Weekly Market Recap – May 29, 2020
In the Markets
Restrictions have been easing in major US cities, and businesses are coming back, though worldwide coronavirus cases hit 6 million. On Thursday, the labor department reported 2.1 new jobless claims; one in every four American workers, more than 40 million, have filed for unemployment since the middle of March. Commenting on economic stimulus efforts during the pandemic, Fed chairman Jerome H. Powell said, “We crossed a lot of red lines, that had not been crossed before.”
The DJIA rose 3.8% this past week, a gain of 917.95 to close at 25,383.11 points. The Dow’s move for the month was 7.0%. The S&P 500 improved by 7.5% in May, with the lion’s share of the increase (3.0%) booked for the week, an up move of 88.86 that closed the index at 3,044.31 on Friday. This was the S&P’s first weekly close over 3,000 since February 21st (3,337.75). NASDAQ’s Composite Index went up only slightly (1.8%) to 9,489.87 for the week, adding 165.28 points. Its May gain was 10.3%. 10.8% was the Russell 2000’s May increase, with 3.0% of it added in the week after a 3.25 advance left the index to settle at 111.83 on Friday. Market volatility continues to behave more like the “old normal” in terms of the CBOE VIX, ending the week at 27.51, the lowest Friday close since February 28th. The U.S. Dollar Index, which has been in a holding pattern for nearly three months, finally poked through the floor of its sideways meandering on the chart. Friday’s 98.29 settlement of this trade-weighted index was the currency basket’s lowest close since March 6th.
Silver, hitting a three-month high, has been outshining the others in the precious metal futures category, with a 19.8% rally for May. The July contract rose 81¢ last week to close at $18.499 (+4.6% for the week), the first Friday closing over $18 in 14 weeks. Gold lagged silver in the May run up showing a rise of merely 1.6%. The yellow metal’s Friday settlement for June was $1,736.90 after a $1.40 blip (+0.1%). Platinum and palladium futures both retreated: to $874.60 for the former and $1,972.90 for the latter. Their decreases were $11.70 (-1.3%) and $2.90 (-0.1%), respectively. Base metals that we track in this recap were treading water on either side of unchanged. Comex copper went out at $2.35/lb. (-1.5%), while LME aluminum closed the week 1.1% higher to close at $1,523 per metric ton.
WTI crude climbed 6.7%, continuing its rally to a 2-1/2 month high on a weaker dollar and a reduction in the U.S. rig count. The July crude had a $2.24 up move to $35.49 per barrel. Over on the ICE, July Brent only budged 20¢ to settle at $35.33 (+0.6%), just 16¢ below WTI’s settlement. RBOB’s premium over ULSD widened further during the week: July gasoline gained 109 ticks (+1.1%) versus heating oil’s 267-tick increase (+2.5%). The respective July settlements were 1.0307 and 1.0785 as the spread ended the week at 4.78¢ compared to last week’s difference of 3.20¢ per gallon. July natural gas made new contract lows on Friday, touching 1.763 before rallying on short covering to settle at 1.849: down 1.7% for the week, down 11.6% for the month and down 19.7% year-to-date.
The big three in the agricultural markets moved higher last week. Soybeans added 7 1/2¢ (0.9%) to go out at 840 3/4¢, corn had a 7 3/4¢ advance (+2.4%) to 325 3/4¢ and wheat improved 12¢ (+2.4%) to close at 520 3/4¢ per bushel. CME cattle firmed 2.02 (+2.1%) to 99.725 as hog futures retreated 1.92 (-3.3%) with a 56.850 close. Dairy traders kept the buying pressure on the price of milk, which gained 1.24 (+7.5%); the 17.66 close was the highest since February 18th.
In the ICE softs, sugar closed at 10.91 (+0.2%), cocoa settled 2.5% higher at 2454 and cotton was practically unchanged for the week, adding only 2 points, taking it to 57.59 at Friday’s close. An arbitrage trade between the exchange’s two coffee markets has been gaining attention. The ICE US coffee, Arabica, is down 28.1% for the year, while the Robusta coffee, traded on ICE Europe, has declined 17.6% during the same time period. Usually, the difference between the two is largely driven by weather-based crop fundamentals affecting planting, growing and harvest. The pandemic has injected new factors for each side of the spread. Arabica July futures made new contract lows on Friday, closing below $1.00 per pound at 96.30 points (-7.0% for the week). Robusta closed at $1,169 per metric ton (-3.1% for the week). Robusta has been rallying from its contract low of six weeks ago (April 22nd.).
World Cup Trading Championships®
In Futures, Michael O’Keeffe has held the top position, based on the end of week standings, for the 8th week in a row with a 890.8% net return. Yuwen Cao remained in 2nd with a net return of 298.4%. Fernando Pineiro moved up 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% net. Nicholas Ridley is in 3rd with a net return of 78.3%. Adrian Koemel and Scott Welsh rounded out the top 5 with net returns of 54.4% and 54.1% respectively.
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