Weekly Market Recap – May 7, 2021
The week’s U.S. economic news was dominated by employment statistics. Despite the weekly drop in initial jobless claims to 498,000 (the lowest since the pandemic began), the overall measurement of job growth was less than analysts had expected. Nonfarm payrolls showed a 266,000 increase; Wall Street had predicted 1 million. The unexpected hiring pace was uneven: new jobs in the leisure and hospitality sectors were outnumbered by losses in retail and manufacturing. The unemployment rate is now 6.1% vs. 6.0% a month ago.
Construction spending rose 0.2% for March, compared with the 0.6% drop in February. The March balance of trade, reported by the Department of Commerce, showed the deficit grew by $74.4 billion vs. the February trade flow of negative 70.5 billion. March factory orders increased 1.1% vs. a prior 0.5% decrease. Wholesale inventories improved 1.4%; the previous month’s report was a +0.9% gain. Consumer credit contracted to $20 billion in March vs. February’s $28 billion. On Monday, the Treasury Department announced its expected borrowing target is more than $1 trillion for the rest of the fiscal year, as the nation continues spending heavily to address the coronavirus crisis. The U.S. Centers for Disease Control and Prevention reported that 33.4% of Americans are now fully vaccinated for COVID-19. Last week’s CDC count was 31.0%.
Stock markets were mixed for the week. The Dow Jones Industrial Average closed at 34,777.76 (+2,7%), the S&P 500 went out at 4,232.60 (+1.2%); while the NASDAQ Composite went out lower, settling at 13,752.24 (-1.5%). Volatility eased by 10.3%, as evidenced by CBOE’s VIX, with its 16.69 final valuation on Friday. In the currency market, the greenback took a drubbing as the U.S. Dollar Index fell 1.2% to 90.22, its lowest Friday close in fifteen weeks (90.21 on January 22nd). Commodity prices surged, as per the S&P GSCI. The index ended the week at 523.02 (+3.4%), a level not seen in six-and-a-half years (November 2014).
Copper took center stage in the metals markets, making an all-time high of $10,440 per metric ton on the LME. Analysts have dubbed the red metal as the new oil, based on its crucial role in the green economy with the expectation that electricity could overtake fossil fuels. COMEX July copper futures closed up 6.3% for the week, ending at $4.7485 per pound. Aluminum, the other industrial base metal we feature in our recap, settled at $2,450 per ton (+6.0%). In the bullion sector, the precious metals closed as follows: gold at $1,831.30 (+3.6%), silver at $27.477 (+6.2%), platinum at $1,254.50 (+4.1%). June palladium contracts, having made a new contract high on Tuesday ($3,019.00) took a corrective dip into Friday, ending down 1.0% for the week at $2,925.10 per Troy ounce.
Although the energies had no record prices, the week for the complex kept on an upward course. WTI crude oil on NYMEX rose 2.1% to $64.90 per barrel. ICE Brent followed, ending Friday’s session at $68.28 (+2.3%). Refined products played the same tune: ultra-low sulfur diesel hit the high note, increasing 4.6% to $2.0106 per gallon, and gasoline advanced to $2.1269 (+2.4%). June natural gas added 2.7¢ (+0.9%) to $2.958 per mmBtu.
The agricultural products that we monitor showed steady strength. Of the nine futures on our roster, eight advanced, and one declined. June live cattle contracts weakened, closing at 116.025 (-0.5%). For the gainers, closing prices and net weekly percentages were as follows: soybeans closed at $15.89¾ (+3.6%), wheat at $7.61¾ (+3.7%), corn at $7.32¼ (+8.8%), coffee at 152.90 (+8.1%), cocoa at $2,463 per metric ton (+3.4%), sugar at 17.49¢ per pound (+3.0%), cotton at 89.66¢ (+1.0%), and lean hogs closed at 112.850 (+2.8%).
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