The following post is a weekly market update which summarized the performances of major asset classes on a weekly basis (5 sessions), for the period May 13-17, 2024.
In a week marked by notable all time record highs for S&P500 , DJIA and Nasdaq100, major indices across the globe exhibited positive performances with U.S. and Asian markets showing particular strength. The Dow Jones Industrial Average closed the week with a 1.24% gain in 5 sessions, ending at 40,003.59. The S&P 500 also saw a positive movement, rising by 1.54% last week to close at 5,303.27. Leading the U.S. indices, the Nasdaq Composite surged by 2.11% on the same time period, reaching 16,685.97. On the other hand, the S&P 500 VIX, an indicator of market volatility, declined by 4.46%, suggesting a period of reduced market anxiety.
Globally, the MSCI World Index mirrored the S&P 500’s performance with a 1.54% increase on 5 sessions. In Europe, the picture was less optimistic. Germany’s DAX dropped by 0.35%, closing at 18,707.28, while the UK’s FTSE 100 edged down by 0.16% to finish at 8,420.26. France’s CAC 40 experienced a sharper decline of 0.63%. The Euro Stoxx 50, which aggregates the performance of major European companies, slipped by 0.39%.
Contrasting these declines, Spain’s IBEX 35 climbed by 2%, and Italy’s FTSE MIB advanced by 2.14%, closing at 35,398.82.
Asian markets largely followed a positive trajectory. Japan’s Nikkei 225 rose by 1.41% last week, closing at 38,766.50. The Shanghai Composite, however, remained virtually flat with a minor decrease of 0.02%. The standout performer was Hong Kong’s Hang Seng Index, which jumped by 2.95% to close at 19,553.61.
Overall, the week highlighted robust gains in the U.S. and Asian markets, juxtaposed with a mixed performance in Europe. The broad-based advance in the Hang Seng Index was particularly noteworthy, reflecting a significant rebound in Hong Kong’s market sentiment. Meanwhile, the decline in the S&P 500 VIX indicated a week of relative calm in the U.S. markets, suggesting investor confidence. As global economic conditions continue to evolve, these indices offer a snapshot of the current market climate and investor sentiment.
In the forex market, the past week saw varying performances across major currency pairs. The EUR/USD pair closed at 1.0867, registering a 0.93% increase during the week, reflecting a stronger euro against the dollar. The USD/JPY pair remained nearly unchanged with a slight decline of 0.04%, closing at 155.64. The GBP/USD pair showed a notable rise, appreciating by 1.44% to close at 1.2699, indicating a robust performance for the British pound.
The USD/CHF pair also experienced a positive shift, albeit modest, with a 0.32% increase, ending the week at 0.9089. Conversely, the USD/CAD pair saw a decline of 0.42%, closing at 1.3611, suggesting a stronger Canadian dollar against the U.S. dollar. The EUR/JPY pair climbed by 0.82%, closing at 169.17, which highlights the euro’s strength against the yen.
Among the commodity-linked currencies, the AUD/USD pair advanced by 1.37% in 5 sessions, finishing at 0.6692, reflecting a stronger Australian dollar. The NZD/USD pair exhibited the most significant gain of the week, rising by 1.9% to close at 0.6134, showcasing a robust performance for the New Zealand dollar.
Overall, the week was characterized by notable gains in the GBP/USD and NZD/USD pairs, while the USD/CAD and USD/JPY pairs saw minor declines.
In the commodities market, last week witnessed significant bullishness, with Natural Gas and Silver among the best performers.
Gold prices climbed by 2.25%, closing at $2,419.80 per ounce. The yellow metal continued its upward trend as investors sought safe-haven assets amidst global economic uncertainties. Silver saw an impressive surge of 11.88%, ending the week at $31.775 per ounce. This notable gain reflects strong industrial demand coupled with heightened investor interest. Platinum also had a robust performance, appreciating by 9.14% to close at $1,094.70 per ounce. Palladium, while less dramatic, still posted a respectable gain of 3.6%, finishing the week at $1,013.00 per ounce.
Copper prices surged by 9.47%, closing at $5.0825 per pound. The red metal’s rise was fueled by optimistic industrial activity and supply constraints. This positive momentum in base metals indicates strong market confidence in global economic expansion.
Crude oil prices experienced modest gains. West Texas Intermediate (WTI) crude rose by 1.69%, closing at $79.58 per barrel, while Brent crude oil increased by 1.46%, ending the week at $84 per barrel. These gains were driven by supply concerns and geopolitical tensions, bolstering the outlook for crude oil.
Natural gas prices recorded the most substantial increase among all commodities, soaring by 18.4% to close at $2.638 per MMBtu. This sharp rise was attributed to seasonal demand and potential supply disruptions.
S&P500
The breakout above April highs pushed the index on unchartered territory. Even in case of retracement below the recent breakout line, healthy bullish setups would remain valid till the index will stay above both 21 day SMA and 55 day EMA, now in area 5,100-5,140.
Crude Oil Futures
Crude Oil made a recent double bullish spike to keep itself above the 200 day SMA. A breakout above 80 $/barrel could prepare the commodity to test area 84 and then 88. Below the 200 day SMA is likely a retracement to 76 and retest its 2024 lows in area 72 $/barrel.
EUR/USD
The pair is making higher highs and higher lows from its 2024 bottom of last month where it reached 1.06. Next relevant test in area 1.1 while a drop below 1.07 could bring the pair to retest again its year low.
