Weekly Update 24 Apr 2020

Cryptocurrencies advanced, national currencies continued to decline, and stocks, bonds, and commodities were mixed but mostly lower. Coffee fell the most, dropping 9.3%, outpacing even crude oil, which declined a further 8.5%. Gold stocks made the largest gains, rising 12.0%.

The British Pound (not in table) led the national currency declines, falling 2.7%. The worst performers in the table were the Euro, down 2.1%, and the Chinese Yuan, off 1.9%. The Japanese Yen outperformed, giving up 1.3%. US Dollar cash and 1-3 year USD Bonds each declined 1.4%, while long term treasury bonds gained 0.4%.

Bitcoin dropped hard on Monday, to a low of 126.9 grams, then climbed through the rest of the week to finish at 136.9 grams, up 5.0%. Ethereum didn't experience much of a downdraft on Monday, but did rise as the week progressed, finishing up 8.8%.

The only rising equity asset was the HUI gold stock index, which beat all other asset classes this week, gaining 12.0%. The Japanese Nikkei index had the worst losses, falling 4.4%. The US S&P 500 slid 2.7%, the smallest loss among the major markets.

Cotton was the only commodity in the black, rising a respectable 4.0%. Coffee had the largest loss of any asset this week, falling 9.3%. Crude crashed on Monday, with the May futures contract actually going negative. I have chosen to switch to the June contract to get a more realistic view of the price, but even that cratered to a new all-time low of 213 mg per barrel, 37% below the previous week's close of 336 mg. Over the course of the week crude recovered somewhat, ending at 307 mg, down 8.5%.

Lack of demand due to government-mandated lockdowns, a shortage of storage facilities, and price wars between the oil producing nations — all of whom are desperate for revenues — will continue to impact this market for some time; and the impacts will extend into the broader economy as closures, bankruptcies, and defaults grow.