Daily Morning Report

Tuesday, August 13–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward modestly lower openings when the New York day session begins. There is more protesting by the citizens of Hong Kong, which has again shut down the city’s main airport. This situation is escalating and the world marketplace is now sensing some real trouble brewing in the Asian region. Pressure is building on mainland China to quell the civil unrest. The U.S.-China trade war is also escalating, with some Wall Street firms now advising their clients the U.S.-China trade conflict could deteriorate into a “cold war” similar to what the U.S. and Russia had for three decades. Throw in North Korea test-firing missiles, the U.S.-Iran stand-off and political unrest in Argentina and traders/investors have a whole bunch of worry simmering and maybe coming to a boil on the front burners of the world marketplace.

Gold prices shot to a six-year high overnight, while U.S. Treasuries and world government bond yields are dropping again. The German bund hit a new record-low yield of minus 0.617%.

The U.S. dollar index and crude oil prices are fairly stable today, however.

Worries about slowing global economic growth were further stoked Tuesday when the closely watched German ZEW economic current conditions index in August had a reading of -13.5 versus -1.1 in July. The economic expectations component had a reading of -44.1 in August versus -34.5 in July. Germany is the economic workhorse of the European Union.

On tap in the U.S. today is the July consumer price index, expected to be up 0.3% from June and up 1.7%, year-on-year.

Other U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, and real earnings.

–Jim

Continue Reading

Monday, August 12–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. The first trading day of the week sees a “risk-off” trader and investor mentality. There is once again protesting in Hong Kong, which has shut down its main airport. Market watchers wonder how long mainland China will allow the civil unrest.

Gold prices and U.S. Treasury prices are up Monday, on safe-haven demand.

China’s central bank on Monday set its currency, the yuan, exchange rate with the U.S. dollar at 7.0211, which is above the 7 level the U.S. has deemed problematic. This exchange rate will continue to be closely monitored. Most of the world marketplace views the U.S.-China trade negotiations as having deteriorated in August.

The key “outside markets” today see Nymex crude oil prices down and trading around $53.75 a barrel. The U.S. dollar index is trading slightly up in early U.S. action.

U.S. economic data due for release Monday is light and includes the monthly Treasury budget statement and the USDA monthly supply and demand report.

–Jim

Continue Reading

The safe-haven U.S. T-Bond and T-Note futures see their prices trending sharply higher amid geopolitical and global economic growth concerns. Some market watchers are calling it a “race to the bottom” regarding falling world government bond yields. Don’t expect the turbulence in the marketplace to ebb anytime soon. That means more price gains (lower yields) are likely coming for U.S. Treasuries. Stay tuned!–Jim

Friday, August 9–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. After a couple days of respite, trader and investor anxiety has returned to the global marketplace, heading into the weekend.

There is once again protesting in Hong Kong, this time at its main airport. Market watchers wonder how long mainland China will allow the civil unrest.

Slowing world economic growth prospects are in greater focus today after the U.K. economy contracted in the second quarter by 0.2% from the first quarter and was down 0.8%, year-on-year. Worries about the U.K. Brexit are hurting consumer confidence in the country.

The International Energy Agency on Friday lowered world crude oil demand growth by 100,000 barrels per day, citing concerns about world economic growth, including world trade relations.

Meantime, China reported its July producer price index down 0.3%, year-on-year, but consumer prices rose 2.8% in the same period. That’s a negative signal for China’s consumers and producers.

Japan did get some good economic news Friday, as its GDP was reported up 0.4% in the second quarter from the first quarter, and up 1.7%, year-on-year.

The yield on the benchmark U.S. Treasury note fell overnight to around 1.6%, on safe-haven demand. Gold prices are also higher.

China’s central bank on Friday again set its currency, the yuan, exchange rate with the U.S. dollar at just above the 7 level, which is the level at which the U.S. has deemed problematic. This exchange rate will continue to be closely monitored.

The key “outside markets” today see Nymex crude oil prices modestly higher and trading around $52.75 a barrel. The U.S. dollar index is trading slightly lower in early U.S. action.

U.S. economic data due for release Friday includes the producer price index.

–Jim

Continue Reading

Thursday, August 8–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly up overnight, on some upbeat economic data coming out of China. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. The world marketplace has calmed down Thursday, after some keener anxiety early Wednesday. Price action the past two days hints the U.S. stock index bears may now be exhausted, which begins to suggest near-term market bottoms are in place. Still, price action today and Friday will be extra important.

China’s exports rebounded in July, rising 3.3%, year-on-year, and compares to a 1.3% decline reported for June. China’s exports in July were expected down 2.0%. Meantime, China’s July imports were down 5.6%, year-on-year.

The yield on the benchmark U.S. Treasury note rose to 1.729% this morning, after dropping to around 1.61% earlier this week.

China’s central bank on Thursday set its currency, the yuan, exchange rate with the U.S. dollar at 7.0039. That’s the weakest yuan fixing set by the central bank in 11 years, and is above the 7 level that the U.S. has ostensibly deemed problematic. This exchange rate will continue to be closely monitored. The U.S. designated China as a currency manipulator earlier this week.

The key “outside markets” today see Nymex crude oil prices higher and trading around $52.25 a barrel. The U.S. dollar index is trading slightly higher in early U.S. action.

U.S. economic data due for release Thursday includes the weekly jobless claims report, monthly wholesale trade and the monthly retail chain stores sales index.

–Jim

Continue Reading

The safe-haven gold market has scored a six-year high above $1,500.00 an ounce amid safe-haven demand from investors who are spooked on several fronts: the U.S.-China trade war, slowing global economies, unrest in Hong Kong and a hard U.K. Brexit. The technicals in gold are fully bullish, suggesting still more upside in the near term. There are no early clues of a market top being close at hand for the yellow metal. You will find any early clues on a market’s pending price trend reversal, or acceleration, in my daily reports. Stay tuned!–Jim