Weekly Market Recap – May 13, 2022
On Thursday, Finland pledged to join NATO, a move prompted by Russia’s February invasion of Ukraine. In a 368 to 57 vote, the House passed a bill to provide Ukraine an additional $40 billion in military and humanitarian aid; it now awaits a vote in the Senate. Bitcoin plunged to its lowest price since December 2020. During the week, the unregulated global cryptocurrency market saw $300 billion wiped out.
Monthly economic statistics showed the consumer price index rising 0.3% vs. the prior month’s 1.2% increase. However, on a year-over-year basis, CPI was up 8.3% vs. 8.6%. The market interpreted this figure as more inflationary than expected; analysts on the street were calling for an 8.1% rise. The producer price index was +0.5% vs. +1.6%. Regarding the federal budget figure for April, there was a surprising surplus of $308 billion, compared with the March deficit of -$226 billion. The surge was due to a jump in tax revenue that surpassed Wall Street expectations. Q1 household debt showed a 0.0% change, as compared to the Q4 increase of 2.5%. Weekly stats in the employment category showed new jobless claims at 203,000 vs. 202,000, while the continuous claims were 1.34 million vs. 1.39 million the previous week.
As investors continued to exert selling pressure on stock markets, the indices we track traded at their lowest levels of the year. The Dow Jones Industrial Average closed at 32,196.66, down 2.1% for the week (-11.4% year-to-date). The S&P 500 gave back 2.4% to close at 4,023.89 (-15.6% year-to-date), and the NASDAQ Composite ended the week down 2.8% at 11,805.00 (-24.5% year-to-date). CBOE’s VIX settled at 28.87 (-4.4%). In currencies, USD Index futures maintained the uptrend, closing the week at 104.621 (+0.9%), a rise of 9.4% for 2022, its highest level in nearly 20 years (December 2002). The commodity futures sector, as measured by the S&P GSCI, fell to 759.68 (-1.3%). This index is one of several proxies for inflation: its year-to-date change is +35.4%.
Weakness persisted on the metals futures charts for both the precious and industrial categories. On an end-of-week basis, settlement prices and percentage movements were as follows: gold at $1,808.20 (-4.0%), silver at $21.001 (-6.1%), platinum at $930.70 (-2.6%), palladium at $1,917.70 (-5.2%), copper at $4.1750 (-2.2%) and aluminum at $2,788.00 (-1.9%).
At the pump, the average nationwide retail price for a gallon of gas hit $4.37 on Tuesday, the highest reported by AAA since it started keeping track in 2000. However, commodity futures prices trade at the wholesale level, and the energy sector results for the week were mixed: NYMEX WTI at $110.49 per barrel (+0.7%), ICE Brent at $111.55 (-0.7%), heating oil at $3.9212 per gallon (-0.8%), RBOB gasoline at $3.9578 (+5.3%), NYMEX natural gas at $7.663 per MMBtu (-4.7%), and ICE Dutch gas plunged to €96.881 per MWh (-4.7%,).
Of the nine agricultural contract prices we report, four retreated and five advanced. Those in the red were: corn at $7.81¼ (-0.4%), cocoa at $2,469 (-0.9%), live cattle at 132.075 (-0.5%), and lean hogs at 100.750 (-3.2%). The gainers were: soybeans at $16.46½ (+1.5%), wheat at $11.77½ (+6.2%), coffee at $2.1390 (+1.6%), sugar at 19.17¢ (+0.1%), and cotton at 145.20¢ (+1.1%).
Futures Referenced in Market Recap
|ICE||Dutch TTF Gas||June|
|NYMEX||ULSD (Heating Oil)||June|
|LME||Aluminum||3 Mo. Forward|
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