Daily Morning Report

Thursday, October 24–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Focus in the U.S. stock market is on a heavy slate of corporate earnings reports this week.

The European Central Bank is holding its regular monetary policy meeting Thursday, which is the last one for outgoing ECB chief Mario Draghi. No major changes in ECB monetary policy is expected at this meeting.

The central bank of Indonesia cut its interest rates today, with Turkey expected to do the same today. The central banks of Sweden and Norway held their interest rates steady at meetings today.

The Euro zone October composite purchasing managers index (PMI) came out at 50.2, which was slightly below expectations. The manufacturing PMI in October was 45.7. A reading below 50.0 suggests contraction in the sector. Germany, the workhorse of the Euro zone economy, had a manufacturing PMI reading of 41.9 in October.

The key “outside markets” today find Nymex crude oil prices weaker in early U.S. trading today and trading around $55.50 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce from recent selling pressure that drove the index to a nine-week low earlier this week.

U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders, the U.S. flash manufacturing and services PMIs, new residential sales and the Kansas City Fed manufacturing survey.

–Jim

Continue Reading

The Nymex crude oil futures market has stabilized and rebounded a bit from strong chart support levels below the market. This suggests prices in the coming weeks will likely chop in a sideways range–barring a major geopolitical event in the Middle East that would spike prices higher for at least a short period of time. Longer-term, I see crude oil prices trading in a range between $50 and $60 in the coming months, or longer. Stay tuned!–Jim

Wednesday, October 23–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed but mostly weaker overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Caterpillar reported a big earnings miss to the downside this morning, which is pressuring U.S. stock indexes.

The Brexit uncertainty is still weighing on European equities and even some global stock markets, to a lesser degree. The British Parliament is wrangling with U.K. Prime Minister Boris Johnson on the timing of the U.K. leaving the European Union. Johnson wants a resolution to the matter and a Brexit sooner. Parliament is divided on the topic. Right now, October 31 is the official Brexit date.

The Indian Diwali festival begins Friday. Gold demand from Indian consumers usually rises during the festival. However, reports say Indian consumer gold demand could decrease up to 50% this year due to higher gold prices and an increase the country’s gold import duty.

The key “outside markets” today find Nymex crude oil prices higher in early U.S. trading today and trading around $54.20 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce from recent selling pressure that drove the index to a nine-week low earlier this week.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the monthly house price index and the weekly DOE liquid energy stocks report.

–Jim

Continue Reading

Tuesday, October 22–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. U.S. stock indexes are close to their all-time highs scored earlier this year.

Trader and investor attitudes worldwide remain generally upbeat early this week. The U.S.-China trade negotiations appear to be progressing. President Trump said Monday afternoon the talks are “coming along very well,” suggesting a trade agreement between the world’s two largest economies could be signed as early as next month.

The Brexit situation remains in limbo this week, after a hoped-for weekend deal between the U.K. and the European Union fell through. The British Parliament is moving to again delay a vote to seal the Brexit deal. U.K. Prime Minister Boris Johnson wants a resolution to the matter sooner. The uncertainty of the matter is prompting some risk aversion from European traders.

European Union officials have warned five countries about the EU budget constricts not being met, which is also causing some concern among European market watchers.

A heavy slate of U.S. corporate earnings reports this week is the focus of U.S. stock market traders, amid no fresh geopolitical flare-ups at present.

The key “outside markets” today find Nymex crude oil prices firmer in early U.S. trading today and trading around $53.50 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce from recent selling pressure that drove the index to a nine-week low on Monday.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales report, the Richmond Fed business survey, and existing home sales.

–Jim

Continue Reading

The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart for the USDX that prices are selling off rapidly and a price uptrend has been firmly negated. Serious near-term technical damage has been inflicted on the dollar index to suggest still more downside price pressure in the near term. Stay tuned!–Jim

Friday, October 18–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly down overnight, led by sharp losses in China stock indexes. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

World equity markets were pressured on news that China’s gross domestic product in the third quarter grew by 6.0% on an annual basis, which is the slowest pace in at least 27 years. The GDP 3Q figure was forecast at up 6.1%. On the positive side, China’s industrial production in September was reported up 5.8%, year-on-year, versus expectations for a rise of 4.9%.

The upbeat Brexit news this week has made for a strong rally in the British pound, which hit a four-month high. The U.K. Parliament will vote this weekend to ratify the agreement.

Nymex crude oil prices are firmer in early U.S. trading Friday and trading around $54.25 a barrel. The other key “outside market” sees the U.S. dollar index slightly lower. The greenback is fading, due in part to some downbeat U.S. economic data released this week that ups the odds of a Federal Reserve interest rate cut coming yet this year.

U.S. economic data due for release Friday includes leading economic indicators. Several Federal Reserve officials will also give speeches today, which will be closely monitored by the marketplace.

–Jim

Continue Reading