Daily Morning Report

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

Wednesday, December 4–Jim Wyckoff’s Morning Markets Report

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

Amid a lack of other major news developments trader and investor focus remains on the rhetoric coming from the U.S. and China regarding their trade negotiations. For whatever reason, the marketplace at mid-week is more upbeat than Tuesday, on the chances for a trade agreement soon between the world’s two largest economies. It’s hard to imagine the two sides reaching a substantive trade deal soon, given comments coming from both sides. And the U.S. House of Representatives passed a bill late Tuesday requiring U.S. punishment of Chinese officials involved in the repression of Uighur Muslims in the country. China quickly vowed retaliation.

In overnight news, the Eurozone composite purchasing managers’ index (PMI) for November came in at 51.9 versus the consensus forecast for a reading of 51.5. A number above 50.0 suggests expansion.

The key “outside markets” today see the U.S. dollar index near steady. Nymex crude oil prices are higher and trading around $56.80 a barrel.

The U.S. economic data point of the week is 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.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. services PMI, the ISM non-manufacturing report on business, the global services PMI, and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, December 3–Jim Wyckoff’s Morning Markets Report

Asian equities were mixed and European stock markets were mostly lower overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk appetite has again been dented Tuesday following President Trump’s remarks in London, regarding a partial U.S.-China trade deal. Trump said there is no timetable on even a partial deal and implied any deal could come after next year’s U.S. presidential election. “In some ways, it may be better to wait until after the election,” said Trump. Trump on Monday threatened Brazil and Argentina with trade tariffs and on Tuesday did the same to France.

In other overnight news, the Euro zone producer price index in October rose 0.1% from September and was down 1.9%, year-on-year. That’s yet another worrisomely low inflation report coming from the world’s third-largest economy.

For the gold and silver market bulls awaiting a geopolitical development to boost safe-haven demand for their metals, here is one possibility: Reports overnight said Iran is in its deepest economic slump in 30 years and is now facing a serious cash crunch and is in “economic peril.” Iran’s dire predicament could prompt the country’s leaders to lash out with its military against its enemies that include the U.S. Destabilizing the Persian Gulf region would be one way Iran could retaliate against crippling economic sanctions that have been in place from the U.S. and the West.

The key “outside markets” today see the U.S. dollar index near steady. Nymex crude oil prices are higher and trading around $56.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business and domestic auto industry sales.

–Jim

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The Nymex crude oil futures bulls have the very slightest near-term technical advantage as they work to keep an uptrend alive on the daily bar chart. Still, price action has been sideways and the bulls will have to push prices above the resistance line seen on the chart to gain fresh power, and the bears will have to push prices below the support line to do the same. Stay tuned!–Jim