Daily Morning Report

Tuesday, December 10–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mostly weaker overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion has crept up early this week. Next Sunday (Dec. 15) is the deadline for the imposition of new tariffs on Chinese imports into the U.S. If those new tariffs are allowed by President Trump to go into effect, then the U.S.-China trade war would likely escalate and no partial trade deal would be in sight, most believe. The keener uncertainty as the deadline approaches is likely to keep market participants leery the rest of this week. There is no real consensus on what will happen before Sunday, which makes the marketplace even more cautious.

The U.S. economic highlight of the week is the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to make no changes in its monetary policy. The European Central Bank also meets on monetary policy Thursday.

The closely watched German ZEW current conditions index came in at -19.9 in December versus -24.7 in November. The expectations index was 10.7 in December compared to -2.1 in November. The expectations index was well above market expectations and was the best reading of the year.

The key “outside markets” today see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are slightly lower and trading around $59.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, revised productivity and costs, and the Manpower employment outlook survey.

–Jim

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Monday, December 9–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The world marketplace is seeing just a bit of risk aversion to start the trading week, following downbeat economic data coming out of China, the world’s second-largest economy. China’s exports fell 1.1% in November, year-on-year, including shipments to the U.S. declining 23% in the period. China’s exports were seen up 1.0% in November. Imports were up 0.3% in the same period, and were expected to be unchanged.

The U.S. economic highlight of the week is the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to make no changes in its monetary policy. The European Central Bank also meets on monetary policy Thursday.

Goldman Sachs is recommending investors buy some more gold in the coming months, due to stubbornly low global bond yields, the higher potential for stock market turbulence and the keener uncertainty of the 2020 U.S. presidential election.

The key “outside markets” today see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are lower and trading around $58.75 a barrel.

U.S. economic data due for release Monday is light and includes the employment trends index. The pace report picks up rapidly Tuesday and through the rest of the week.

–Jim

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The Nymex crude oil market remains in a nearly 2.5-month-old uptrend on the daily bar chart, to give the bulls the near-term technical advantage and to suggest the path of least resistance for prices will remain sideways to higher in the near term. However, it’s my bias that the oil market bulls will find tough sledding as prices push toward or just above $60.00 a barrel. Stay tuned!–Jim

Friday, December 6–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mostly up overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. European equities shrugged off a very downbeat report on German industrial production for October, which come in at down 1.7% from September and down 5.3%, year-on-year. That was the biggest drop in 10 years.

Traders are awaiting the U.S. economic data point of the week, if not the month: Friday morning’s employment situation report for November from the Labor Department. The key non-farm payroll number is expected to come in at up around 185,000 jobs. However, Wednesday’s ADP national employment report for November came in at up just 67,000 jobs, which was a big miss to the downside from market expectations for a rise of 150,000 and has many thinking Friday’s job’s number will be a downside miss, too. The overall unemployment rate is expected to remain at a recent historical low 3.6%. Look for more active markets in the immediate aftermath of today’s jobs report—especially if it’s a big miss.

The OPEC oil cartel is meeting late this week and is expected to continue to limit its crude oil production in an effort to keep prices propped up. Crude oil prices have rallied this week on those expectations.

Another markets feature this week is a rally in the British pound to a multi-month high, on notions the U.K. citizens will next week in the general election produce a win for Prime Minister Boris Johnson and his Conservative party.

The key “outside markets” today see the U.S. dollar index slightly up. The USDX hit a four-week low Thursday and the greenback bulls are fading. Meantime, Nymex crude oil prices are near steady and trading around $58.35 a barrel.

Other U.S. economic data due for release Friday includes monthly wholesale trade, consumer credit and the University of Michigan consumer sentiment survey.

–Jim

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Thursday, December 5–Jim Wyckoff’s Morning Markets Report

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

Amid a continued lack of other major, markets-moving news in the global marketplace, traders and investors remain fixated on the U.S. and China trade war and the negotiations to end it. December 15 looms as the next inflection point for the trade talks between the world’s two largest economies. Chinese officials said Thursday there will retaliation if the U.S. imposes more tariffs on Chinese imports into the U.S. at that time. The marketplace late this week remains mostly upbeat on prospects for a partial trade deal, but if recent history repeats itself the prospects will soon dim.

In other overnight news, the Euro zone reported its third-quarter gross domestic product up 0.2% from the second quarter and up 1.2%, year-on-year, which was right in line with market expectations but still paints a picture of a lukewarm-at-best Euro zone economy. Germany’s manufacturing orders were on Thursday reported down 0.4% in October and down 5.5% annually. Germany is the economic workhorse for the Euro zone.

Traders are awaiting the U.S. economic data point of the week: Friday’s employment situation report from the Labor Department. The key non-farm payroll number is expected to come in at up around 185,000 jobs. Wednesday’s ADP national employment report for November came in at up just 67,000 jobs, which is a big miss to the downside from market expectations for a rise of 150,000 and has many thinking Friday’s job’s number will be a downside miss, too.

The key “outside markets” today see the U.S. dollar index weaker. The USDX hit a four-week low Wednesday and the greenback bulls are fading. Meantime, Nymex crude oil prices are slightly higher and trading around $58.50 a barrel. The OPEC oil cartel is meeting today and is expected to continue to keep production quotas in place to try to keep oil prices propped up.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, monthly chain store sales, and manufacturers’ orders and shipments.

–Jim

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The S&P March e-mini stock index futures hit a record and contract high on Monday. However, the early-week downside reversal produced a significantly bearish “key reversal” down on the daily bar chart, which is one technical clue that a near-term market top is in place. The bulls do still have the overall near-term technical advantage and can negate the bearish key reversal with more price gains yet this week. Stay tuned!–Jim