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
Daily Morning Report
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
U.S. Stock Indexes All Bulled Up; More Upside Likely
The U.S. stock market bulls are on a roll as the major indexes this week hit contract and record highs and continue to see prices trend higher. The Nasdaq and S&P e-mini futures markets have recently seen bullish upside “breakouts” from sideways trading ranges at higher levels on the daily bar charts. This suggests another solid leg up in prices in the coming weeks, or longer. There are no early technical clues the U.S. stock indexes will peak out anytime soon. Remember, “the trend is your friend” in trading markets. Stay tuned!–Jim
U.S. Stock Market Hovers Near Record Highs at Mid-Week
Wednesday, November 6–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed in uneventful trading overnight. U.S. stock indexes are pointed toward steady to slightly higher openings when the New York day session begins.
Trader and investor risk appetite remains upbeat at mid-week, amid no major developments on the U.S.-China trade front and no geopolitical flare-ups. The sense of the marketplace now is that a partial U.S.-China trade deal will be signed soon. The Chinese currency, the yuan, hit a three-month high versus the U.S. dollar this week and dropped back below the key 7-per-dollar level, as Chinese traders also reckon a signed trade deal is close.
In overnight news, the Euro zone October services purchasing managers’ index (PMI) came in at 52.2 versus expectations for a reading of 51.8.
The Euro zone economic workhorse Germany got a better manufacturing report on Wednesday. September manufacturing orders were up 1.3% from August, which handily beat expectations for a rise of just 0.1%. However, manufacturing order in September were down 5.4% from the same time last year.
The key “outside markets” today see the U.S. dollar index weaker. Nymex crude oil prices are near steady and trading around $57.15 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, preliminary productivity and costs, the weekly DOE liquid energy stocks report, and the global services PMI.
–Jim
U.S.-China Trade Deal Inching Closer; Risk Aversion Low
Tuesday, November 5–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mostly up in trading overnight. U.S. stock indexes are pointed toward modest gains and new all-time highs when the New York day session begins.
Risk sentiment worldwide remains upbeat amid ideas the U.S. and China are very close to a partial trade deal, called “Phase 1.” There are reports China is now pushing the U.S. to roll back some more tariffs on Chinese imports, with the U.S. possibly agreeing to such to get the deal sealed.
In overnight news, the Euro zone September producer price index was reported up 0.1% from August and down 1.2%, year-on-year. The report is a reminder that very low inflation in most of the major world economies is still a problem.
The OPEC oil cartel has issued a report saying booming U.S. shale oil production will likely keep the cartel constraining its own oil output for at least the next five years. I have covered the energy markets for 35 years and the U.S. shale oil production technology coming on line about 10 years ago has been the most fundamentally game-changing development of all the markets I have followed the past three decades.
The key “outside markets” today see the U.S. dollar index slightly up. Nymex crude oil prices are higher and trading around $57.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the international trade report, the U.S. services PMI, the ISN non-manufacturing report, and the IBD/TIPP economic optimism index.
–Jim