Daily Morning Report

Wednesday, December 18–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed overnight. The U.S. stock indexes are pointed toward modestly higher openings and will be at or near record highs when the New York day session begins. Traders and investors are turning their attention to the upcoming holidays, so trading interest and volumes are likely to wane the next couple weeks.

Risk appetite is receding a bit at mid-week, following last week’s U.S.-China partial trade agreement. That deal has yet to be signed and there are many skeptics that wonder how China will be able to purchase $40 billion worth of agricultural products, which is about double the previous record-high annual China ag purchases from the U.S.

In overnight news, the Euro zone consumer price index for November was reported down 0.3% from October and up 1.0%, year-on-year, which was in line with trade expectations but still shows worrisomely low inflation in Europe.

The key “outside markets” today see the U.S. dollar index firmer. Greenback bulls are still on the defensive, however, after prices hit a 4.5-month low last week. Meantime, Nymex crude oil prices are weaker and trading around $60.50 a barrel after hitting a three-month high Tuesday.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, December 17–Jim Wyckoff’s Morning Markets Report

Asian stock indexes were mostly higher overnight, while European shares were mixed to weaker. The U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. U.S. and U.K. stock indexes hit record highs Monday amid keener risk appetite in the global marketplace following news of a partial U.S.-China trade agreement.

European shares were rattled Tuesday on news U.K. Prime Minister Boris Johnson intends to introduce legislation to bar extension of Brexit talks beyond one year, which many believe is not enough time for a “soft” Brexit. The British pound also fell on the news.

The key “outside markets” today see the U.S. dollar index firmer. Meantime, Nymex crude oil prices are near steady and trading around $60.25 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, new residential construction, industrial production and capacity utilization, and the IDB/TIPP economic optimism index.

–Jim

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The corn futures market has pushed higher recently, to negate a price downtrend on the daily bar chart. The corn bulls have momentum to suggest at least sideways trading in the near term–if not sideways to higher. A push in prices above solid resistance at $4.00 would give the bulls the technical power to suggest a price uptrend could be sustained in the coming weeks and months. Stay tuned!–Jim

Monday, December 16–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were higher overnight. The U.S. stock indexes are pointed toward higher openings and at or very near record highs when the New York day session begins. Risk appetite is keener to start the trading week as events last week cleared up a lot of uncertainty in the world marketplace. The U.S. and China have reached a partial trade deal, U.K. Prime Minister Boris Johnson won an election mandate on Brexit, and the U.S. reached a trading deal with its neighbors, Canada and Mexico.

China also got some upbeat economic data Monday, as its industrial output in November was up 6.2%, year-on-year, beating market expectations for a rise of 5.0%.

In other overnight news, the Euro zone composite purchasing managers index (PMI) came in at 50.6 in December, which was in line with market expectations. However, the manufacturing PMI was 45.9 versus expectations for a reading of 47.3 in the period. A reading below 50.0 suggests contraction in the sector. Germany’s manufacturing PMI came in at 44.1, also a miss to the downside.

The key “outside markets” today see the U.S. dollar lower. Meantime, Nymex crude oil prices are near steady and trading around $60.00 a barrel.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and new residential sales.

–Jim

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Friday, December 13–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were higher overnight. The U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. Risk is back on the table for traders and investors following reports the U.S. and China are very close to a partial trade deal, as was reported at midday Thursday, including a tweet from President Trump that implied a deal was imminent. However, the marketplace is now wondering why there is “radio silence” coming from Chinese officials Friday. Some media outlets in China were saying any deal that is agreed upon must be fair. Reports said the apparent partial trade deal involves China purchasing $50 billion of U.S. goods—mostly agricultural products—in 2020, in exchange for the U.S. not imposing new tariffs on Chinese imports into the U.S., and cutting in half the current tariffs in place.

The general election in the U.K. Thursday saw Prime Minister Boris Johnson and conservative policies score a solid victory. Johnson then proclaimed the U.K. will exit the European Union (Brexit) by the end of January. This has taken the Brexit uncertainty off the table, after such had been lingering for quite some time. U.K. stocks surged on the news, as did the British pound.

One feature in the markets late this week is rising global bond yields, as assets have moved from the safer-haven fixed income sector into stock markets.

The key “outside markets” today see the U.S. dollar solidly lower and hitting a nearly five-month low. Meantime, Nymex crude oil prices are higher and trading around $60.00 a barrel.

U.S. economic data due for release Friday includes retail sales, import and export prices, and manufacturing and trade inventories.

–Jim

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The U.S. dollar index is a basket of six major world currencies weighted against the greenback. Just this week, for the first time in months, the USDX bears have seized the overall near-term technical advantage. This has significant implications for other markets, including raw commodities (bullish), most of which are priced in U.S. dollars on the world market. Stay tuned!–Jim