Tuesday, January 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are also pointed up when the New York day session begins.
The global equities markets were boosted overnight in part on news China’s central bank said it will act to stimulate the world’s second-largest economy via tax cuts, more credit availability to smaller companies and infrastructure spending. This news follows some very weak import and export data reported by China on Monday.
However, weak economic numbers coming from Germany, the work horse of the European Union, did dampen enthusiasm among traders and investors in Europe. Germany’s gross domestic product in 2018 was today reported up 1.5% versus up 2.2% in 2017. The 2018 GDP reading was the lowest in five years. China is Germany’s biggest trading partner.
Brexit is back on the front burner of the marketplace this week. Voters in the U.K. later today are likely to reject Prime Minister Theresa May’s latest Brexit plan, which could put the entire Brexit situation into serious turmoil. Such would likely prompt Europeans to seek out safe-haven assets such as gold.
The U.S. government partial shutdown is the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.
The important outside markets today see the U.S. dollar index higher. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are higher and trading just above $51.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the producer price index, the Empire State manufacturing survey, and the IDB/TIPP economic optimism index. There are also several Federal Reserve officials slated to give speeches today.
–Jim
