Daily Morning Report

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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The Euro currency bears remain in solid near-term technical control as prices are not far above the recent lows and are starting to trend lower again. The path of least resistance for the Euro currency futures prices remains sideways to lower. Stay tuned!

Tuesday, November 26–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly flat overnight and the U.S. stock indexes are also pointed toward near steady openings when the New York day session begins, after setting new record and contract highs overnight. Trading in the U.S. Tuesday will begin to taper off ahead of the U.S. Thanksgiving holiday on Thursday.

Global trader/investor risk appetite remains upbeat Tuesday, following reports that the top trade negotiators from the U.S. and China held a telephone conversation Monday, with the Chinese press reporting the two sides had “reached a consensus on properly resolving latest issues.”

Federal Reserve Chairman Jerome Powell gave a speech Monday evening, in which he said the Fed lowered interest rates this year because the U.S. economy was not performing as strongly as expected, but implied there will be no further rate cuts unless the economy showed unexpected weakness.

A report Tuesday said consumer demand for gold from its two largest consuming nations—China and India—is declining. The report said weaker local currencies have made gold more expensive for consumers to purchase, including increased duties from India’s government.

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

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, advance economic indicators, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, the consumer confidence index, and new residential sales.

–Jim

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Monday, November 25–Jim Wyckoff’s Morning Markets Report

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

Trader and investor risk appetite is more upbeat to start the trading week on news that China says it will step up its efforts to protect intellectual property rights. That is a key element the U.S. wants China to reform in order to reach a trade deal. It could be that the U.S.’s hard-line approach on the trade deal with China is putting pressure on China to get a deal completed soon.

In other overnight news, Goldman Sachs issued a report that said raw commodity prices will rise in 2020 and for the next decade due to a worldwide move to “decarbonize” the planet, including less investment in carbon-based industries. That scenario would lead to supply shortages of some key commodities, the report said.

Reuters has reported gold worth billions of dollars is being smuggled out of Africa via the United Arab Emirates. The report said the UAE imported just over $15 billion in gold from Africa in 2016. Reuters compared total imports from the UAE with the exports declared by African states which showed that gold was entering the UAE through unknown sources. Furthermore, industrial mining firms in Africa told Reuters they did not send their gold to the UAE. From 2006 to 2016, African gold in UAE’s gold imports increased from 18% to 50%, despite no big industrial firm saying they send their gold there.

The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $57.75 a barrel.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

–Jim

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Friday, November 22–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed overnight and the U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.

Amid a quieter geopolitical front recently, trader and investor focus remains on the U.S.-China trade war and ongoing negotiations between the world’s two largest economies. Late this week the tenor is mixed, highlighted by Chinese Premiere Xi saying China will “fight back” on trade if the U.S. imposes more tariffs on China’s products. Yet, reports from China also say trade officials, including Xi, want to get a deal done, with Xi saying he does not want a trade war. Reports Thursday said Chinese trade officials invited U.S. trade officials to China for more talks in the near term. This pattern of optimism and then pessimism on trade-talks progress continues.

In other overnight news, the German October manufacturing purchasing managers index (PMI) came in at 43.8, which was a bit better than expected but still well below the 50.0 level, indicating contraction in the sector.

The key “outside markets” today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $58.25 a barrel. Oil prices hit a two-month high on Thursday.

U.S. economic data due for release Friday includes the U.S. flash manufacturing and services purchasing managers indexes, the Federal Reserve Kansas City manufacturing survey, and the University of Michigan consumer sentiment survey.

–Jim

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