Daily Morning Report

The silver futures market has been on fire recently and on Monday hit a more-than-three-month high. Prices are trending solidly higher on the daily bar chart, to suggest more upside in the near term.–Stay tuned! Jim

Monday, June 1–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Civil unrest over racial inequality that exploded in U.S. cities during the weekend has dealt another major blow to the world’s largest economy. Reports said President Trump Friday night had to take cover in a bunker at the White House due to unruly crowds gathered at the White House. With the U.S. dealing with its own civil problems, it seems even less likely mainland China will loosen its tightening grip on Hong Kong.

The protesting and rioting in major U.S. cities has called into question the timing of continued reopening of businesses that have been closed for two months due to the Covid-19 pandemic. The protesting crowds in the U.S. also prompted heightened concerns about a second wave of infections hitting in in the coming weeks. All of the above have cast a pall over traders and investors, who had been driving stock market prices higher on hopes the pandemic had peaked. Yet, U.S. stock indexes are only slightly lower heading into the New York opening.

In other news, reports Monday said China has halted its purchase of U.S. soybeans and some other U.S. ag products, in a signal that nation will no longer honor its “Phase 1” trade agreement reached with the U.S. in January. This follows the move by Trump on Friday afternoon to rescind Hong Kong’s more favorable trade status with the U.S.

China’s Caixin manufacturing purchasing managers index (PMI) came in at 50.7 in May versus 49.4 in April, and 49.6 forecast. China’s official manufacturing PMI was 50.6 in May compared to 50.8 in April and 51.1 forecast. The Euro zone May manufacturing PMI was reported at 39.4, which was in line with market expectations.

President Trump on Saturday said he will likely postpone the Group of Seven meeting that had been scheduled for mid-June in the U.S. He said he wants to add additional countries to the confab and said the current G-7 “does not represent what is going on in the world.”

The important outside markets see the U.S. dollar index lower early today and hitting a 2.5-month low overnight. Nymex crude oil prices are weaker and trading around $35.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.66%.

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, the ISM manufacturing report on business, construction spending, and the global manufacturing PMI.

–Jim
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Friday, May 29–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower in overnight trading. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. There is increased risk aversion in the marketplace late this week, as the U.S. and China appear on a collision course that could set off the next “cold war” between the two largest economies in the world. President Trump sometime Friday is expected to hold a press conference to address China’s actions to tighten its grip on Hong Kong. Trump will also likely comment on China’s involvement in suppressing early Covid-19 infection rates in China. Still, at present traders and investors have no idea what Trump will say or do.

In overnight news, the Euro zone consumer price index for May rose 0.1% compared to up 0.3% in April. The May reading was in line with market expectations.

The important outside markets see the U.S. dollar index lower early today and hitting a 2.5-month low. Nymex crude oil prices are lower and trading around $32.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.

U.S. economic data due for release Friday includes personal income and outlays, the advance economic indicators report, the ISM Chicago business survey, and the University of Michigan consumer sentiment report. Fed Chairman Jerome Powell also speaks at an event today.

–Jim
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The Euro currency futures market has been trading in a choppy and sideways fashion for weeks, but this week did push to a two-month high. Bulls are working to push prices above the trading range and would accomplish such if prices late this week continue to post gains. A bullish upside “breakout” from the trading range would suggest a near-term price uptrend in the Euro could be sustained.–Stay tuned! Jim

Thursday, May 28–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading, with European shares mostly higher and Asian shares mostly lower. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins. There is a bit more risk aversion in the marketplace Thursday, as China’s government has ratified what is calls a national security law that ostensibly tightens mainland China’s grip on Hong Kong. The move has further angered the U.S. as relations between the two largest economies in the world continue to deteriorate. The U.S. Secretary of State on Wednesday said Hong Kong was no longer autonomous from China, implying the U.S. may revoke Hong Kong’s favorable trade status. Such would have big implications for the many major U.S. companies doing business in Hong Kong. The U.S. House of Representatives Wednesday passed a bill that would sanction China for its oppression of minority groups.

The important outside markets see the U.S. dollar index weaker early today. Nymex crude oil prices are lower and trading around $32.15 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, expected to show a new claims of around 2 million; the second estimate of first-quarter GDP, durable goods orders, the weekly DOE liquid energy stocks report, the Kansas City Fed manufacturing survey, and pending home sales.

–Jim
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Wednesday, May 27–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Traders and investors remain upbeat at mid-week. After two months or more of being mostly quarantined the citizens of major industrialized countries are eager to get back to their pre-Covid-19 ways of life and are seeing light at the end of the tunnel. The global stock markets are trading like they expect the world’s consumers to get back to old spending habits sooner rather than later. Still, tens of millions of workers in the major global economies have been idled by the pandemic-induced closure of businesses. A significant number of lost jobs are gone for good.

Many in the general public still can’t rationalize world stock markets that have recovered so strongly in the face of many businesses that are still closed and up to 30% of countries’ workers are unemployed. One explanation is that the mammoth monetary stimulus programs from the major central banks that have pumped so much money into global financial systems is seeing a lot of that money flowing back into stock markets.

The important outside markets see the U.S. dollar index weaker early today. The greenback bulls are fading this week. Nymex crude oil prices are lower and trading around $34.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the Richmond Fed business survey, and the Federal Reserve’s beige book.

–Jim
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