Daily Morning Report

Tuesday, January 7–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. It appears risk aversion in the global marketplace has at least temporarily subsided following last week’s geopolitical shockwave that occurred when a U.S. drone strike killed a leading Iranian general in Baghdad, Iraq. U.S. stock indexes rebounded Monday to close firmer. Gold and oil prices have backed down from their spike highs scored on Monday.

It could be that many traders and investors figure Iran will not execute a major retaliation against the U.S. and its vaunted military, knowing such a move would invite a likely massive and devastating counter-attack from the U.S.—as was threatened by President Trump in a weekend tweet. Other veteran market watchers reckon Iran will retaliate against the U.S. but not right away. However, virtually all market participants agree the U.S. drone strike further stokes and already volatile Middle East.

In overnight news, the Euro zone December consumer price index was reported up 1.3%, year-on-year, versus November’s reading of up 1.0%. The December reading was in line with market expectations.

The key “outside markets” today see crude oil prices weaker and trading around $63.00 a barrel. Meantime, the U.S. dollar index is firmer.

U.S. economic data due for release Tuesday includes the weekly Goldman Sacs and Johnson Redbook retail sales reports, U.S. international trade data, the ISM non-manufacturing report on business, and manufacturers’ shipments and inventories.

–Jim

Continue Reading

The S&P emini futures have seen a “key reversal” down on the daily bar chart that occurred last Friday negated with this week’s upside price action. It appears risk aversion in the global marketplace has at least temporarily subsided following last week’s geopolitical shockwave that occurred when a U.S. drone strike killed a leading Iranian general in Baghdad, Iraq. U.S. stock indexes rebounded Monday to close firmer. Gold and oil prices have backed down from their spike highs scored on Monday. It could be that many traders and investors figure Iran will not execute a major retaliation against the U.S. and its vaunted military, knowing such a move would invite a likely massive and devastating counter-attack from the U.S.—as was threatened by President Trump in a weekend tweet. Other veteran market watchers reckon Iran will retaliate against the U.S. but not right away. However, virtually all market participants agree the U.S. drone strike further stokes and already volatile Middle East. Stay tuned!–Jim

Monday, January 6–Jim Wyckoff’s Morning Markets Report

Global stock markets are still reeling on geopolitical fears following the U.S. drone strike late last week that killed Iran’s leading military figure. Asian and European stocks were down overnight and the U.S. stock indexes are set to open the New York day session with solid losses.

Gold prices are again sharply higher Monday and hit a nearly seven-year high overnight, at $1,590.90, basis nearby Comex futures. The key “outside markets” today see crude oil prices higher and at a 22-month high, after hitting $64.72 a barrel overnight. Meantime, the U.S. dollar index is weaker amid a five-week-old downtrend in place on the daily bar chart.

The weekend saw more saber-rattling from the U.S. and Iran. President Trump tweeted that the U.S. has 52 Iranian sites set for attack if Iran retaliates against the U.S. for the killing of its general. Meantime, Iraqi’s government voted to expel U.S. troops from Iraq, which prompted a response from Trump that the U.S. would impose economic sanctions on Iraq if such occurred. Nations around the globe issued proclamations urging restraint on the matter from both the U.S. and Iran. This is arguably the most serious geopolitical development in many years, and whose repercussions will play out for a long time to come. That will likely keep trader and investor risk aversion elevated for some time to come. That’s bullish for safe-haven assets like precious metals and U.S. Treasuries.

In other overnight news, the Euro zone producer price index for December came in at up 0.2% on the month and down 1.4%, year-on-year. Very low inflationary pressures in the world’s major economies continues to be a concern for the major central banks of the world.

U.S. economic data due for release Monday includes the U.S. services purchasing managers’ index (PMI) and the global PMI.

–Jim

Continue Reading

An extended period of geopolitical calm was shattered late Thursday when the U.S. conducted a military air strike in Baghdad, Iraq that killed a top Iranian general along with an Iraqi paramilitary leader. The U.S. said Iran was planning to kill Americans in the Middle East. The strike also comes after the major attack on a Sauid oil installation a few months ago, in which the U.S. blamed Iran. Iran promised harsh retaliation. Nymex crude oil prices spiked, hitting a 10-month high. The keen uncertainty regarding this situation, including how Iran will respond, is likely to keep crude oil traders and the global marketplace on edge for some time to come.

Friday, January 3–Jim Wyckoff’s Morning Markets Report

An extended period of geopolitical calm was shattered overnight when the U.S. conducted a military air strike in Baghdad, Iraq that killed a top Iranian general along with an Iraqi paramilitary leader. The U.S. said Iran was planning to kill Americans in the Middle East. The strike also comes after the major attack on a Sauid oil installation a few months ago, in which the U.S. blamed Iran. Iran promised harsh retaliation.

Global stock markets plunged on the news and U.S. stocks are set to open the New York day session with strong losses. Gold prices shot higher and hit a four-month high, presently trading around $25 higher, while other key outside markets today see crude oil prices spiking, hitting a 10-month high and presently trading around $2.50 higher at near $63.50 a barrel. The U.S. dollar index continues its rebound from this week’s multi-month low and is trading moderately up on the day.

The keen uncertainty regarding this situation, including how Iran will respond, is likely to keep the global marketplace on edge for some time to come. China has urged both the U.S. and Iran to use restraint, as China and the U.S. are set to sign a partial trade deal on January 15.

The U.S. military action against Iran overshadows a very busy day for U.S. economic data, including the afternoon release of the FOMC minutes from the last meeting. Traders and investors will glean the FOMC minutes for clues on the future direction and timing of U.S. Federal Reserve monetary policy. Other U.S. economic data due for release today includes the ISM New York report on business, the ISM manufacturing report on business, construction spending, the weekly DOE liquid energy stocks report and domestic auto industry sales.

–Jim

Continue Reading

Thursday, January 2–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mostly firmer overnight. The U.S. stock indexes are also pointed toward higher openings and at or near record highs when the New York day session begins, on this first trading day of 2020.

Trader and investor attitudes remain upbeat, due in large part to the world’s two largest economies, the U.S. and China, seeing a major thaw in the more-than-two-year-old trade war that has slowed global economic growth. A partial trade deal is set to be signed on January 15th.

China’s central bank eased its monetary policy on Wednesday by lowering its banks’ reserve requirement ratios, which will put more money into China’s financial system. That news also worked to boost world equity markets.

The was major protesting in Hong Kong to start the new year, with reports saying more than 400 civilians were arrested and police using pepper spray and water cannons. This matter could again become a front-burner issue for the marketplace, especially if mainland China gets more involved in quelling the protesters.

In other news, the Euro zone December manufacturing purchasing managers’ index (PMI) was reported at 46.3, which was better than market expectations and compares to the November reading of 46.9. A number below 50.0 suggests contraction in the sector.

A feature in the marketplace during the holiday season has been many currencies rallying significantly against the U.S. dollar. The U.S. dollar index did rebound overnight from a five-month low hit earlier this week. The other key “outside market” today sees Nymex crude oil prices near steady and trading around $61.00 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the U.S. manufacturing PMI, and the global manufacturing PMI.

–Jim

Continue Reading