Daily Morning Report

Friday, August 23–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

The economic highlight of the week occurs Friday morning at 10:00 a.m. EDT when Federal Reserve Chairman Jerome Powell is scheduled to give a speech at the Kansas City Fed’s symposium in Jackson Hole, Wyoming. The Fed was deemed by the marketplace to be leaning significantly easy on their monetary policy, until late this week. Comments from Fed officials at the Jackson Hole confab appear to be walking back notions the Fed will embark on a series of interest rate cuts in the coming months. Traders hope Powell will provide more clarity on the Fed’s monetary policy intentions.

Traders and investors are wondering how the weekend will turn out, regarding civil unrest in Hong Kong. An escalation in the situation would significantly impact markets and prompt risk aversion early next week. So far this week, risk aversion has receded from levels seen the past couple weeks.

There is also a Group of Seven meeting in France over the weekend.

The key “outside markets” today see Nymex crude oil prices slightly lower and trading around $55.25 a barrel. The U.S. dollar index is higher and at a new high for the week.

U.S. economic data due for release Friday includes new residential sales.

–Jim

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Thursday, August 22–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Some risk aversion has returned to the marketplace amid new tensions between China and the U.S. China said it would sanction U.S. firms involved in a sale of U.S. fighter jets to Taiwan.

The Chinese yuan further depreciated against the U.S. dollar Thursday, trading around 7.085 and at the weakest level in 11 years.

Purchasing managers’ surveys from Australia and the Euro zone were downbeat today. The Eurozone manufacturing purchasing managers index (PMI) came in at 47.0 in August. A reading below 50.0 suggests contraction in the sector. Importantly, Germany, the workhorse for the Euro zone, saw its manufacturing PMI at only 43.6 in August.

Traders today are awaiting the minutes of the July meeting of the European Central Bank. The annual Federal Reserve Jackson Hole symposium gets under way today, too. Fed Chairman Jerome Powell is set to give a speech at the confab on Friday. The Fed and the ECB are leaning easy on their monetary policies.

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

U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash manufacturing and services PMIs, leading economic indicators and the Kansas City Fed manufacturing survey.

–Jim

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The Nymex crude oil market has rebounded from the August low, but is still in a price downtrend on the daily bar chart. If the bulls can push prices above chart resistance at the $58.00 level the price uptrend would be broken and the bulls would then set their sights on price levels in the $60s. If the downtrend remains in place and holds, prices would likely drift back down into the low $50s. Stay tuned!–Jim

Wednesday, August 21–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins.

Trader and investor sentiment remains positive at mid-week. President Trump and his administration are on the offensive this week, saying the U.S. is not headed for economic recession. There are rumors swirling around Washington, D.C., that the Trump administration is considering cutting taxes again. Trump confirmed he is considering tax cuts as a way of keeping the U.S. economy strong.

The European marketplace took in stride the resignation late Tuesday of Italian Prime Minister Giuseppe Conte.

The U.S. economic data point of the week so far will be Wednesday afternoon’s release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC), which took place July 30-31. Market watchers want to see if the minutes contain any clues on the timing and number of future interest rate cuts.

The key “outside markets” today see Nymex crude oil prices firmer and trading around $56.75 a barrel. The U.S. dollar index is slightly higher.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, August 20–Jim Wyckoff’s Morning Markets Report

Global stock markets were steady to firmer in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.

Trader and investor attitudes remain generally upbeat Tuesday. However, is this just a reprieve before the keener uncertainty and anxiety returns to the world marketplace? Slowing world economic growth, geopolitics that sees some hotspots and worrisomely low global inflation are all still lingering, heading into what can be turbulent trading months of September and October. My bet is that the world markets still have some rough waters and higher volatility just ahead.

President Trump continues his assault on the Federal Reserve, on Monday saying the central bank has shown a “horrendous lack of vision.” Later this week the annual Jackson Hole, Wyoming Federal Reserve confab that sees central bankers of the world attending will be extra closely monitored by the marketplace. Fed Chairman Powell speaks to the gathering Friday.

The German government today set a zero percent coupon on its new issue of 2050-dated bonds (bunds). Just a few years ago veteran market watchers would have shuddered to think that an investor would be interested in a 30-year bond that pays no interest.

The key “outside markets” today see Nymex crude oil prices near steady and trading around $56.25 a barrel. The U.S. dollar index is slightly higher.

U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and Goldman Sachs retail sales reports. The pace picks up Wednesday with the release of the minutes of the last FOMC meeting.

–Jim

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The gold market is under some selling pressure early this week, as risk appetite has up-ticked the past couple trading sessions, amid talk of easy money coming from the world’s major central banks. Still, the gold market is in a solid price uptrend on the daily chart and prices are not far below the recent six-year high. Bulls remain in firm overall near-term technical control. That means that path of least resistance for prices remains sideways to higher. Stay tuned!–Jim