China remains in talks to buy Russian oil for their strategic reserves

US stock market:  Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground. The S&P 500 and the NASDAQ logged their seventh straight week of losses, their longest losing streak since the end of the dot-com bubble in 2001. The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression. 

Worries about surging inflation and rising interest rates have pummeled the U.S. stock market this year, with danger signals from Walmart Inc. and other retailers this week adding to fears about the economy. The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day. Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition. The tech-heavy NASDAQ was last down about 27% from its record close in November 2021.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average added 0.03%. The biggest gainers of the session on the Dow Jones Industrial Average were Cisco Systems Inc., which rose 2.92% or 1.22 points to trade at 42.94 at the close. Salesforce.com Inc. added 2.60% or 4.05 points to end at 159.65 and McDonald’s Corporation was up 2.14% or 4.91 points to 233.91 in late trade. The biggest losers included Boeing Co, which lost 5.07% or 6.44 points to trade at 120.70 in late trade. Caterpillar Inc. declined 4.32% or 8.94 points to end at 197.82 and 3M Company shed 2.13% or 3.13 points to 143.83.

NASDAQ 100

The NASDAQ index fell 0.30%. The top performers on the S&P 500 were VF Corporation which rose 6.07% to 47.32, American Tower Corp which was up 4.73% to settle at 244.28 and Eli Lilly and Company which gained 4.39% to close at 298.85. The worst performers were Ross Stores Inc. which was down 22.47% to 71.87 in late trade, Deere & Company which lost 14.07% to settle at 313.31 and Advance Auto Parts Inc. which was down 7.23% to 181.89 at the close.

Oil price - Crude Oil market, Brent Oil market

Crude oil futures were lower as media reports of China considering buying Russian oil for its strategic reserves eased concerns of a sharp cutback in Russian crude exports. China remains in talks to buy Russian oil for their strategic reserves, according to media reports, even as the US announced plans of potentially imposing secondary sanctions on Russia. Russian Deputy Prime Minister Alexander Novak had said on May 19 that the country would redirect European crude exports to other markets if the EU imposes an embargo. 

Still, a reduction in Chinese exports has been a key driver in tightening refined product supply across the globe. This reduction in Chinese exports is more likely structural, with China wanting to drive consolidation within the domestic refining industry and cut emissions, which suggests that the tightness in refined markets is unlikely to disappear anytime soon. Nonetheless, supply-side concerns arose as the US announced that considerations of imposing secondary sanctions on countries that purchase Russian oil were "certainly not off the table".

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices rose 2% on the week to give longs in the game their first weekly win in five. While they may have secured a break from their gloom which began in mid-April, bulls in bullion still appeared to be on a knife's edge given the dollar’s potential to reprise 20- year highs, analysts cautioned.  At Friday’s level of 103.23, the index wasn’t too far from the week-ago peak of 105.06, which marked a high since 2000. Another bugbear for gold longs: bond yields. 

The yield on the benchmark 10-year U.S. Treasury note has moved down to 2.79% from May peaks of 3.2% on expectations that forthcoming U.S. rates by the Federal Reserve in June and July will be capped at a half percentage point each round, instead of the initially speculated three-quarter point. Yet, with rate expectations often moving on a dime, yields could jump too. 

The second half of the week has been kind to gold as the trepidation in financial markets has shifted slightly from the pace of monetary tightening to recession risks. So rather than higher yields and a stronger dollar weighing on the yellow metal, we've seen investors pouring into safe havens which have lowered yields slightly and lifted gold. Front-month gold futures for June settled at $1,842.10 per ounce, up just 90 cents, or less than 0.1%, on the day. Week to date though, June gold was up almost $34 or 1.9%. It was a tumultuous week for futures of the yellow metal which plunged on Monday to $1,785, its lowest level since the Jan. 28 bottom of $1,779.70. At the end of the day, rate hikes should lower demand but so should a recession. If the latter continues to be viewed as a likely outcome of the former, gold could see its fortunes improve further.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Wheat fell for a third straight session on Friday, retreating further from a two-month high hit earlier this week as technical selling pressured the market. Corn also eased, as accelerated U.S planting and news that Argentina may expand an export volume cap weighed. Soybeans gained on strong export demand, amid tight supplies.

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