Daily Morning Report

Tuesday, December 31–Jim Wyckoff’s Morning Markets Report

Asian stock indexes were mostly firmer overnight, while European stock indexes mixed to lower in quieter trading. The U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins, on this last trading day of 2019. Many U.S. markets close early today for the New Year’s holiday on Wednesday, when most global markets are closed.

Trader and investor attitudes remain upbeat going into 2020, due in large part to the world’s two largest economies, the U.S. and China, seeing a thaw in the more-than-two-year-old trade war that has slowed global economic growth. Most believe a partial trade deal will be signed in January.

A feature in a generally quiet, holiday marketplace the past few days has been many currencies rallying significantly against the U.S. dollar, including the Swiss franc, Euro currency, Japanese yen, Canadian dollar and Australian dollar. The U.S. dollar index hit a five-month low overnight and is poised to close at a technically bearish monthly low close today, which would suggest more downside price pressure for the greenback in early January, or longer. This is a bullish development for the raw commodity sector, as most raw commodities are priced in U.S. dollars on the world market.

The other key “outside market” today sees Nymex crude oil prices modestly up and trading close to a multi-month high at around $61.80 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. house price index, the Case-Shiller home index, and the consumer confidence index.

–Jim

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Monday, December 30–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were narrowly mixed in quieter overnight trading. The U.S. stock indexes are also pointed toward mixed openings when the New York day session begins on this last full trading day of 2019.

The markets are showing little reaction to the weekend U.S. air strikes against terrorist positions located in Iraq and Syria.

Trader and investor attitudes remain upbeat, due in large part to the world’s two largest economies, the U.S. and China, seeing a thaw in the more-than-two-year-old trade war. Most believe a partial trade deal will be signed in January.

A feature in the marketplace recently has been a rally in gold prices to a three-month high. Gold is on track to post its best annual price performance since 2010, with a gain of around 18% for the year.

The key “outside markets” today see the U.S. dollar index slightly lower. The greenback bulls have faded to end the year. Meantime, Nymex crude oil prices are slightly up and trading close to a multi-month high at around $62.00 a barrel.

U.S. economic data due for release Monday includes advance economic indicators, the ISM Chicago business survey, pending home sales and the Texas manufacturing outlook survey.

–Jim

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The U.S. stock indexes continue their trek north, setting record highs on a weekly and even daily basis recently. The steady, low-volatility climb is bullish and suggests more of the same. There are no early technical clues that the indexes are close to topping out. One solid technical signal that the U.S. stock indexes are peaking out would be a significant increase in daily price volatility at higher levels. When you see that start to happen (bigger daily price moves) then the end will be near. Stay tuned!–Jim

Friday, December 27–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings and at their record highs when the New York day session begins.

There has been little markets-moving news in the global marketplace this holiday week. The past several weeks have seen the geopolitical front quiet, which has diminished trader and investor worries and uncertainties, and has allowed world stock markets to continue to drift higher, with some stock indexes, including those in the U.S., hitting record highs. This lull won’t go on indefinitely and veteran market watchers are pondering the next major event to disrupt the calm.

The key “outside markets” today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are slightly up and hit a seven-week high overnight, trading around $61.90 a barrel.

U.S. economic data due for release Friday is light and includes the weekly DOE liquid energy stocks report.

–Jim

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Thursday, December 26–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed to slightly up in quiet, holiday trading overnight. The U.S. stock indexes are pointed toward slightly higher openings and at or near their record highs when the New York day session begins.

There is little markets-moving news in the global marketplace on the day after the Christmas holiday. The past several weeks have seen the geopolitical front quiet, which has squelched trader and investor worries and uncertainties and has allowed world stock markets to drift higher, with some stock indexes, including those in the U.S., hitting record highs. Veteran market watchers know the quiet trading atmosphere cannot go on indefinitely and are pondering the next event to upset the calm.

A feature in the markets this week is the rallying gold and silver markets, which today hit seven-week highs. The safe-haven metals are rallying despite little risk aversion in markets. Gold bulls are focusing on better demand for precious metals in 2020, amid outlooks for increased global economic growth in the new year.

The key “outside markets” today see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are slightly up, hit a seven-week high overnight, and trading around $61.25 a barrel.

U.S. economic data due for release Thursday includes the weekly MBA mortgage applications survey and weekly jobless claims.

–Jim

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The Nymex crude oil market is trending up and last week hit a seven-month high, basis February futures. Crude oil bulls have the solid near-term technical advantage, but there are stiff chart resistance levels just above the market that could stop the uptrend. Importantly, crude oil is arguably the leader of the raw commodity sector. Oil’s recent strong rally has also helped to lift other commodity market sectors, including grains, softs and metals. The raw commodity sectors has a bit of a head of steam heading into the new year. Part of the optimism is due to ideas of better global economic growth in 2020, as the world’s two largest economies (U.S. and China) appear to be on the mend from their two-year-old trade war. Stay tuned!–Jim