Daily Morning Report

Monday, July 22–Jim Wyckoff’s Morning Markets Report

Asian and European stocks were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session beings. The U.S. indexes hit record and contract highs last week.

Geopolitical tensions are higher to start the trading week, on news that Iran’s military late Friday seized a British oil tanker near the Strait of Hormuz, apparently in response to the U.K. capturing an Iranian vessel a couple weeks ago. Iran’s confrontation with the U.S. and the U.K. will probably escalate in the coming weeks, with the concern in the marketplace being a major U.S. military strike against Iran, which could disrupt oil shipping in the Persian Gulf.

Focus of traders and investors remains on the major central banks of the world and their lean toward more accommodative monetary policies amid worries about slowing global economic growth. The European Central Bank holds its regular monetary policy meeting on Thursday. Next week, the U.S. Federal Reserve’s Open Market Committee (FOMC) has its money policy meeting. Both central banks are expected to ease their monetary policies at the meetings.

The key “outside markets” today see Nymex crude oil prices higher and trading around $56.50 a barrel. Meantime, the U.S. dollar index is slightly higher today.

U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.

–Jim

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Friday, July 19–Jim Wyckoff’s Morning Markets Report

Asian and European stocks were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session beings. The U.S. indexes hit record and contract highs earlier this week.

The marketplace is still buzzing about remarks made by influential New York Federal Reserve Bank President John Williams Thursday afternoon. He suggested the Fed should be more aggressive in its monetary policy actions to prevent a slowdown in the U.S. economy. That led some market watchers to believe the Fed could do a 0.5% rate cut at its late-July FOMC meeting. Later, the Federal Reserve tried to “walk back” Williams’ comments. St. Louis Fed President James Bullard on Friday said a 0.25% U.S. rate cut in the near term is appropriate.

Gold prices hit a six-year high overnight on the dovish Federal Reserve notions, the U.S. dollar Thursday afternoon dropped and U.S. Treasury prices rallied in the aftermath of Williams’ remarks.

The key “outside markets” today see Nymex crude oil prices firmer and trading just below $56.00 a barrel. The oil market bulls have faded this week amid talk the U.S. and Iran could start talking, regarding U.S. sanctions on Iran. However, there were also reports the U.S. military and Iran’s military are challenging each other near the Strait of Hormuz, including unconfirmed reports the U.S. shot down an Iranian drone. Meantime, the U.S. dollar index is higher today on a rebound following the sell off Thursday following Williams’ comments.

U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.

–Jim

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The Euro currency futures market is one of the most popularly traded markets in the world. See on the daily bar chart that the Euro currency has started another price downtrend and prices are now not that far above the lows for the years. Bears again have the solid overall near-term technical advantage, to suggest a challenge of the yearly lows, or below. Stay tuned!–Jim

Thursday, July 18–Jim Wyckoff’s Morning Markets Report

Asian and European stocks were mostly weaker overnight, on some disappointing earnings reports. U.S. stock indexes are pointed toward weaker openings when the New York day session beings, on some mild profit taking after hitting record and contract highs earlier this week.

There are also declining expectations the U.S. and China can come to a trade agreement anytime soon, following recent downbeat rhetoric coming from both sides. Reports just out say China is demanding that the U.S. ease restrictions on its technology giant, Huawei. This situation has put a bit of a damper on global stock market bulls.

The key “outside markets” today see Nymex crude oil prices firmer and trading just below $57.00 a barrel. Meantime, the U.S. dollar index is slightly down.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators.

–Jim

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Wednesday, July 17–Jim Wyckoff’s Morning Markets Report

Asian and European stocks were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session beings, and are at or near their record and contract highs scored this week.

The important U.S. economic data point at mid-week is the afternoon beige book report from the Federal Reserve. It’s expected the report will lean dovish on U.S. monetary policy, given recent comments from Fed officials, including Chairman Jerome Powell. The Federal Open Market Committee (FOMC) meets on July 30-31.

In overnight news, the Euro zone consumer price index for June came in at up 0.2% from May and up 1.3%, year-on-year. Those numbers were just a bit above market expectations but still underscore the very low inflation in the major world economies. In fact, the German government auctioned a 30-year bond today, which fetched a yield of only 0.3%.

The key “outside markets” today see Nymex crude oil prices firmer and trading just below $58.00 a barrel. The oil market took a hit late Tuesday on reports that Iran may want to negotiate with the U.S. regarding U.S. sanctions on Iran. Meantime, the U.S. dollar index is slightly down after good gains posted Tuesday.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the beige book, new residential construction, and the weekly DOE liquid energy stocks report.

–Jim

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The U.S. stock indexes this week have pushed to new contract and record highs amid a bullish cocktail of good U.S. economic growth and the prospects for an easier monetary policy coming from the Federal Reserve. In fact, one major brokerage said the stock market is set to provide returns that are five-times greater than returns on government bonds. Sounds like a no-brainer to be in the stock market, right? Veteran traders know that any trade that seems like a “lay-up” is one that should be very carefully scrutinized. Remember the old trading adage: “Markets can and will do anything and everything to frustrate the largest amount of traders.” Stay tuned!–Jim