Daily Morning Report

Thursday, September 5–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Traders and investors around the globe got another attitude-booster Thursday when China’s commerce ministry said trade talks with the U.S. will restart in Washington, D.C. in October. U.S. trade officials confirmed high-level talks will take place at that time. There were notions earlier this week the China-U.S. trade war had escalated recently. As has been the case for months, this situation vacillates from one day to the next, depending on the latest rhetoric coming from the world’s two largest economies. Most market watchers are not optimistic a U.S.-China trade deal will be reached this year.

While markets on Wednesday were relieved Hong Kong’s leader withdrew from consideration a proposed law that would allow the extradition of Hong Kong citizens to mainland China for criminal trials, reports Thursday said more protests are planned in the coming days. Right now it appears doubtful the reversal of Hong Kong’s leader on the extradition matter will be enough to quell the civil unrest.

Meantime, the Brexit turmoil continues as the October deadline for a U.K. deal with the European Union approaches. Prime Minister Boris Johnson wants out with no extension of time to reach a “soft” Brexit. However, votes this week from Parliament appear to have defeated his “hard” Brexit stance—at least for now. This news has boosted the British pound off its 34-year low against the U.S. dollar, reached earlier this week.

The key “outside markets” today see Nymex crude oil prices near steady and trading around $56.00 a barrel. The U.S. dollar index is lower on a normal downside correction after hitting a 27-month high Monday.

A very heavy slate of U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ADP national employment report, revised productivity and costs, the ISM non-manufacturing report on business, the U.S. services and the global services PMIs, monthly chain store sales, the weekly DOE liquid energy stocks report, and manufacturers’ shipments and inventories.

With all the activity on a U.S.-holiday-shortened trading week, the marketplace almost forgot about the August U.S. employment situation report from the Labor Department that is out Friday morning. The key “non-farm” payrolls component of the report is expected to show a gain of 150,000 in August.

–Jim

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Wednesday, September 4–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Traders and investors around the globe were cheered today when Hong Kong’s leader withdrew from consideration a proposed law that would allow the extradition of Hong Kong citizens to mainland China for criminal trials. This proposed new law had been one of the reasons for the major protesting seen in Hong Kong the past few months. However, it’s too early to determine if this reversal of Hong Kong’s leader on the matter will be enough to quell the civil unrest.

The China-U.S. trade war remains on the front burner of the world marketplace, and has escalated in recent days.

The leader of the International Monetary Fund, Christine Lagarde, said Wednesday the European Central Bank needs an accommodative monetary policy for a period of time due to threats on the horizon. This comes after the Euro zone reported its retail sales for July fell 0.6% from June.

Meantime, the U.K. economy could be tipping into recession amid the Brexit turmoil. Purchasing managers’ data for August, released today, was weaker than in July. The British pound this week hit a more-than-30-year low against the U.S. dollar.

The key “outside markets” today see Nymex crude oil prices higher and trading around $54.50 a barrel. The U.S. dollar index is lower on a normal downside correction after hitting a 27-month high Monday.

U.S. economic data due for release Wednesday includes the Federal Reserve’s beige book, weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade report, the ISM New York report on business, and the IDB-TIPP economic optimism index.

–Jim

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The U.S. dollar index this week has surged to a 27-month high, as several geopolitical “hot spots” are keeping traders and investors worldwide on edge, and also seeking the safe-haven security of the greenback. The strong dollar at present is also suggesting the world marketplace is expecting keener turbulence in markets during what have historically been the more volatile months of September and October. Stay tuned!–Jim

Asian and European stock markets mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. Risk aversion is back in the marketplace early this week, amid geopolitical matters that continue to simmer.

China over the weekend filed a complaint with the World Trade Organization against the U.S. and its tariffs imposed on China. This move appears to ratchet up the trade war between the world’s two largest economies. The Chinese yuan dropped to an 11-year low against the U.S. dollar overnight, at near 7.2 to the dollar. The weaker yuan makes Chinese goods less expensive in U.S. dollar terms.

Civil unrest continues high in Hong Kong after another weekend of protesting. Reports said Hong Kong authorities are now considering declaring a state of emergency.

The British pound fell to a 34-year low against the greenback today amid turmoil in the U.K. over the British exit from the European Union (Brexit). The U.K. is presently set to leave the EU in October. New Prime Minister Boris Johnson is battling with his own party on the matter, as Johnson wants out of the EU in October, with no more extensions to negotiate a “soft” Brexit.

Meantime, Australia’s central bank held its interest rates steady today at its regular monetary policy meeting, but said future interest rate cuts could occur.

The key “outside markets” today see Nymex crude oil prices down and trading around $54.25 a barrel. The U.S. dollar index is solidly higher and hit a 27-month high overnight.

U.S. economic data due for release Tuesday includes the U.S. manufacturing purchasing managers’ index (PMI), the ISM manufacturing report on business, the IDB/TIPP economic optimism index, the global manufacturing PMI, and construction spending.

–Jim

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Friday, August 30–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, following strong gains posted Thursday. Risk appetite has increased late this week on notions the U.S.-China trade war may have ratcheted down a bit after reports surfaced out of China Thursday that the nation says it is not interested in escalating the trade war with the U.S. and that both countries are still in communication on the matter. Still, new U.S. tariffs on China kick in on Sunday.

In overnight news, the Euro zone consumer price index for August came in at up 1.0%, year-on-year, which was in line with market expectations but still underscores the very low and even problematic inflation currently in place for most of the world’s major economies.

The key “outside markets” today see Nymex crude oil prices down and trading around $56.00 a barrel. The U.S. dollar index is slightly firmer.

Today is the last trading day of the week and of the month. That makes it an extra important trading day from a charts perspective. Weekly or monthly high or low closes are significant technical signals.

U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.

–Jim

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The silver market has gained around $1.50 in less than two weeks, amid an accelerating price uptrend on the daily bar chart. The bulls are powerful and looking for more on the upside in the near term. Safe-haven demand and technical buying are featured in silver. The bulls are licking their chops, knowing that the longer-term charts show there is a whole lot of room on the upside if prices continue to trend higher. Stay tuned!–Jim