Weekly Market Recap – June 3, 2022

An OPEC Plus announcement on Thursday that the organization will increase crude oil production delivered a surprise: the volume of the increase was more than analysts had anticipated. Starting in July, the net rise in output by member countries will be 648,000 barrels per day. The additional barrels amount to 50% more than the production plan issued last year. However, energy market activity didn’t show an immediate price change, in fact, the nearby futures traded higher. The only visible market reaction after the announcement was that crude oil’s forward price curve moved to slightly lower numbers starting in February. Earlier in the week, JPMorgan CEO Jamie Dimon told investors to prepare for an “economic hurricane” in the near future, citing interest rate hikes and the Russian invasion of Ukraine as catalysts for the upheaval he foresees.

Monthly economic statistics, compared with prior numbers were: The S&P Case-Shiller home price index came in at 20.6% higher than a year ago vs. last month’s 20.0%, construction spending +0.2% vs. +0.3%, consumer confidence index 106.4 vs. 108.6, the Chicago purchasing managers index 60.3 vs. 56.4, new job openings 11.4 million vs. 11.5 million, job resignations were unchanged at 4.4 million, nonfarm payrolls 390,000 vs. 436,000 and the unemployment rate was unchanged at 3.6%. Weekly initial jobless claims fell to 200,000 vs. 211,000 the previous week, and continuous unemployment claims were 1.31 million vs. 1.34 million.

Stock market indices eased slightly as the DJIA closed at 32,899.70 (-0.9%), the S&P 500 slipped 1.2%, settling at 4,108.54 and the NASDAQ Composite went out at 12,012.73 (-1.0%). CBOE’s VIX declined a bit to 24.79 (-3.6%). In currencies, USD Index futures inched up to 102.160 with a 0.5% increase. S&P’s GSCI gained 2.0%; the portfolio of commodity contracts closed at 808.29 on Friday.

Of the metal contracts we track, the results were mixed for the week. Closing prices and percentage changes were as follows: gold at $1,850.20 (-0.4%), silver at $21.908 (-0.9%), platinum at $1,016.40 (+7.8%), palladium at $1,985.90 (-3.4%), copper at $4.4720 (+3.8%), and aluminum at $2,726.00 (-5.1%). Readers should note that aluminum’s weekly close this week was on Wednesday (June 1), because the London Metal Exchange observed the four-day Platinum Jubilee of Queen Elizabeth II.

On the energy charts, the petroleum sector futures we report here continued making new contract highs, while the natural gas segment weakened. For the week, NYMEX WTI rose to $118.87 per barrel (+3.3%). Brent crude rallied to $119.72 (+3.6%). Heating oil jumped 9.6%, closing the week at $4.2803; RBOB gasoline followed suit, adding 8.7%, to settle at $4.2522 per gallon. U.S. Henry Hub natgas moved 2.3% lower to $8.523 per mmBtu, while Dutch TTF gas plunged 9.3% to €83.101 per MwH.

In the agricultural futures markets we monitor, the pendulum swing was on the bearish side for the group (3 moved higher vs. 6 lower). The contracts that lost value were: soybeans at $16.97¾ (-2.0%), corn at $7.27 (-6.5%), wheat at $10.40 (-10.2%), sugar at 19.29¢ (-1.6%), cotton at 138.18¢ (-0.9%), and lean hogs at 108.050 (-2.2%). The gainers were: coffee at $2.3240 (+1.3%), cocoa at $2,469 (+0.3%), and live cattle at 133.850 (+1.1%).

Futures Referenced in Market Recap

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