Economic concerns weighed on silver and oil.

Palladium and corn outperformed this week, while other commodities struggled. At the same time, the S&P 500 eked out a gain of less than 1 percent, bringing its year-to-date gain up to 5.4 percent.

Macroeconomic Highlights

Geopolitical headlines were mixed this week. On the one hand, Putin struck a dovish tone in comments he made on Friday: “We will do everything in our power so that this conflict is ended as soon as possible, so that the blood can stop flowing in Ukraine.” 

On the other hand, Ukraine reported that Russia made a recent “incursion” into Ukraine, which Ukrainian forces propelled. Russia denied the claims.

This week’s economic news was on the disappointing side. According to Eurostat, eurozone gross domestic product was unchanged in the second quarter, below the 0.1 percent increase that was expected. On a year-over-year basis, GDP was up by 0.7 percent.

The eurozone’s largest economy, Germany, saw its GDP shrink by 0.2 percent in the second quarter, also below expectations.

Separately, Eurostat reported that the consumer price index in the eurozone grew by 0.4 percent year-over-year in July, while the core CPI rose by 0.8 percent from a year ago. Both figures were in line with expectations, but well below what the European Central Bank is comfortable with.

In the U.S., the Commerce Department reported that retail sales were flat in July, worse than the consensus estimate that was calling for a 0.2 percent increase.

Finally, highly anticipated growth figures from Japan showed that the country’s economy contracted by an annualized 6.8 percent in the second quarter. Though that was better than the 7 percent contraction that was expected, it was the worst showing since the 2011 earthquake and nuclear crisis.

Economists say the GDP decline is a response to a sales tax hike that took effect in April, which took the rate from 5 to 8 percent. Anticipating the hike, consumers had pushed their purchases forward to the first quarter, fueling a 6.1 percent GDP increase. We now know that that was more than reversed in the second quarter.

Commodity Wrap

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