Wheat and natural gas, two commodities closely associated with the war in Ukraine, took a sharp drop midweek. Ukraine President Zelensky offered “genuine peace talks” and President Putin began pulling troops out of Rherson, a city viewed as important because it has been held by Russia since the early days of the invasion. Troop withdrawal there has been viewed as a sign Russia is losing the war.
Stocks Surge as Inflation Falls
Thursday saw the largest single-day jump in stock index futures contracts in over two years. The December S&P and Dow futures are all blowing through the highs of the past two months, and NASDAQ futures are struggling to scale them as well. An easing of the pace of inflation, as measured by the Department of Labor, was seen as a reason for the Federal Reserve to back off from aggressively raising interest rates. Thursday’s report gave investors hope that rates will soon stabilize or move back down, which could help support our economy.
Gold and Silver Rush Up as Dollar Falls
Dormant gold bugs sneaked out of the closet and drove the yellow metal to new daily highs for the second week in a row. Despite agricultural commodities tumbling with the peaceful story in Ukraine and the deceleration in inflation, there has been a sharp and consistent drop in the U.S. dollar. That has shined a light on the advantage of owning gold and other “hard” assets as the greenback loses value.
UN Chief Issues Climate Warning
Just as more meteorologists warn the past eight years were the hottest on record and the rate of sea-level rise has doubled since 1993, the UN Secretary General admonished world leaders. China and the U.S. were particularly reminded of the need to cut greenhouse gas emissions. Antonio Guterres warned the world is on, “a highway to climate hell with our foot on the accelerator.” The World Meteorological Organization agrees: “Wars will end, inflation will end, and the energy crisis will end, but climate change will only get worse.”
Week’s Biggest Winners and Losers
Stock indexes, metals, foreign currencies and sugar were the stars for the bulls, whereas corn, wheat, livestock and natural gas made the down list. As of midday Friday, the December S&P was up roughly 180 points on the week. December gold was up $100 per ounce. The Euro gained almost three-and-a-half cents on the dollar. Corn for December delivery was down 25 cents per bushel, and wheat was down nearly 30 cents.