Weekly Market Recap – March 24, 2023
After their Moscow summit, Vladimir Putin and Xi Jinping proclaimed economic cooperation, in what appears to be a strategy to secure their respective countries from Western sanctions and other consequences of the Russian invasion of Ukraine. The undercurrent of banking turmoil remained in the news. In order to address the public panic, UBS quickly completed its $3.2 billion acquisition of Credit Suisse. Both the Federal Reserve and the Bank of England raised interest rates by a quarter point, as they are still concerned about inflation. President Macron pushed through legislation to raise France’s retirement age from 62 to 64; throughout the week the nation continued to endure protests and strikes.
Monthly economic statistics compared with previous measures were: existing home sales 4.58 million vs. 4.00 million, new home sales 640,000 vs. 633,000, and durable goods -1.0% vs. -5.0%. Regarding weekly stats, there were 191,000 initial jobless claims vs. 192,000 the week before, and continuing unemployment claims were 1.69 million vs. 1.68 million. On a quarterly basis, the Q1 US current account deficit was -$206.8 billion vs. -$219.0 billion in Q4.
Following the ongoing uncertainty in the banking sector and central bank responses with regard to interest rates, stock market activity showed more stability than it had in recent weeks. The Dow Jones Industrial Average closed at 32,237.53 (+1.2%), the S&P 500 rose 1.4%, settling at 3,970.99, and the NASDAQ Composite went out at 11,823.96 (+1.7%). The steadier stock trading cooled CBOE’s VIX, which retreated 14.8% to 21.74 at the week’s end. In the currency markets, USD Index futures inched down to 102.764 (-0.6%). The commodity sector rose, as reflected in S&P’s GSCI; the portfolio of futures closed at 549.37 (+1.4%) on Friday.
Strength persisted across the board for the futures on our metals list. Closing prices and percentage increases were as follows: gold at $1,983.80 (+0.5%), silver at $23.339 (+3.9%), platinum at $983.90 (+0.5%), palladium at $1,414.40 (+2.0%), copper at $4.0750 (+4.7%) and aluminum at $2,337.00 (+2.8%).
Divergence was evident as energy commodity subcategories moved in opposite directions; the petroleum sector rose and the methane sector fell. Closing prices and their respective movements were as follows: WTI crude at $69.26 per barrel (+3.5%), Brent crude at $74.99 (+2.8%), heating oil at $2.6952 per gallon (+0.6%), and RBOB gasoline at $2.5885 (+3.5%), NYMEX natural gas at $2.216 per MMBtu (-5.2%) and ICE TTF Dutch gas at €41.094 per MWh (-4.1%). Looking back at the charts, the last time global natural gas prices last saw such lows was before Russia invaded Ukraine.
Of the nine agricultural futures prices on our watch list, four rose and five sold off. The gainers were: corn at $6.43 (+1.4%), coffee at $1.7925 per pound (+1.5%), sugar at 20.82¢ (+0.7%), and cocoa at $2,884 (+1.3%). Soybeans fell into the red, ending at $14.28¼ (-3.3%), along with wheat at $6.88½ (-3.1%), cotton at 76.54¢ (-0.4%), cattle at 163.000 (-1.2%) and lean hogs at 77.175 (-8.7%).
Futures Referenced in Market Recap
Exchange | Commodity | Contract Month |
---|---|---|
CME | Live Cattle | April |
CME | Lean Hogs | April |
CBT | Soybeans | May |
CBT | Corn | May |
CBT | Wheat | May |
ICE | Coffee | May |
ICE | Cocoa | May |
ICE | Sugar | May |
ICE | Cotton | May |
ICE | Brent Crude | May |
ICE | Dutch TTF Gas | April |
ICE | USD Index | June |
NYMEX | WTI Crude | May |
NYMEX | ULSD (Heating Oil) | April |
NYMEX | RBOB (Gasoline) | April |
NYMEX | Natural Gas | April |
NYMEX | Platinum | April |
NYMEX | Palladium | June |
COMEX | Gold | April |
COMEX | Silver | May |
COMEX | Copper | May |
LME | Aluminum | 3 Mo. Forward |
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