Commodities Rise in May

Commodities continued rising in May with both major indexes up almost 3% for the month yet still below April's highs.

Year to date, the Bloomberg Commodity Index and the S&P Dow GSCI are up 17% and 23%, respectively. The gains were broad based. Click here to see detailed returns.

Fortunately the dismal outlook may have changed. Virus accelerated demand destruction, supply dislocations, price wars and geopolitics have given way to recovery, increased demand and supply scarcity-raising prices.

Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Note my excel data spreadsheets are available upon request. Send request to gdrahal@gmail.com to follow this blog and additional information.. 
© 2021 George Rahal.

Vaccinations by State

With vaccines readily available, social, economic and political attention is focused on the safe return to normal which can be directly measured by the percent of population fully vaccinated!  Below is the latest, as of 5/22/2021, from Johns Hopkins University:

The two other views of the same data are presented below. 

Barchart

The bar chart makes state success rates perfectly clear. Longer bars are better! Go Maine!

Note Florida and Texas are in the lower half of the United States. Needless to say, California, New York and, especially, New Jersey?!, rank in the upper to near highest in the percent of population vaccinated. The numerical table, as of 5/22/2021, is presented below.

Numerical Table

Conclusion

The national average today is 39%! Not nearly enough to give us the mythical herd immunity that will protect us all. But, sadly, vaccination rates are falling.

In JHU's latest data, TX ranks 40th in the nation while FL is 34th and both are below the national average. CA at 19th, NY 11th and NJ 6th (???!) are way above the national average. 

Government by the people has a responsibility to care for the people. One can wonder how perception and reality can vary so much. 

Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Note my excel data spreadsheets are available upon request. Send request to gdrahal@gmail.com for data and/or to follow this blog. 
© 2021 George Rahal.

 

Covid Revisited

Below are the latest total number of per capita confirmed cases of Covid by state as of 5/15/2021 from Johns Hopkins University. 

California (ranked 19th) and New York (35th) governors are under fire. Texas (24th) and Florida (34th) governors are taking victory laps. But, where is the victory?

Shorter bars are better.

Here's the same data in table form:

Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Send request to gdrahal@gmail.com to follow this blog. 
© 2021 George Rahal.

Colonial Pipeline and the Indexes

As an indexer I hardly ever say trading is fun but today may be an exception. Rarely are markets faced with a very likely short-lived binary contained emergency.  Below are four exciting thinkorswim year-to-date chart screenshots for the micro Dow 30, S&P 500, Nasdaq 100, and Russell 2000 futures contracts. 

The Indexes

Symbol MYMM21, Micro Dow Jones 30 Industrial Average June 2021 futures down* 25% from its intraday all-time high three days ago.

Symbol MESM21, Micro S&P 500 June 2021 Index futures contract is down* about 25% from its all-time high three days ago.

Symbol MNQM21, Micro Nasdaq 100 Index June 2021 futures contract is down* about 60% from its all-time high ten days ago.

And, symbol M2KM21, Micro Russell 2000 June 2021 index futures contract is down* 50% from it all time high 43 days ago!

*Note: these are not absolute down moves, these are the drawdowns measured against the range of the yearly high minus the yearly low. In other words, these measure how much the market has given up its move for the year-to-date. 100% down would take the market back to its yearly low.

These four ARE the major "broad" indexes that all money managers have such a hard time trying to beat. The last three days, as do all large breaks, present a great opportunity for active managers to beat the indexes. But how significant IS this sharp market break?

While the Dow and S&P just take us back to the second week in April (that is how large the rally WAS) the much more volatile Nasdaq is now at levels seen as far back as the second week of January! Same with the Russell 2000 index. The January 2021 highs are about where these two indexes are trading as I write. Those who thought they missed the move, well, they didn't. 

Colonial Pipeline

What largely precipitated this break is the Colonial gasoline pipeline interruption. When I was an energy trader, we used to darkly opine that a three day blackout in electricity or gas supply would shut down a city or a state.  The headline pictures of today's gas lines throughout the east cost are tribute to that. But what is also true is that as quickly as this went sideways is how quickly this can go back up! 

The pipeline interruption may be very short lived. I mean HOW incompetent ARE the IT guys and managers at Colonial? Darkside itself made a conciliatory statement. The pipe can be back even before the weekend and, if so, my bet (and I'm not really a betting guy) is market breaks will be very short lived as well.

Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Please request to follow this blog by email to gdrahal@gmail.com.

© 2021 George Rahal.

Commodity Time Machine - April 2021

After April's 8% commodity rally, one may say commodities are bullish. It might be a good time to see exactly where we, and commodities, stand long-term. 

Bloomberg Commodity Index