Weekly Market Recap – March 27, 2020

In the Markets

As the pandemic and the economy again dominated the headlines, the markets appeared less erratic and volatile than they had been since March roared in.

The DJIA spot index ended the week at 21,637, gaining 12.8%, and the S&P 500 closed on Friday at 236.55, a 10.3% rise. The NASDAQ Composite added 9.1% from the previous week climbing to 7502, while the Russell 2000 registered a final level at 90.71, up 11.4% for the week. Confirming that the volatility was cooling somewhat, CBOE’s VIX was slightly down, for a change, to 65.54, off only 0.8%.

Pricewise in the markets, no notable record levels were reached, nor were there any record moves in points or percentages. However, there were a couple of historic financial news items that drew attention. Thursday’s unemployment number showed that the United States Department of Labor had received 3.28 million applications for jobless benefits. The department has been tracking claims since 1967, and this week’s jobless stat didn’t merely pierce the old high, it quadrupled the past peak of 695,000 from October 1982. The all time record low was 162,000 claims in November 1968.

The back-and-forth, as Congress worked out the relief legislation, shifted the stock market into neutral gear for a few days. The stimulus passed in the Senate on Wednesday. At Thursday’s close, the DJIA had booked three straight up days in the week, prompting a Wall Street Journal headline: “Was that the shortest bear market ever, or a bull trap?“ On Friday afternoon, after the House signed the $2.2 trillion coronovirus cash infusion, another record was established: the largest government rescue package in US history.

It seems that the only trend in the news that is not pausing or correcting is the spreading coronavirus. Those statistics are still on an up-curve. On Thursday, the number of confirmed cases in the US surpassed those in Italy and China. The corollary metrics are the rising mortality figures and the dwindling reserves of certain medical supplies and equipment. The pandemic’s impact on commercial logistics has begun to complicate the transportation of physical goods, including the basic commodities traded on exchanges. Hence, the slower movement of both raw materials and finished goods is trickling into the equation of supply vs. demand. In commodity markets, the anecdotes range from gold investors not receiving their bullion deliveries on time, to slower shipping of global crop exports from various origins.

Precious metals rallied during the week, with gold futures rising $140, the April contract gaining 9.5% vs. May silver’s 17.5% increase as it rose by $2.15 per troy ounce. The April platinum moved up by $118 or 18.9%, and palladium, which had dropped 38.1% two weeks ago, soared 42.6% last week, ending $656 per ounce higher. Base metals were more stable, as copper futures had a 0% change and aluminum declined 3.6%.

Energy futures had less volatility with mixed directional results. WTI crude eased 4.9% and Brent crude dropped 7.6%. In refined products, heating oil firmed 6.2%, while RBOB gasoline settled 5.2% lower for the week. Henry Hub natural gas contracts for April managed to rise a minimal 1.9%.

In the agricultural markets, soybeans and corn rose 2.2% and 0.7%, respectively, while Chicago wheat for May delivery rallied 32 cents per bushel, a 5.9% increase. Coffee slipped 3.2%; cocoa gained 1.2% and sugar rose 1.7%. Rounding it out with livestock, cattle futures rose 2.3% and hogs eased 5.1%

World Cup Trading Championships®

A. Masters maintains the lead with a 1,351.2% net return, though the competition has closed in, with Michael O’Keeffe at a 910.9% net return. Yuwen Cao has some ground to gain to catch up, with a respectable 219.2% net return. Allen Swiontek and Hao-Ming Lien are holding strong on the leaderboard with net returns of 180.9% and 168.5% respectively.

In the Global Cup, Michael Cook held first place for yet another week with a 202.3% net return. Stefan Seibert regained 2nd with a net return of 177.8%, pushing Wayne Wan back to 3rd with a 138.9% net return. Following are Maxim Schulz at 132.8% net and Robert Miner at 123.8% net respectively.

In the Forex division of the World Cup Trading Championships®, Nicholas Ridley finished the week in first place with a net return of 126.3%, followed by Miguel Garcia at 84.3%. Andreas Plagge held onto third with a 66.5% net return. Fourth and fifth places were taken by Chien-Hung Chen at 53.6% and Wenchen Zhang at 41.5%.

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