Weekly Market Recap – October 7, 2022

The U.S. gross national debt exceeded $31 trillion for the first time, nearing the statutory $31.4 trillion ceiling placed by Congress. Saudi Arabia and Russia, the leaders of the OPEC Plus cartel, announced a 2 million bbl. per day production cut, the largest in two years. North Korea escalated its weapons testing program by launching an anti-ballistic missile that flew over Japan, traveling more than 2,800 miles before landing in the ocean. As the statistics from Hurricane Ian’s destruction continue to update, the storm is likely to be one of the nation’s 10 most costly, estimated at between $66 and $71 billion which may impact the U.S. 2022 GDP.

In addition to the national debt figure mentioned above, other economic statistics released during the week, compared with prior levels, were as follows: construction spending -0.7% vs. -0.6%, job openings 10.1 million vs. 11.2 million, job quits 4.2 million vs. 4.1 million, factory orders 0.0% vs. -1.0%, nonfarm payrolls 263,000 vs. 315,000, unemployment rate 3.5% vs. 3.7%, consumer credit $32 billion vs. $26 billion and wholesale inventories, revised for August, were unchanged at 1.3%. The weekly unemployment numbers showed initial jobless claims rising to 219,000 vs. the prior 190,000 and continuing claims rising to 1.36 million from 1.35 million.

On Tuesday, the S&P 500 had its largest one-day advance (+3.1%) since May 2020. That jolt kept many stock investors bullish for only a couple of days, as the benchmarks we report faltered by Friday’s close; the three indices we monitor budged only modestly higher for the week. The S&P 500 rose 1.5% to close at 3,639.66, the Dow Jones Industrial Average settled at 29,296.79 (+2.0%) and the NASDAQ Composite went out at 10,652.40 (+0.7%). CBOE’s VIX had its last print at 31.36 (-0.8%). In currencies, USD Index futures closed the week at 112.683 (+0.5%). OPEC driven oil futures boosted the commodity sector with strong gains, as per S&P’s GSCI, which jumped to 666.73 (+9.7%).

Strength persisted across the board for most of the futures on our metals list. End-of-week results were: gold at $1,709.30 (+2.2%), silver at $20.255 (+6.4%), platinum at $917.90 (+6.8%), palladium at $2,191.30 (+0.4%), copper at $3.3865 (-0.8%) and aluminum at $2,299.00 (+6.3%).

In the energy markets, the petroleum based futures all rose sharply due to OPEC’s bullish news, while the natural gas contracts moved lower. Friday’s closing prices and corresponding percentage moves looked like this: West Texas Intermediate crude at $92.64/bbl. (+16.5%), Brent crude at $97.92 (+15.0%), heating oil at $4.0187 per gallon (+24.7%), gasoline at $2.7346 (+15.4%), NYMEX natural gas at $6.748 per MMBtu (-0.3%), and ICE Dutch gas at €156.207 per MWh (-17.3%).

In the Ag futures markets, the nine products we track were 6 up and 3 down. The gainers were: soybeans at $13.67 (+0.2%), corn at $6.83¼ (+0.8%), sugar at 18.68¢ (+5.7%), cocoa at $2,396 (+1.8%), live cattle at 148.050 (+0.7%) and lean hogs at 77.150 (+1.2%). The contracts that fell into the red were: wheat at $8.80¼ (-4.5%), coffee at $2.1810 (-1.6%) and cotton at 84.23¢ (-1.3%).

Futures Referenced in Market Recap

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