Daily Morning Report

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

Monday, December 2–Jim Wyckoff’s Morning Markets Report

Asian 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, and are at or near their record and contract highs. Trader and investor risk appetite is upbeat to start the trading week, on some positive economic data coming out of China and on hopes for a partial U.S.-China trade deal coming soon.

For the first time in seven months factory activity in China saw expansion. The purchasing managers’ index (PMI) rose to 50.2 in November versus 49.3 in October, and was expected to come in at 49.5. A reading above 50.0 suggests growth in the sector.

Meantime, the Euro zone manufacturing PMI came in at 46.9 in November versus 45.9 in October. A reading of 46.6 was expected for November.

The upbeat manufacturing data coming out of China and the Euro zone—the number two and three economies in the world—worked to lift world equity markets and crude oil prices Monday, but put pressure on safe-haven assets gold and U.S. Treasury markets.

President Trump has just tweeted Monday morning that the U.S. will slap some more tariffs on South American countries he says are trading unfairly with the U.S.

The key “outside markets” today see the U.S. dollar index modestly up. Nymex crude oil prices are higher and trading around $56.50 a barrel.

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, the ISM manufacturing report on business, construction spending, and the global manufacturing PMI.

–Jim

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Asian and European stock markets were mostly weaker overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, after setting record and contract highs Wednesday. Today is typically one of the lowest-volume days of the year for the U.S. stock market.

There is a bit of concern in the world marketplace late this week after President Trump late Wednesday signed a bill supporting Hong Kong’s anti-government protestors. Traders and investors are unsure how China is going to react, especially given that the U.S. and China had appeared very close to signing a partial trade deal. Such may still be the case, but maybe not, either.

In overnight news the Euro zone jobless rate came in at 7.5% in October versus 7.6% in September. The Euro zone consumer price index in November was up 1.0%, year-on-year, versus a reading of up 0.7% in October.

The key “outside markets” today see the U.S. dollar index slightly up. Nymex crude oil prices are near steady and trading around $58.00 a barrel.

There is no major U.S. economic data due for release Friday and some financial and commodity markets close early due to the Thanksgiving holiday on Thursday.

–Jim

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Wednesday, November 27–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed overnight, with European shares mostly up and Asian shares mostly down. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, after setting more record and contract highs overnight. Trading in the U.S. Wednesday will really taper off as the session progresses, ahead of the U.S. Thanksgiving holiday on Thursday.

There is still little risk aversion in the marketplace at present, amid notions the U.S. and China are moving ever closer to a partial trade deal, and as there are no geopolitical flare-ups that are spooking traders and investors. The stock markets worldwide are also benefitting from a very low inflationary environment that makes investing in stocks about the only game in town.

In overnight news, China’s industrial profits fell by the most on record in October—down 9.9%, year-on-year. China’s producer price index was down 1.6% in October, which continues to point to worrisomely low global inflation.

The key “outside markets” today see the U.S. dollar index slightly up. Nymex crude oil prices are firmer and trading around $58.50 a barrel.

It’s a busy day for U.S. economic data Wednesday, as due out include the weekly MBA mortgage applications survey, the second estimate of third-quarter gross domestic product, personal income and outlays, the weekly DOE energy report, the Federal Reserve’s beige book, durable goods orders and the weekly jobless claims report.

–Jim

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