Daily Morning Report

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

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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

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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

Friday, October 11–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Risk appetite is upbeat to end the trading week. The U.S.-China trade talks appeared to have gone well this week in Washington, D.C. President Trump will meet today with China’s Vice Premiere Liu He, signaling at least a partial trade deal is close. News services are also reporting a trade deal between the world’s two largest economies is close at hand.

Also a positive for the marketplace and especially the Europeans are reports the U.K. and European Union are making some progress to avoid a “hard” Brexit that would disrupt European financial markets.

Traders worldwide are taking note of reports Iran says one of its oil tankers was attacked by missiles in the Red Sea, which is close to Saudi Arabia. That helped to push oil prices higher.

Nymex crude oil prices are higher and trading around $54.50 a barrel today. The other key “outside market” sees the U.S. dollar index modestly down in early U.S. trading.

U.S. economic data due for release Friday includes import and export prices, and the University of Michigan consumer sentiment survey. Several Federal Reserve officials are also scheduled to speak today.

–Jim

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Thursday, October 10–Jim Wyckoff’s Morning Markets Report

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

Traders and investors are awaiting the latest word coming from the trade talks between the U.S. and China that are taking place in Washington, D.C. Many were surprised that China trade officials even showed up for the negotiations after the U.S. hit China with new sanctions earlier this week. And there is also talk of a limited deal that might be struck between the two nations. As has been the case for many months, the trade talks are very fluid and a tweet from President Trump could change the whole tenor of the situation.

The U.S. data point of the day is the consumer price index report for September, which is expected to come in up 0.1% from August and up 1.8%, year-on-year.

Nymex crude oil prices are near steady and trading around $52.50 a barrel today. The other key “outside market” sees the U.S. dollar index down in early U.S. trading.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and monthly chain store sales.

–Jim

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The grain market bulls have made a comeback the past few weeks, with price uptrends in place for corn, soybeans and soft red winter wheat futures. It appears that seasonal or “harvest lows” are in place for the grains, and that prices can now work sideways to higher into the end of the year. Stay tuned!–Jim