The Nymex crude oil futures market sees December prices trending higher from the October low. Bulls have the near-term technical advantage. However, it’s my bias that barring a major geopolitical shock in the Middle East the market will trend sideways and choppy in the coming weeks, or longer–and that the upside is limited. Reason: A U.S. energy official said this week U.S. shale oil production will reach 13 million barrels a day. That’s a huge (and bearish!) number. U.S. shale oil production the past several years has been a game-change on the world crude oil front. Stay tuned!–Jim
Daily Morning Report
Still Not a Lot of Risk Aversion in Marketplace Tuesday; Trump Speech Awaited
Tuesday, November 12–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly up overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Risk aversion in the world marketplace remains low.
There have been no new developments on the U.S.-China trade war front the past few days. However, President Trump on Tuesday will give a speech to the New York Economic Club that is likely to provide some fresh insight on Trump’s intentions on the matter. Trump last Friday sounded a bit less upbeat on the U.S.-China trade front, saying talks were going “very nicely” but adding the U.S. is not rolling back all of the import tariffs on Chinese products. Over the weekend Trump said China needs a trade deal completed way more than the U.S. needs it.
The civil unrest in Hong Kong has escalated in recent days. Some reports are saying the city is now on the verge of shutting down. One protester was shot by police over the weekend and another man was set on fire by protesters. This situation could flare up into a major geopolitical event very quickly if mainland China gets more involved in the matter.
In other overnight news, Federal Reserve Vice Chairman Richard Clarida said very low global inflation levels are presenting problems for the world’s major central banks, including their ability to stimulate economic growth.
The key “outside markets” today see the U.S. dollar index higher. Nymex crude oil prices are firmer and trading around $57.25 a barrel. A U.S. Energy Department official said U.S. shale oil production will reach 13 million barrels per day in December.
U.S. economic data due for release Tuesday includes the NFIB small business index, and the Goldman Sachs and Johnson Redbook retail sales reports.
–Jim
World Stock Markets Mostly Down in Quieter Trading Monday
Monday, November 11–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed to mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. government is closed today, as is the cash U.S. Treasury market, for the Veterans Day holiday.
The civil unrest in Hong Kong escalated over the weekend. That has Asian equity markets more uneasy.
There were no new developments on the U.S.-China trade war front over the weekend. President Trump on Friday sounded a bit less upbeat on the situation than news reports were suggesting late last week. Still, Trump said the trade talks were going “very nicely” but added the U.S. is not rolling back all of the import tariffs on Chinese products.
The key “outside markets” today see the U.S. dollar index lower. Nymex crude oil prices are lower and trading around $56.35 a barrel.
There is no U.S. economic data due for release Monday as the government is closed for a holiday.
–Jim
U.S. Treasury Yields on the Rise
The U.S. Treasury bond and note futures markets late this week hit three-month lows in price (rising yields) amid a rally in the U.S. dollar index and new record highs in U.S. stock indexes. The T-Bond and T-Note futures markets are now in near-term price downtrends on the daily charts, to suggest still some more price pressure in the near term. Stay tuned!–Jim
World Stock Markets Pause as U.S.-China Trade Deal May Not Be So Close
Friday, November 8–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed to mostly weaker overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Traders and investors on this day are not quite so confident the U.S. and China are close to signing a partial trade deal. Now reports are saying there is heavy resistance among some inside the Trump administration to acquiesce to China by rolling back trade tariffs on Chinese imports to the U.S. One Trump trade official late Thursday said there is still no agreement in place and the ultimate decision lies with the mercurial President Trump. Much of this week had seen global equity markets in rally mode on notions of a soon-completed “Phase 1” of the U.S.-China trade agreement.
In overnight news, China’s October exports fell 0.9% year-on-year, which was better than the 3.1% drop expected. China’s imports were down 6.4% in October, year-on-year, while a drop of 8.6% was forecast.
A feature in the marketplace this week besides record highs in the U.S. stock indexes is rising U.S. bond yields, which hit a three-month high on Thursday.
The key “outside markets” today see the U.S. dollar index up and at a three-week high. Nymex crude oil prices are lower and trading around $56.15 a barrel.
U.S. economic data due for release Friday includes monthly wholesale trade and the University of Michigan consumer sentiment survey.
–Jim
World Stock Markets Boosted by More Positive News on U.S.-China Trade Front
Thursday, November 7–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly up overnight. U.S. stock indexes are pointed toward higher openings and more record highs when the New York day session begins.
Trader and investor risk appetite remains elevated as the news from the U.S.-China trade front remains very upbeat. Reports from China Thursday said both countries have agreed to remove their tariffs in tranches. The report said tariffs would be eliminated once the “Phase 1” partial trade deal is signed. There has been no official word from the U.S. on this development. While it is a positive, the trade deal still has to be signed. And remember, the trade negotiations between the world’s two largest economies have been a continuously up-and-down affair regarding progress. Given this history it seems unlikely both nations will now just cruise to the finish line with a trade deal.
The Chinese yuan continued to strengthen against the U.S. dollar on the trade-deal optimism.
The Bank of England is holding its regular monetary policy meeting Thursday, but no change in interest rates is expected.
In other overnight news, the European Union lowered Euro zone economic growth in 2019 to 1.1% from 1.2% previously forecast. The EU sees 2020 and 2021 growth at 1.2%.
The key “outside markets” today see the U.S. dollar index weaker. Nymex crude oil prices are higher and trading around $57.00 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, consumer credit and the monthly chain store sales index.
–Jim