Weekly Market Recap – May 22, 2020

In the Markets

With 2.4 million new unemployment claims this week, bringing the total to 38.6 million since mid-March, this gauge of joblessness would look like a flattening curve on a graph. This aspect of the data contributed to investor confidence in the stock market. Another positive impetus for market participants was the news of progress in coronavirus vaccine development. Equities investors seem encouraged as the four indices we cover here are showing incremental increases. The DJIA booked a 3.3% rise of 779.74 points to close at 24,465.16 for the week. The S&P 500 added 91.75 points to end the week at 2,955.45 (+3.2%). An up move of 310.03 points to 9,324.59 for the NASDAQ Composite amounted to a 3.4% weekly gain. The percentage leader of the pack was the Russell 2000, adding 7.73 points (+7.7%) settling at 108.58 at the close. On Tuesday of this coming week, the closing bell will ring again, as the New York Stock Exchange reopens the trading floor after eight weeks of lockdown.

Although the precious metals generally nudged higher, the gold-to-silver ratio dipped back under 100 (to 1:98.1) for the first time since March 6th. Gold eased slightly, while the others in the group all firmed. June gold futures lost $20.80 last week, ending at $1,735.50 per ounce (-1.2%). Silver rose 62.3¢ (+3.6%) to $17.693 for the July contract. Platinum appreciated, adding $69.20 to close at $886.30 (+8.5%), and palladium’s $119.20 gain to $1,977.10 was a 6.4% improvement for the June futures.

Energy traders have had less volatility to manage thus far in May, as the global oil markets seem to be stabilizing again. The arbitrage premium of Brent crude over West Texas Intermediate is below $2 for the first time since the pandemic crisis began. Brent’s differential over WTI ended the week at a $1.88 premium; it had been a $4.35 spread at the end of February. The particulars for these legs are as follows: Brent closed the week at $35.13 compared to a settlement of $33.25 for WTI, and the weekly increases were $2.63 (+8.1%) and $3.73 (+12.6%), respectively. Another closely watched pair among energy traders is the “gas to heat” spread: the cents-per-gallon difference between RBOB gasoline and heating oil (aka ultra-low sulfur diesel). Back in late February, gasoline was 6 cents higher than heating oil. As the crude oil storage issue ballooned from the pandemic demand destruction, gasoline plunged to over 40 cents below heating oil. The relationship is now somewhat back to normal. July gasoline settled on Friday at $1.0518 versus $1.0198 for July heating oil, and the weekly gains for the two refined products were 6.8¢ (+6.9%) for the gasoline and 6.5¢ (+6.8%) for heating oil. The natural gas market is still in pre-cooling season mode. A non-weather fundamental concern is how attrition among non-profitable oil & gas drilling operations will re-shape the industry in North America. June natgas futures inched 8.5¢ higher (+5.2%) to a $1.731 close.

Agricultural commodity futures prices were quietly mixed across the board last week. July soybeans lost 5¼¢ to 8.33 ¼ (-0.6%), corn eased 1¼¢ to $3.18 (-0.4%) and wheat’s 8½¢ rally to $5.08¾ added 1.7% to the July contract. Coffee lost 3.0% with a 3.25¢ retreat to $1.036 per pound. Cocoa slipped $5 per ton, settling at $2,394 (-0.2%). Sugar’s week was one of subdued strength, staying above 10¢ again, yet far from the 15¢/lb. it traded in February. July futures closed at 10.93, up 0.55 (+5.3%). June cattle rose 0.700 (+0.7%) to 97.700, and the June hog contract firmed 1.5% to 58.770 from its 0.895 increase. Class III milk futures are enjoying a five-week rally off contract lows touched on April 22nd. July ended on Friday with a small loss from the previous week, down 0.38, at 16.44 (-2.3%).

World Cup Trading Championships®

In Futures, Michael O’Keeffe has held the top position, based on the end of week standings, for the 7th week in a row with an 890.8% net return. Yuwen Cao took 2nd with a return of 298.4%. Fernando Pineiro moved to 3rd with a net return of 276.1%. Tim Hall and Stefan Seibert rounded out the top 5 with net returns of 258.9% and 188.7% respectively.

In the Global Cup, Stefan Seibert held the top with a net return of 210.7%, with Michael Cook in 2nd with a 171.7% net return. Maxim Schulz moved up to 3rd at 156.2% with Robert Miner and Wayne Wan rounding out the top 5 with net returns of 134.4% and 113.2% respectively.

In the Forex division, Raul Glavan finished the week holding onto first place with a net return of 112.6%, followed by Michael Campanale at 100% and Nicholas Ridley at 78.3% net.  Adrian Koemel and Scott Welsh rounded out the top 5 with net returns of 54.4% and 54.1% respectively.

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