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After two down days to start off the week, equity futures are indicated to recoup some of those losses at the open.  Hopefully, the market can hold onto these early gains, but only time will tell.  One positive for the bulls is that semis are trading up over 2% as a group following positive reports from Texas Instruments (TXN) and Teradyne (TER).

Read today’s Bespoke Morning Lineup for a discussion of the latest moves in the crude oil market, major earnings releases, the latest trends in the COVD-19 outbreak, and other stock-specific news of note.

After the May contract for WTI crude oil moved back above zero yesterday and the now front-month June contract is ‘only’ down 3% today, one might be tempted to think that a sense of normalcy is moving back into the crude oil market.  Don’t be fooled.

First, let’s look at the historical one-day change for WTI going back to 1983.   After Monday’s 306% record (in more ways than one) decline, yesterday’s rally of 126.6% rally out of negative territory was the strongest one-day gain in WTI’s history.

It’s not only the one-day daily changes that suggest the crude oil market is nowhere anywhere close to normal.  In looking at the spread between the prices of the current (front month) contract and the price six months from now, the current spread is at levels rarely seen. Through yesterday’s close, the spread between the two contracts was -$14.89 per barrel indicating that crude for delivery six months from now is nearly $15 more expensive than crude oil for delivery in the current month.  While that’s well off the record $68 spread seen at the close on Monday, going back to 2006, the only time the spread was at similar levels was during the depths of the financial crisis.  One thing we know about the 2008/09 period is that there was nothing normal about then.