Monthly Summary

April 2020

Markets had another turbulent month as the corona virus remained front and center and economic data in April better illustrated its effect on global growth. Metals performed well, fueled by surging equities which had their best month in decades. Gold rose 6.2% to finish the month in the mid-$1680’s and silver jumped 5.8%, closing around $14.90.  Platinum soared 13.2% and palladium fell 13.1%

The month began with a relatively mild rise in unemployment given the scope of this pandemic.  Just over 700,000 jobs were lost in March and unemployment jumped to 4.4%.  These numbers weren’t indicative of March as a whole, however, since most of the data was from before the country went into lock down,  next month’s unemployment data will likely be one of the worst—if not the worst—on record.

Oil prices illustrated how much the global economy has collapsed over the past two months. With a sudden and drastic drop in demand coupled with limited storage capacity and an ensuing price war between Russia and Saudi Arabia, WTI crude prices turned negative in April as investors scrambled to sell out of their May contracts before expiration.

Stocks had their best month since 1987 with the Dow and S&P 500 rising 11.1% and 12.7% respectively.  The Nasdaq performed even better, rising 15.4% and coming within 1% of turning positive for the year.  Positive data suggesting an overall slowing of COVID-19 globally combined with substantial APAC market recovery gave investors great confidence to dive headfirst back into equities, regardless of ongoing catastrophic economic data.

The continued success of markets going into May,  is directly tied to corona virus news. Optimism and FOMO were apparent in April; however, March showed us how quickly things can unravel, and a second wave or delayed vaccine could be detrimental to an already suffering global economy.  Metals are poised to continue their success into May, either as a haven in a worsening economy or as a hedge in growing one.

 

Historical Trends & Pricing

Commentaries

May 22, 2020

Stocks are down slightly after mixed economic data leaves investors looking for guidance.  Home sales dropped to a 10-year low and new jobless claims rose by 2.44 million,  which was slightly worse than expected. Manufacturing data released showed a slight improvement in the economy with IHS Markit PMI rising to 36.4.  Likewise, the Philly Fed manufacturing index rose from -56.6 in April to -43.1.  Although less than expected, the rise does signal that April was likely the worst month of this decline.  Gold is trading at $1,720, down nearly 2% so far this week as stocks continue to entice investors amid falling bond yields and hope that the worst of this pandemic is behind us. 

 

May 18, 2020

Equities are surging today after Jerome Powell pledged additional Fed support to aid in economic recovery and a corona virus vaccine trial,  showed promising results.  All 45 patients involved in Moderna’s clinical trial produced COVID-19 antibodies, sending that company’s stock soaring 25%.  The Dow is currently up 830 points or 3.5%, and the S&P500 and Nasdaq are up 3% and 2.3% respectively.  Gold is down $23 as the positive vaccine and Fed developments are attracting investors back to stocks.

 

May 15, 2020

Gold broke $1,750 today as retail data came in worse than expected, boosting the appeal of haven assets.  Retails sales fell 16.4% in April, its largest drop on record.  Gold is looking to close the week up nearly 3% and silver is currently up about 8.5% for the week.  Stocks began the day in the red after the weak retail data, but have since turned positive with the Dow up about 100 points.

May 13, 2020

Gold is up $10.00, trading at $1,714.60, after Jerome Powell spoke about the current economic state of the US and called on Congress to provide additional aid to struggling families.  Powell said that the effects of the corona virus could be long lasting, however, emphasized that the Fed is not considering negative interest rates as part of its easing plan.  Stocks are down across the board, with the three major indices in the red about 2%.   

May 11, 2020

Gold dropped $17.00 and is trading at $1,694.70 as the US dollar jumped to a 2-week high today, putting downward pressure on metals. Stocks are mixed across the board with the Nasdaq up about 1%, the Dow down 0.3%, and the S&P trading virtually flat.  This week includes a lot of financial data which could be why stocks seem relatively calm as investors await regional Fed chairs’ analysis, CPI & PPI data, and retails sales.

May 08, 2020

Gold is down $13.20, trading at $1,708.60 as stocks surge in spite of the worst employment data on record.  The Dow is currently up 330 points and the S&P and Nasdaq are each up about 1.3%.  Unemployment soared to 14.7% and 20.5 million people lost their jobs in April.  Optimism on states opening and a collective sentiment among investors that things will quickly improve in the coming months are putting pressure on haven assets like metals.  Despite this, gold and silver are poised to end the week up about 0.5% and 3.5% respectively. 

May 06, 2020

Gold is trading at $1,682, its lowest price in 5 days, as it’s feeling pressure from a rising US dollar and increasing bond yields. Today,  ADP employment showed over 20 million jobs were lost in April as a result of this pandemic, but had little effect on stocks,  which had priced in worse numbers already. Stocks are currently split with the Dow and S&P flat and the Nasdaq is up about 1% as more states are beginning to allow non-essential businesses to reopen.

