Thursday, April 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following Wednesday’s sharp losses.
The big U.S. data point this week will not be Friday’s monthly employment report (usually the most important data point of the month) but instead Thursday morning’s weekly jobless claims report. It is expected the weekly U.S. jobless claims will rise by over 3 million, after rising 3.2 million last week, as the U.S. economy has been severely crippled by the coronavirus outbreak.
The important outside markets today see Nymex crude oil prices sharply higher and trading around $22.25 a barrel, on short covering and perceived bargain hunting after hitting an 18-year low of $19.27 a barrel Monday. The rally in oil prices today is helping to lift the U.S. stock indexes early on. There are ideas the U.S., Russia and Saudi Arabia may be close to agreement on a deal to halt the Saudi-Russia oil-price war. President Trump said he is hopeful an agreement between Saudi Arabia and Russia will be reached soon. There are more than a few oil market watchers that are skeptical the Russians and Saudis will come to any significant agreement to reduce their oil output levels. Both major oil-producing countries hate the U.S. shale oil industry and are very likely enjoying watching U.S. oil companies suffer. Reports also said China will be buying crude oil for its strategic petroleum reserve. China reportedly at present has over 1 billion barrels of empty oil storage capacity, at the same time the U.S. has very little to none.
The U.S. dollar index is slightly down early this morning but the bulls are having a good week, overall. When the going gets really, really tough it appears global traders and investors still seek out the greenback. The 10-year U.S. Treasury note yield is trading around 0.59% Thursday morning, after trading above 1.0% last week. Declining U.S. Treasury yields recently are a sign that U.S. bond traders (arguably the smartest traders in the world) expect more serious markets/economic turmoil on the horizon, including suggesting that most markets have not yet fully priced in the eventual global economic toll the coronavirus sickness will exact.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ISM New York report on business, and manufacturers’ shipments and inventories.