Weekly Market Recap – May 15, 2020
In the Markets
Stock market investors pushed the indices lower this past week, due to a combination of pandemic news, a rekindled US-China trade war campaign and more negative economic data. Retail sales plunged 16.4% in April (worse than the expected 12% setback), registering the largest drop since the reporting of the data series began in 1992. This was the second month in a row of record declines. Industrial production posted a steep drop for April, down 11.2% from the previous month, the greatest decline since 1919. Weekly unemployment claims numbered 2.98 million. Market participants are re-calibrating their concerns about a second wave of COVID-19 as more states prepare to re-open and a $3 billion rescue bill passed in the House for another proposed round of stimulus.
The DJIA retreated 645.90 (-2.7%), closing at 23,685.42 on Friday. The S&P 500 gave back 66.10 points, ending at 2.863.70 (-2.3%), and the Russell 2000 marked a 5.4% drop, down 5.72 for the week to 100.85 at the close. Of the indices we include in this recap, the NASDAQ Composite is the only one that is up on a year-to-date basis (+0.5%), possibly due to its tech-heavy focus. For the past two weeks, it has been trading higher than its 12/31/2019 close. This week, the index lost only 106.76 points (-1.2%) ending at 9,014.56 on Friday.
The safe-haven seekers have returned to the precious metals as investors in China, and elsewhere, emboldened by weak economic data and more quantitative easing, have ramped up their bullion acquisitions. Front-month futures for gold, silver, platinum and palladium were all boosted by a similar wave: gold rose by $42.40 (+2.5%) to $1.756.30, silver increased by $17.07 (+8.2%), platinum gained $27.80 (+3.5%) to $817.10 and palladium firmed by $36.80 (+2.0%) to $1,857.90 per troy ounce. Base metals eased, as CME copper lost 7.55¢ (-3.1%) settling at $2.3305 per pound. LME aluminum ended the week at $1,462/ton, a decline of $23 (-1.5%).
WTI crude hit a six-week high, as futures rose 19.0% for the week, a $4.69 move to $29.43 per barrel. Brent futures closed at $32.50 for a one month high, up $1.53 (+4.9%) for the week. The strength was driven by OPEC export cuts of nearly 6 million barrels per day and stronger demand from China. Refined products also rose, as heating oil increased 152 points (+1.6%) to 0.9548, and gasoline gained 209 points (+2.2%) to 0.9838 at Friday’s close. Natural gas fell 9.7% as the cold forecasts faded into more of a seasonally normal spring temperature outlook in the gas-consuming regions. June futures ended the week at $1.646, down 177 ticks.
Wheat for July delivery lost 21¾¢ (-4.2%), closing at $5.00½ per bushel, while soybeans closed at $8.38½, down 12¢ (1.4%). Corn quietly moved sideways and remained unchanged, settling at $3.19¼ on Friday. Cocoa, nearly unchanged, settled at $2,399 in the July contract, slipping only $1/ton; while sugar squeaked out a 0.9% rise to 10.38¢ per pound. Coffee declined 4.3% (-4.8¢), closing at $1.0685 as this significant agricultural export of Brazil continues to be buffeted by a deflating currency, COVID-19 repercussions and related political turmoil. Although the pandemic stresses throughout the livestock and meatpacking industries, as well as in the food retailing businesses, have not improved, cattle and hogs seem to have parted ways, direction-wise: June live cattle futures increased 2.35¢ (+2.5%) to 97.000¢, while June hogs retreated 3.83¢ (-6.2%) to a closing price of 57.875¢ per pound.
The USDA began deploying the Farmers to Families Food Box Program, a $3 billion package aimed at fixing the crippled supply chain by re-routing it from family farms directly to communities in need. The program concentrates on fruits, vegetables, chicken, pork, and dairy products. CME milk futures moved sharply higher by 2.22¢, to close the week at 16.82¢ from the 14.4% rally.
World Cup Trading Championships®
In Futures, Michael O’Keeffe has held the top position, based on the end of week standings, the 6th week in a row with an 848.6% net return. A. Masters climbed to 2nd with a return of 295%. Yuwen Cao pushed up to 3rd with a net return of 283.8%. Fernando Pineiro and Tim Hall rounded out the top 5 with net returns of 251.7% and 213.5% respectively.
In the Global Cup, Stefan Seibert climbed to the top with a net return of 207.8%, pushing Michael Cook down to 2nd with his 192.7% net return. Robert Miner moved up to 3rd at 161.1% with Maxim Schulz and Wayne Wan rounding out the top 5 with net returns of 137.1% and 86.6% respectively.
In the Forex division of the World Cup Trading Championships®, Raul Glavan finished the week holding onto first place with a net return of 95.7%, followed by Nicholas Ridley at 64.8% net. Adrian Koemel joined the leaderboard at 54.4% net, with WenChen Zhang and Scott Welsh rounding out the top 5 with net returns of 47.3% and 46.3% respectively.
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