Daily Morning Report

Wednesday, July 10–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly weaker in more subdued trading overnight. U.S. stock indexes are pointed toward moderately lower openings when the New York day session begins.

The U.S. economic highlight of this week will be Fed Chairman Jerome Powell speaking to the U.S. House of Representatives on U.S. monetary policy on Wednesday morning. He follows that up with testimony to a Senate panel on Thursday. Powell is expected to lean slightly toward the dovish side of money policy, and he will surely be asked by lawmakers what he thinks about President Trump bashing him recently, including pondering firing him. Powell may also shed some light on when the next U.S. interest rate increase is coming.

In overnight news, China’s June consumer price index was reported up 2.7%, year-on-year, which was in line with market expectations. However, the food prices component of the report rose by 8.3% annually.

The key “outside markets” today see Nymex crude oil prices higher and trading around $59.00 a barrel. The U.S. dollar index is slightly lower.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, July 9–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly weaker in quieter overnight trading. U.S. stock indexes are pointed toward moderately lower openings when the New York day session begins.

The U.S. economic highlight of this week will be Fed Chairman Jerome Powell speaking to the U.S. House of Representatives on U.S. monetary policy on Wednesday morning. He follows that up with testimony to a Senate panel on Thursday. Powell will surely be asked by lawmakers what he thinks about President Trump bashing him recently, including pondering firing him. Powell may also shed some light on when the next U.S. interest rate increase is coming, or not.

In a geopolitical matter that is presently on the back burner of the marketplace, Iran continues its sabre rattling against the U.S. The regime said Monday it intends to further breach its nuclear agreement with the United Nations unless the U.S. eases economic sanctions against Iran.

The key “outside markets” today see Nymex crude oil prices higher and trading around $58.00 a barrel. Meantime, the U.S. dollar index is firmer and hit a three-week high in early U.S. trading.

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

–Jim

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Corn has been the upside leader in grain prices for several weeks. Corn has begun to rebound but soybeans and wheat have lagged. It’s likely that more gains in corn this week would pull soybean and wheat prices higher, too. Historically, the early-July timeframe is critical for the grain markets, as weather patterns in the U.S. Midwest can change as mid-summer approaches. With the corn and soybeans behind in growth development this year, weather forecasts for the next two to three weeks will produce extra-sensitive reactions from grain traders. Stay tuned!–Jim

Monday, July 8–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly weaker in quieter overnight trading. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins.

Last Friday’s strong U.S. jobs report has somewhat dented trader and investor enthusiasm on notions the Federal Reserve is now less likely to lower interest rates at its July monetary policy meeting. Friday’s jobs data rallied the U.S. dollar and pressured U.S. Treasury prices.

In overnight news, the Turkish lira is under pressure and dropped around 2% against the U.S. dollar after Turkey’s president fired the head of the Turkish central bank.

The key “outside markets” today see Nymex crude oil prices near steady and trading around $57.50 a barrel. Meantime, the U.S. dollar index is slightly down in early U.S. trading.

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

–Jim

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Friday, July 5–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed in quieter trading overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Look for quieter trading activity in the U.S. after the initial reaction to the U.S. jobs report’s release. Many traders and investors are still celebrating the U.S. Independence Day holiday that was on Thursday.

Traders and investors are awaiting Friday morning’s important June U.S. jobs report from the Labor Department. The key non-farm payrolls number of the report is expected to show a rise of 165,000. However, Wednesday’s weaker ADP number (up 102,000) has many thinking today’s non-farms number will also be a downside miss. A significant downside miss today would likely increase the odds for a Federal Reserve interest rate cut in July.

The key “outside markets” today see Nymex crude oil prices weaker and trading around just below $57.00 a barrel. Meantime, the U.S. dollar index is higher in early U.S. trading.

Other U.S. economic data due for release Friday includes the weekly USDA export sales report.

–Jim

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U.S. Treasury bond and note futures prices hit contract highs this week (prices move in an inverse relationship with yields). Meantime, European government bond yield are dropping, with the benchmark German 10-year bund hitting a record low this week. Very low and even problematically low inflation levels in the major economies of the world are perplexing central banks and also the savers around the globe, who get little to no return on the savings accounts. This scenario has been bullish for world stock markets and is likely to become more bullish for raw commodities. Reason: Easing monetary policies of the world’s central banks puts more money into the financial system, which in turn should mean better demand for commodities. Stay tuned!–Jim