3667 per gallon (+2.0%), NYMEX natural gas at $8.850 per MMBtu (+3.8%), and ICE TTF Dutch gas eased to €82.464 per MWh (-0.8%).

Of the nine agricultural futures we track, five increased and four decreased Those that went into the red were: coffee at $2.2890 (-1.5%), sugar at 18.87¢ (-2.2%), cocoa at $2,385 (-3.4%) and lean hogs at 103.750 (-4.0%). The gainers were: soybeans at $17.45½ (+2.8%), corn at $7.73¼ (+6.4%), wheat at $10.70¾ (+3.0%), cotton at 145.06¢ (+5.0%), and live cattle at 136.200 (+1.8%).

Futures Referenced in Market Recap

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