Weekly Market Recap – March 18, 2022
As the humanitarian crisis in Ukraine worsens, Russian airstrikes occurred within 11 miles of Poland’s border, where NATO forces are stationed on high alert. A 7.4 magnitude earthquake struck off Japan’s coast near Fukushima on Wednesday night, affecting the eastern part of the country, including Tokyo. The Omicron sub-variant BA.2 is driving cases in the UK and Europe. Public health officials are concerned that this variant could cause another COVID-19 wave in the US.
The Federal Reserve raised the federal funds rate by one-quarter of a percentage point, its first increase since December 2018. Monthly economic statistics, compared with previous levels, were as follows: the producer price index +0.8% vs. +1.2%, retail sales +0.3% vs. +4.9%, business inventories +1.1% vs. +1.1%, housing starts 1.77 million vs. 1.66 million, building permits 1.86 million vs.1.80 million, existing home sales 6.02 million vs. 6.49 million, industrial production +0.6% vs. +1.4%, capacity utilization 77.6% vs. 77.3%, and the index of leading economic indicators +0.3% vs. -0.5%. Weekly initial jobless claims eased to 214,000 from 229,000 the prior week.
The three stock market indices we track in this report rallied throughout the week, closing at one-month highs. The Dow Jones Industrial Average gained 5.5%, going out at 34,754.93 on Friday. The S&P 500 advanced to 4,463.12 (+6.2%), and the NASDAQ Composite jumped to 13,893.84 (+8.2%). Volatility receded, according to the CBOE VIX, dropping to 23.87 points (-22.4%). In currencies, the USD index slipped to 98.23 (-0.9%). Physical commodity prices deflated a bit, as the S&P GSCI portfolio closed down to 725.61 at the week’s end (-2.1%).
Except for copper, the metal futures we follow went south. The copper rose to $4.7395 per lb. (+2.5%). For the other five, settlement prices and percentage losses were as follows: gold at $1,929.30 per Troy ounce (-2.8%), silver at $25.087 (-4.1%), platinum at $1,035.90 (-4.8%), palladium at $2,493.00 (-10.9%), and aluminum at $3,381 per metric ton (-2.9%).
Four of the six energy products in our recap lost ground, and two gained. The two crude oil benchmarks, WTI and Brent, each weakened by 4.2%; the former ended at $104.70, and the latter went out at $107.93 per barrel. Heating oil rose to $3.5981 per gallon (+5.3%), and RBOB gasoline slid down to $3.2388 (-2.2%). NYMEX natural gas regained 2.9%, closing at $4.863 per MMBtu, while ICE Dutch TTF gas had a hard fall to €105.044 per MwH (-20.0%).
The score was two higher and seven lower in the nine agricultural markets that we monitor. Friday settlement results were: soybeans at $16.68 per bushel; (-0.5%), corn at $7.41¾ (-2.7%), wheat at $10.63¾ (-3.9%), coffee at $2.2005 per pound (-0.9%), sugar at 18.93¢ (-1.6%), cocoa at $2,537 per ton (-3.2%), cotton at $126.86¢ (+4.8%), live cattle at 140.500 (+2.3%), and lean hogs at 99.400 (-3.2%).
Futures Referenced in Market Recap
|ICE||Dutch TTF Gas||April|
|NYMEX||ULSD (Heating Oil)||April|
|LME||Aluminum||3 Mo. Forward|
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