May 04, 2020

Gold broke $1,700 to begin the week, up $16.00 trading at $1,710, as equities are down modestly.  Updated projections on the duration and death toll that COVID-19 is likely to have on the US, specifically over the next two months, is putting the optimism of investors over the past few weeks into question as stocks pull back.

May 1, 2020

Gold is up $11.00, currently trading at $1,697.20 as equities are getting slammed on weak earnings.  April was the best month for stocks since 1987, but they begin May in a slump with the Dow, S&P, and Nasdaq down 3.0%, 2.6%, and 3.4% respectively.  Gold is set to close the week out down about 2% but is getting support today as a safe-haven asset amid increased stock volatility.

April 29, 2020

US GDP(Gross Domestic Product) declined 4.8% annualized in the first quarter of 2020,  ending a 6-year run of positive growth.  The decline is likely to get much worse and will likely shatter 2008’s decline of 8.4% when Q2 numbers are released.  The Fed just announced it would keep interest rates near zero indefinitely to help combat the financial effects of this pandemic. Gold remains relatively unscathed by either the decline in GDP or the Fed minutes just released,  and is currently trading at $1705.

April 27, 2020

Stocks begin the week going up as more states are beginning the process of reopening, giving hope that the worst of this pandemic is behind us.  Oil collapsed again today,  with the WTI June contract plunging 30% as an overabundance of supply with nowhere to put it continues to drive prices down. Gold, which rose sharply earlier today on falling oil prices, has since declined, as economic restrictions are beginning to ease around the world, drawing many investors away from haven assets.

April 24, 2020

Gold is poised to end the week up over 2.5% as collapsing oil prices pulled equities down most of the week while boosting safe-haven assets like metals. However, stabilizing oil prices Friday helped stocks close in the green while gold and silver both pulled back from their recent highs. Unemployment data released today showed 4.3 million new claims this, bringing the total to over 26 million since the virus outbreak.

April 22, 2020

Gold and silver are up $47.70 and $0.32 after the Senate gave the “OK” for an additional $500 billion in stimulus aid primarily for small businesses, which the House is expected to approve today.  The rise comes as ongoing stimulus aid increases concerns about inflation down the road.  Stocks are also up across the board on the aid package news and some signs that the oil market is stabilizing.  However, both WTI and Brent remain well below profitable levels at $11 and $20 a barrel respectively.

April, 20, 2020

Oil prices collapsed today as a global decrease in energy consumption coupled with an overwhelming supply with no storage available,  caused the May contract to turn negative for the first time ever as traders scramble to avoid taking delivery.  Stocks are getting pulled down by the oil situations with the Dow down 560 points going into the last hour of trading.  Gold and silver are up modestly, trading at $1,700 and $15.50 respectively.

April 15, 2020

Retail data released today showed an 8.7% decline in US consumer spending—its largest monthly decline on record.  Grocery spending, however, surged 27% as the virus continues to halt non-essential businesses.  While not unexpected, the extent of the decline was enough to rattle investors, sending the Dow and S&P falling about 2%.  Gold is down $27.20 but is still trading well above $1,700 and is still up about 6% for the month.  

April 13, 2020

Gold is up $18.50 today, breaking its recent record set in early March, and is trading at its highest level since late 2012.  Equities are struggling to continue last week’s surge, with major indices down across the board. Gold’s recent rise can be attributed, in part, to ongoing inflation concerns as central banks pump unprecedented stimulus aid into economies to help combat corona virus effects.

April 08, 2020

Stocks continue to climb on hopes that the worst of this global pandemic is behind us with the Dow, S&P, and Nasdaq all up over 2% midday.  Gold is currently up $2.50, trading at $1,665 while silver has declined and is trying to stay above the $15 threshold.  Premiums remain high on physical metals as supply concerns still linger, even as large refiners begin to reopen around the world.

 

April 06, 2020

Gold is up nearly $50 today, trading at a 3-week high as central bank easing measures around the world help boost the metal’s appeal against inflation. Equities are surging on news that Covid-19’s rate of spread is beginning to decline in major hot spots globally, illustrating some light at the end of the tunnel.  The Dow, Nasdaq, and S&P are all up about 5.6% to begin the shortened trading week.

April 03, 2020

Today’s jobs report helped shed light on the toll COVID-19 is having on the US economy as 701,000 jobs were lost in March and unemployment jumped from 3.5% in February to 4.4%.  It was the first negative month for payrolls in a decade, and what’s worse is these numbers will likely be revised upward as more data comes in.  Stocks began the day modestly in the green but have since retreated, down about 2%.  Gold is currently up $6.50, trading at $1,636.50, up about 2.5% from its weekly low.

April 01, 2020

US stocks continue their decline this week as ADP Employment Data showed a drop of 27,000 jobs and ISM manufacturing index fell to 49.1%– its lowest level since 2009.  Both outperformed expectations, however, much of the survey data was from the first half of March, before Covid-19 had fully affected the economy to the point it has now.  Friday’s jobs data and April manufacturing data will likely provide better insight to the scope of impact this virus has had on the US economy.

 

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