Daily Morning Report

Monday, September 9–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor risk appetite remains elevated to start the trading week. News Friday that China’s central bank eased its monetary policy and reports over the weekend that the U.K. appears to be avoiding, for now, a “hard Brexit,” have most of the world marketplace in an upbeat mood.

There was a Dow Jones Newswires report over the weekend that said China’s official economic numbers are probably not accurate and likely are overly hyped by the government. The report said China’s overall economic growth (gross domestic product) is probably about half of what the official numbers say, or actually around 3%, annual growth. This news is not surprising to many market watchers.

There were protesters demonstrating in Hong Kong again over the weekend. However, the markets are not now deeming the protests as an escalation in the overall situation.

The key “outside markets” today see Nymex crude oil prices firmer and trading around $57.00 a barrel. The U.S. dollar index is slightly weaker in early U.S. trading today.

U.S. economic data due for release Monday includes the employment trends index and consumer credit.

–Jim

Continue Reading

Friday, September 6–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor risk appetite has markedly improved this week, which has pushed the U.S. stock indexes back toward their summertime highs.

The August U.S. employment situation report from the Labor Department is on deck Friday morning. The key “non-farm” payrolls component of the report is expected to show a gain of 150,000 in August. A miss on the consensus forecast is likely to move many markets.

Protesters are set to demonstrate in Hong Kong again this weekend, reports said. This week Hong Kong’s leader withdrew from consideration a proposed law that would have allowed the extradition of Hong Kong citizens to mainland China for criminal trials. Right now it appears doubtful the reversal of Hong Kong’s leader on the extradition matter will be enough to stop the civil unrest. Now, protesters are calling for more change, including Hong Kong’s leader stepping down. Importantly, the Fitch credit rating agency has just downgraded its main rating on Hong Kong.

The Brexit saga 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. He said Thursday he’d “rather be dead in a ditch” than extend Brexit negotiations. However, votes this week from Parliament appear to have defeated his “hard” Brexit stance. The matter continues to unsettle European markets.

China’s central bank moved to again ease its monetary policy Friday by lowering the reserve requirement ratio for banks.

The Euro zone second-quarter GDP on Friday came in unrevised at up 0.2% from the first quarter, and was up 1.2%, year-on-year.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $55.75 a barrel. The U.S. dollar index is firmer today.

There is no other U.S. economic data due for release Friday. Federal Reserve Chairman Jerome Powell does deliver a speech in Zurich, Switzerland later Friday.

–Jim

Continue Reading

The December e-mini S&P futures on Thursday pushed to a five-week high and produced a bullish upside “breakout” from the choppy trading range seen on the daily bar chart. The breakout suggests more gains are likely in the near term, including a challenge of the contract high scored in late July. Still, traders know we are now into the historically turbulent months of September and October, which could mean more daily price volatility. Stay tuned!–Jim

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

Continue Reading

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

Continue Reading

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