Weekly Market Recap – September 16, 2022

The prospect of an imminent railway strike captured the financial news headlines early in the week until Thursday when a solution brokered by the White House gave investors one less thing to worry about. Also this week, a significant milestone was reached in U.S. mortgage rates: the 30-year fixed rate mortgage surpassed 6% for the first time since 2008. The leaders of Russia and China met in Uzbekistan, their first summit since the invasion of Ukraine, after which President Putin acknowledged that President Xi had expressed concerns about the war.

Monthly economic statistics reported during the week, compared with prior releases were as follows: consumer price index +0.1 vs. 0.0%, core CPI +0.6% vs. +0.3%, core CPI (year-on-year) +6.3% vs. +5.9%, business inventories +0.6% vs. +1.4%, capacity utilization 80.0% vs. 80.2%, retail sales +0.3% vs. -0.4%, industrial production -0.2% vs. +0.5% and the federal budget (deficit) -$220 billion vs. -$171 billion. There were no quarterly figures released. The unemployment numbers for the weekly reports showed initial jobless claims fell to 213,000 vs. the prior 218,000. Continuing unemployment claims were unchanged at 1.40 million.

Despite Monday’s out-of-the-gate stock rally, Tuesday’s inflation-tinged economic reports put a damper on the exuberance and set the tone for the week. The stock indices we feature in this recap all sank to levels not seen since mid-July. The Dow Jones Industrial Average closed at 30,822.42 (-4.1%), the S&P 500 gave back 4.8% to close at 3,873.33, and the NASDAQ Composite went out at 11,448.40 (-5.5%). The selling pressure spiked volatility, sending CBOE’s VIX to 26.30 (+15.4%). In currencies, U.S. Dollar Index futures remained firm, closing the week at 109.506 (+0.7%). The commodity sector softened a bit, as per S&P’s GSCI; the portfolio of futures fell to 631.58 (-2.8%).

Metal futures were mixed. Closing prices and percentage movements were as follows: gold at $1,683.50 (-2.6%), silver at $19.381 (+3.3%), platinum at $901.00 (+2.7%), palladium at $2,112.70 (-3.0%), copper at $3.5165 (-1.4%) and aluminum at $2,277.00 (-0.4%).

All of the energy contracts we cover in our recap retreated by week’s end. Friday settlements and weekly percent decreases were: NYMEX WTI at $85.11 per barrel (-1.9%), Brent crude at $91.35 (-1.6%), heating oil at $3.1725 per gallon (-11.4%), RBOB gasoline at $2.4157 (-0.7%), NYMEX natural gas at $7.764 per MMBtu (-2.9%), and ICE Dutch gas fell to €187.793 per MWh (-9.3%).

Of the nine agricultural futures on our radar, five decreased, two increased, and two didn’t budge. Those that went into the red were: corn at $6.77¼ (-1.1%), wheat at $8.59¾ (-1.1%), coffee at $2.1510 (-5.9%), sugar at 17.88¢ (-1.9%), and cotton at 99.29¢ (-5.3%). The gainers were: soybeans at $14.48½ (+2.6%) and lean hogs at 87.975 (+5.8%). Cocoa and live cattle were the sleepers, both ending the week at the same price as the previous Friday: cocoa at $2,360 (0.0%) and live cattle at 150.975 (0.0%).

Futures Referenced in Market Recap

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