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Three months can be an eternity and that is what it was for energy futures in particular. Futures and commodities were hit violently in the first quarter of 2020 with the black swan Covid -19 running roughshod. In Q2 bounces in equity and energy markets were spectacular..

Futures June 2020 Q

2020 Second Quarter Performance of Futures and Commodities

After the fear and gloom for the first quarter we saw the effects of massive Central Bank and fiscal coupled with less fear as positive trends in Oovid-19 led to economic reopenings. Throw in hopes for a vaccine drove risk off asset plays higher.

Oil and gasoline prices had their strongest quarter in 30 Years

After negative prices and record lows on April 20 we saw the rally of all rallies in oil futures.

  • in U.S. West Texas Intermediate futures surged 91% in the three months through to end of June, the best quarterly performance for U.S. crude since the third quarter of 1990 when it soared 131% during the first Gulf War.
  • Brent crude futures were up over 80% in the second quarter. This was the best quarterly performance since the third quarter of 1990, when it gained 142%. Brent futures did not enter negative territory in late April, but did slump to its lowest level since 1999
  • For a reality check on the Covid destruction despite these extraordinary gains both Brent and WTI futures are still down over 34% since the start of the year.
  • Gasoline futures were the best performer, up 122.24% for the second quarter. As one would expect as fear settled down the worse performer was the previous quarters best performer, the VIX.

WTI W 7 3 2020

WTI Futures Bounced 91% in Q2 2020

Equity Markets had a monster recovery in the Second Quarter

For the last day the Dow Jones Industrial Average surged 217.08 points, or 0.9%, to close at 25,812.88.The S&P 500 gained 1.5% to end the day at 3,100.29 and the Nasdaq Composite jumped 1.9%. to 10,058.77. T

  • The Dow ended the second quarter with a 17.8% gain, the biggest quarterly rally since the first quarter of 1987, when it ripped up 21.6%.
  • The S&P 500 had its biggest one-quarter surge since the fourth quarter of 1998, soaring nearly 20%.
  • The Nasdaq Composite jumped 30.6% for the quarter, its best quarterly performance since 1999.

The major averages all posted their third consecutive monthly gain. The Dow was up 1.7% for June. The S&P 500 and Nasdaq were up 1.8% and 6%, respectively, month to date.

Ahead expect markets to become increasingly volatile if the number of coronavirus cases keeps rising and if some of the proposed virus treatments and vaccine fail. With that expect more viscious partisan political attacks in the US as November approaches.  Expect more protests, and not of the peaceful variation.

.Stock Performance Q2 2020

2020 First Quarter Performance of Futures and Commodities

Futures Performance 2020 03 31

 ViX was the best performer in the first quarter as stockmarkets collapsed

It was a brutal month for stocks and energy in particular. The Dow closed down 13.74% in March, its worst month since October 2008. The Dow closed down -23.2% for the quarter, its worst since the fourth quarter of 1987 and was the Dow’s worst first quarter ever. 

The flip side of the stockmarket destruction was the VIX as fear took hold with the coronavirus pandemic. Gold also benefited. Though the yellow metal settled down 1.57% at $1,596.6 per ounce, itl gained 4.83% in the first quarter, posting its sixth straight positive quarter.

Orange Juice Futures closed up 20.5% this quarter, posting its best quarter since Q4 2015 when OJ gained 37.04%

Palladium closed up 20.71% this quarter for its best quarter since Q3 2016 when palladium gained 20.78%

How deep has the fall been? The Dow is 25.88% below its intraday all-time high of 29,568.57 from Feb 12. The S&P closed down 1.6% for its second negative day in three, closing up or down more than 1% every day in March with the exception of March 19. The S&P closed down 12.51% over the month of March, its worst month since October 2008. The index closed down 20% for the first quarter, its worst quarter since the fourth quarter of 2008, when the S&P 500 lost 22.56%. It was the S&P 500′s worst first quarter ever. Sectors:

10 out of 11 sectors were negative today led by Utilities down 4.02%. Nine out of 11 sectors closed down at least 20% below their 52-week high closes with the exception of Health Care and Staples. The U.S. 10-year note yielding 0.6679% vs. Friday’s close of 0.744%

U.S. West Texas Intermediate crude did rise on the last day of the month by 1.9% to settle at $20.48 per barrel on Tuesday.  However the contract posted its worst month and quarter on record, falling 54% and 66%, respectively.

20200331 WTI worst quarter

 Sources: Finviz, `CNBC, TC

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