Daily Morning Report

Thursday, October 17–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly up overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite among traders and investors is a bit more robust Thursday on reports the U.K. and the European Union have reached a deal for the U.K. to leave the EU (Brexit) under good conditions. The deal needs to be ratified by both governments’ parliaments, however.

The Brexit news is making for a strong rally in the British pound, which has hit a four-month high. The Brexit news also put pressure on safe-haven assets like gold.

Nymex crude oil prices are slightly lower and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index lower and hitting a six-week low overnight. The greenback is fading, due in part to some downbeat U.S. retail sales data released Wednesday that ups the odds of a Federal Reserve interest rate cut coming yet this year.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, industrial production and capacity utilization and the weekly DOE liquid energy stocks report.

–Jim

Continue Reading

Wednesday, October 16–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed but mostly weaker overnight. The U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Hopes for a U.S.-China trade deal, called Phase 1, are somewhat dimming at mid-week, along with investor and trader risk appetites, following last week’s meetings between the world’s two largest economies. No deal was signed last week and specifics of the Phase 1 agreement are missing.

In overnight news, the Euro zone consumer price index for September was up 0.2% from August and up 0.8%, year-on-year. Those numbers were about in line with market expectations and continue to show major world economies not battling inflation, but instead battling deflation.

The International Monetary Fund on Tuesday released a report that forecast global economic growth at 3% in 2019, down from a 3.2% growth rate forecast by the IMF in July. The IMF blamed global trade disputes for the slowing economic growth worldwide.

A feature in the markets this week is the strong rally in the British pound, which hit a four-month high Tuesday on ideas of a Brexit deal forthcoming, to avoid a no-deal Brexit. However, no formal agreement has been reached yet between the U.K. and the European Union. The pound was under some pressure Wednesday.

Nymex crude oil prices are firmer and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index near steady in early U.S. trading.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, the NAHB housing market index, manufacturing and trade inventories, Treasury international capital data, and the Federal Reserve’s beige book.

–Jim

Continue Reading

The gold market bulls have faded recently as a price downtrend line is in place on the daily bar chart. The bulls do have the overall chart advantage as prices are not that far below this year’s high. Still, bulls must negate the price downtrend in order to gain fresh technical power to then suggest a challenge of this year’s high, or above. Stay tuned!–Jim

Tuesday, October 15–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk aversion is not keen Tuesday despite traders and investors backing off on their initial upbeat assessment of the U.S.-China “Phase 1” trade agreement reached last week, and which has yet to be signed.

China’s trade war with the U.S. brought more dour news on China’s manufacturing front. The world’s second-largest economy saw its producer price index down 1.2% in September, year-on-year. Consumer price inflation rose 3% year-on-year in September, due to a surge in food prices at up 11%. The food rise was led by a more than 69% rise in pork prices due to the spreading African swine fever disease.

Germany’s economy got more downbeat data Tuesday. The closely watched ZEW survey current situation index fell to -25.3 in October versus -19.9 in September, and -23.6 as the consensus forecast. The ZEW survey expectations index was -22.8 in October compared to -22.5 in September and
-26.4 that was forecast.

Nymex crude oil prices are lower and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index slightly up in early U.S. trading.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the Empire State manufacturing survey.

–Jim

Continue Reading

Monday, October 14–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly weaker overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. The shine of Friday afternoon’s U.S.-China “Phase 1” trade agreement has quickly worn off. After having the weekend to ponder the matter traders and investors now reckon the agreement is fraught with potholes that are likely derail it. There are now reports China wants more talks before even signing the Phase 1 agreement. “The devil is in the details,” as the saying goes.

Also, the optimism expressed late last week regarding a U.K.-European Union agreement on Brexit has dimmed.

There was more dour economic news coming out of China to start the trading week. China’s exports to the U.S. dropped 22% in September, year-on-year. China’s total exports fell 3.2% in the month. China’s total imports in September were down 8.5%.

Gold prices are posting solid gains Monday, on safe-haven demand amid the dimmer view of last week’s U.S.-China trade talks progress and the weak China economic data.

Nymex crude oil prices are lower and trading around $53.50 a barrel today. The other key “outside market” sees the U.S. dollar index modestly up in early U.S. trading.

There is no major U.S. economic data due for release Monday.

–Jim

Continue Reading

The U.S. stock indexes have seen very choppy trading recently, including higher intra-day volatility. The near-term daily bar charts for the S&P e-mini and Nasdaq futures show very strong overhead resistance at the summertime highs. Technical odds suggests that strong chart resistance will turn back rally attempts in the near term. This also implies that trading in the U.S. stock indexes will remain choppy and sideways, or sideways to lower, into the end of the year. Stay tuned!–Jim