Weekly Market Recap – May 27, 2022
Tuesday was the three-month mark since Russia invaded Ukraine. As the week came to a close, the White House reported that Russia is expected to default on its debt. The due date for Moscow’s $100 million bond payment was Friday.
All eyes were on the inflation indicators on Friday morning as the Fed’s two favorite yardsticks showed that year-over-year PCE inflation for April was up 6.3%, compared with March’s +6.6% level, and core PCE inflation came in for April at +4.9% vs. +5.2%. Other monthly statistics released during the week, compared to prior numbers, were: durable goods +0.4% vs. +0.6%, pending home sales -3.9% vs. -1.6%, nominal personal income +0.4% vs. +0.5%, and nominal consumer spending +0.9% vs. +1.4%. The deficit for the balance of trade in goods was -$105.9 billion vs. -$125.9 billion. Weekly initial unemployment claims fell to 210,000 from 218,000, while the continuing claims rose to 1.35 million from 1.32 million. Regarding the quarterlies, the gross domestic product revision for Q1 was -1.5% vs. Q4’s -1.4% GDP. The Q1 real gross domestic income was +2.1% vs. +6.3% in Q4.
Wall Street breathed a sigh of relief due to inflation numbers being better than anticipated. Stock markets rebounded for the week as investor fears lessened a bit. The weekly jump to 33,212.96 for the Dow Jones Industrial Average was a 6.2% increase from the previous Friday. The S&P 500 went out at 4,158.24 (+6.6%), and the NASDAQ Composite ended at 12,131.13 (+6.8%). The CBOE VIX fell 12.6% to 25.72. In currencies, USD index futures closed at 101.698 (-1.4%). The commodity sector advanced, evidenced by the S&P GSCI gaining 3.5% for the week, finishing at 792.74 on Friday.
The metals futures contracts we monitor were mostly stronger. Settlements and weekly percentage changes were: gold at $1,851.30 (+0.5%), silver at $22.096 (+1.9%), platinum at $943.00 (+0.2%), palladium at $2,044.70 (+5.4%), copper at $4.3065 (+0.7%) and aluminum at $2,871.50 (-2.5%).
Energies rallied across the board. Crude boosted its per barrel price in both benchmarks: WTI closed at $115.07 (+4.3%) and Brent leaped to $119.43 (+6.1%). Refined products followed in kind, with heating oil settling at $3.9053 (+7.8%) and RBOB gasoline at $3.9119 per gallon (+6.0%). Natural gas soared again, going out at $8.727 per MMBtu (+6.7%) and ICE TTF Dutch Gas closed at €91.620 (+1.4%).
Markets were mixed for the Ag contracts we monitor; the score was 5 up and 4 down. End-of-week results were: soybeans at $17.32¼ (+1.6%), corn at $7.77¼ (-0.2%), wheat at $11.57½ (-1.0%), coffee at $2.2945 (+6.3%), sugar at 19.61¢ (-1.7%), cocoa at $2,462 (+1.4%), cotton at $139.42¢ (-2.0%), live cattle at 132.175 (+0.5%), and lean hogs at 110.400 (+1.4%).
Futures Referenced in Market Recap
|ICE||Dutch TTF Gas||July|
|NYMEX||ULSD (Heating Oil)||July|
|LME||Aluminum||3 Mo. Forward|
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