Weekly Market Recap – June 5, 2020

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Weekly Market Recap – June 5, 2020

In the Markets

On Thursday, the European Central Bank boosted its Pandemic Emergency Purchase Program by €600 billion ($676 billion). This additional bond-buying stimulus brings the total to €1.35 trillion ($1.53 trillion), and the plan is being extended to June 2121. The euro soared to $1.135 on the news, a level that currency traders hadn’t seen since early March. Likewise, the Dollar Index, already in a downtrend for eight consecutive days, closed for the week at 96.95, descending closer to its bottom at 95.39 that was on March 9th. Stateside, the highlighted economic news of the week was centered on the labor department’s employment statistics: 2.5 million non-farm jobs returned in May. Wall Street expectations had averaged an 8.3 million decline. The 13.3% unemployment level was not as bad as the 19.5% expected, which triggered more bullishness for equities investors. Economists had also missed the mark for the Fed’s consumer credit numbers released on Friday. Borrowing declined in April by $68.8 billion. The analysts’ average estimate had been a $14 billion drop. The implication is that households continue to fret about the economic downturn resulting from the coronavirus pandemic.

At Friday’s opening bell, the DJIA index gapped up, and then traded with steady strength all day. The benchmark closed at 27,110.98 (+1,727.87) racking up a 6.8% rally for the week. It was the Dow’s highest close in fourteen weeks. The S&P 500 had a 4.9% jump for the weekly gain, ending at 3,193.93 (+149.62). Of the four stock indices covered in our recap, the NASDAQ Composite is the only one that is up for the year, so far. That year-to-date 9.4% increase was a direct result of the week’s shot of adrenalin. Adding 324.21 points, the composite had a +3.4% up move to 9,814.08 at Friday’s close. Rounding it out, the Russell 2000 booked an 8.1% increase of 9.03 points to its 120.86 final print. CBOE’s Volatility Index also showed a possible return to the no-fear zone. Ending the week at 24.52, the VIX had its lowest close since February 21st (17.08).

Metals marked the week going opposite ways as the precious sector retreated and the industrials advance. Gold futures lost $60.70 (-3.5%) with the front-month easing to $1,676.20 per troy ounce. July silver fell $1.02 (-5.5%) with its $17.479 settlement price. Platinum and palladium, both declined, but not in tandem percentages. Platinum declined $44.20 (-5.1%) to its $830.40 close, while palladium fell the least, perhaps due to its industrial usefulness; it ended the week at $1,952.60 (-1.0%) with a loss of $20.30 in the September contract. Copper surged 21 cents (+8.7%) to close at $2.5555 per pound, its highest since March 5th. LME aluminum had a good showing, as well. The 3-month price gained 68.5 dollars per ton, ending at $1,591.50 (+4.5%).

As talk of oil production cuts resumed, and tropical storm Cristobal loomed on the weather maps, WTI crude showed muscle, followed by Brent, each capping the week with similar gap-filling footprints on the charts. July crude settled at $39.55 per barrel with a $4.06 rally (+11.4%). August Brent crude’s 11.8% weekly gain was due

to a $4.46 rise to $42.30 per barrel. For both, Friday’s settlements were the highest since March 6th, just before the Russia-Saudi Arabia price war kicked in. Refined products followed suit as ULSD fuel rallied to $1.1506 with a 12 cent gain (+11.6%) and RBOB gasoline shot up 12.5% on a 13.5 cent move to $1.2136 per gallon at the close. Natural gas lost seven cents (-3.6%) last week, as it ended with a $1.782 close.

The weakening dollar is a significant factor in most agricultural commodity prices that are denominated in US dollars. In the case of futures, this means practically all of them. The CRB index has risen from 112.5 to 147.5 (+31.25%) since April 21st. Soybeans rose 27.0¢ last week (+3.2%) to close at $8.6775 per bushel. The July corn contract increased 5½¢ (+1.7%) to a $3.3125 settlement price. Wheat eased by 5½¢ (-1.1%) ending at $5.1525 for the week. In the ICE softs, the Europe vs. US coffee arbitrage kept widening as Robusta increased by 5.5%, while Arabica added only 2.7%, settling at $1,233 per metric ton and $98.90 per pound, respectively. Sugar jumped 10.2%, gaining 1.11¢ to close at 12.02 ¢/pound, its highest in three months. Cocoa had a slight decrease, ending Friday’s session at 2,398 (-2.3%) losing 56 points. Cotton rallied 4.20 (+7.3%) to 61.79 in the July contract. FCOJ settled at 127.55 after firming 5.05 (+4.1%). Milk added 99 points (+5.6), closing at 18.67 for the week. Meats retreated with hogs outpacing cattle. June hogs dropped 16.5% (-9.40 points) to a 47.450 close, while cattle ended at 93.900 in the Junes, with a 5.82 decline (-5.8%).

World Cup Trading Championships®

In Futures, Michael O’Keeffe has held the top position, based on the end of week standings, for the 9th week in a row with a 1,003.7% net return. Tim Hall took the 2nd spot with a net return of 279.5%. Yuwen Cao moved down to 3rd with a net return of 263.8%. Stefan Seibert and Orhan Özcan rounded out the top 5 with net returns of 191.2% and 176.7% respectively.

In the Forex division, Nicholas Ridley moved up to first at 153.1% with Raul Glavan finishing the week in 2nd with a net return of 112.6%, followed by Scott Welsh at 63.3% net. Adrian Koemel and Jan Smolen rounded out the top 5 with net returns of 54.4% and 43.4% respectively.

(Through May 29 – Final Results Pending Audit) The Top 5 Global Cup Finalists are Stefan Seibert in 1st at 210.7% net, Michael Cook in 2nd at 171.7% net, Maxim Schulz in 3rd at 156.2%, Robert Miner in 4th at 134.4%, and Wayne Wan in 5th at 113.2% net.

 

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