Market Commentary 13 May

HIGHLIGHTS

Last Friday saw Tech Stocks (Nasdaq) rallied to recoup most of its losses this year. Most indices extended their weekly gains after a few upbeat earnings reports from tech companies. And some US states are slowly opening up their economy reviving consumer spending.

This positive news really stands out against a backdrop of the worst jobs report since World War 2. From the previous month of 4.4%, the April figure ballooned to 14.5% with NFP declining by a whopping 20.5 Million. With companies reopening like Boeing and Apple, we can only hope that those that were temporarily laid off due to COVID-19 will be rehired once the economy is back on its feet.

Dow 30 Chart

DOW 24,331 -14.7% YTD
S&P 500 2,929 - 9.3% YTD
Nasdaq 9,121 + 1.7% YTD

Crude Oil

Oil prices rose for the 2nd week due to easing of the lockdown of more countries and slowly reopening their economies. But analysts mentioned that most gains will be limited with most oil produced are just pumped into storage increasing inventory and creating more oversupply. But supporting oil prices is that trade Representatives from the US and China have agreed to implement the Phase one deal which was discussed before the Corona outbreak. The current WTI price is $25.50. And Saudi Aramco is releasing its earnings report.

Gold

With gold hitting technical support at the 1700 figure but gains were tempered by the strong US dollar. Gold seems to be trading in a tight range while people are still buying the physical metal countries are easing on lockdown and opening up their economy. There are unwelcomed reports that corona cases are still rising and countries like Japan, South Korea are getting a second wave of cases. Any decline in prices will be met with buyers who are still expecting things to deteriorate further. Plus, an anticipated negative rate in the US is supportive of gold prices.

Bitcoin

Bitcoin prices have been on a tear here from mid-March this year. From below $5000 doubling up to $10,000 and now at just below $9K. The next big thing in Bitcoin is the halving issue. Roughly every 4 years, the amount of bitcoins as a “reward” to miners for unlocking a block is cut by half. The first few miners in 2009 received 50 bitcoins after unlocking a block then dropped to 25 in 2012, then dropped further to 12.5 in 2016 and the next one this May down to 6.25 bitcoins. As a reminder bitcoins are finite and there will be only 21 Million in circulation.

Even renowned investor Paul Tudor is buying Bitcoins since it reminded him of gold during the 1970s. In Halving,

Bitcoin Chart.

All views, news, analysis, quotes, or other information from Rockfort Group and its subsidiaries are general market commentary only and does not constitute investment advice. Before making any investment please consult your financial adviser.

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