Friday, February 14–Jim Wyckoff’s Morning Markets Report
Asian and European shares were narrowly mixed overnight. U.S. stock indexes are pointed toward modestly higher openings and new record highs when the New York day session begins. Traders are tentative on this last trading day of the week and as U.S. market participants head into a three-day weekend, with the President’s Day holiday on Monday.
Here is the latest on the coronavirus outbreak: About 65,000 people around the globe have been afflicted with the virus, with China’s total now above 60,000. China’s hardest-hit Hubei province saw cases rise by over 4,800 on Friday. Some global shipping rates have fallen to record lows amid the outbreak, as some ships are being turned away at ports. One report said the Capesize index, which tracks freight rates for the largest carriers of dry bulk commodities, fell into negative territory last week for the first time since its creation over 20 years ago.
The annual London Metals Exchange (LME) Week Asia 2020 seminar has been postponed and the LME Asia Dinner has been cancelled due to the outbreak.
China’s central bank said in a statement Friday the effects of the coronavirus outbreak will only be temporary. The bank encouraged foreign investors to set up businesses in China.
The U.S. government on Thursday charged the big Chinese telecommunications giant Huawei with racketeering. The ramifications of this on U.S.-China relations and/or the U.S.-China trade deal signed in January, if any, are not clear.
The U.S. Treasury sold its 30-year bonds at a record-low yield of 2.061% Thursday, beating the previous record low auction yield of 2.17% set last fall. The lowest yield the 30-year bond has ever reached in daily trading is 1.941%, set last summer.
In other overnight news, the Eurozone fourth-quarter GDP was reported up 0.1% from the third quarter and up 0.9%, year-on-year. Those numbers were very close to market expectations.
The key outside markets today see crude oil prices higher and trading around $52.00 a barrel. Meantime, the U.S. dollar index is slightly up in early U.S. trading and hit a multi-month high overnight.
U.S. economic data due for release Friday includes retail sales, import and export prices, industrial production and capacity utilization, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.