Daily Morning Report

Thursday, June 27–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.

There are new developments in the U.S.-China trade war. Just ahead of the late-week meeting between U.S. President Trump and Chinese President Xi in Japan at the G20 confab, Xi has reportedly told Trump he’s ready to settle the trade war, but has laid out several conditions that Trump may not accept, including lifting sanctions on China telecommunications giant Huawei. So far today markets have not reacted much to this news, as traders are not sure if this is a positive or a negative for reaching a final deal. The outcome of the U.S.-China summit meeting is still very uncertain and could have major implications for many markets.

In other news, Bitcoin is posting strong losses of around $2,000 today after hitting a 17-month high Wednesday.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $58.75 a barrel. Meantime, the U.S. dollar index is slightly up on a corrective bounce and some chart consolidation after hitting a three-month low Tuesday.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of first-quarter GDP, pending home sales and the Kansas City Fed manufacturing survey.

–Jim

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Wednesday, June 26–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.

The markets were just slightly rattled Tuesday afternoon when Federal Reserve Chairman Jerome Powell said the Fed will not be pressured into cutting U.S. interest rates without the economic data to back any cut. U.S. stocks backed off a bit on Powell’s remarks.

A main focus of the marketplace at mid-week is the late-week meeting between U.S. President Trump and Chinese President Xi in Japan at the G20 confab—possibly after all the markets are closed on Friday. The two will discuss their ongoing trade war. The outcome of that meeting is uncertain and could have major implications for many markets. As has been the case since the trade war began, there are conflicting comments coming from the U.S. side. Reports attributed to U.S. trade officials Tuesday played down any significant progress to be expected at the summit meeting, other than a pledge that both sides will keep talking. The U.S. stock markets has somewhat reacted positively Wednesday morning to a comment from U.S. Treasury Secretary Mnuchin today, saying a U.S.-China trade deal is “90 percent done.”

The Iran-U.S. confrontation has turned to a war of words this week. Both sides are tossing harsh rhetoric at each other. This situation is bullish for safe-haven gold and for crude oil, and is not likely to de-escalate any time soon.

In other news, Bitcoin is posting gains of over $1,000 today and trading around $12,500. Part of the buying in the crypto currency is tied to the recent news that FaceBook is launching its own digital currency.

The key “outside markets” today see Nymex crude oil prices higher, at a four-week high, and trading around $58.85 a barrel. Meantime, the U.S. dollar index is firmer on a corrective bounce after hitting a three-month low Tuesday.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, advance economic indicators and the weekly DOE liquid energy stocks report.

–Jim

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The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart that the USDX has dropped sharply recently and this week hit a three-month low. Serious near-term technical damage has been inflicted to the index to suggest still more downside price pressure in the near term. The depreciating dollar on the foreign exchange market is bullish for many raw commodity markets. Reason: Most major raw commodities are priced in U.S. dollars on the world markets. When the dollar depreciates it makes those commodities less expensive to purchase in non-U.S. currency. Stay tuned!–Jim

Tuesday, June 25–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Many markets are in a pause mode, awaiting fresh news on the geopolitical front.

The U.S.-Iran tensions in the Persian Gulf region continue to simmer near the front burner. President Trump said Monday there will be major new sanctions put in Iran and called the country the world’s number-one sponsor of terrorism. Traders and investors are wondering how Iran will respond, and if Iran is itching for a military confrontation with the U.S. Trump appears unwilling to start a fight, but he also will not likely stand by idly while being provoked. This situation is likely to linger for quite a while and will likely get worse before it gets better.

Meantime, U.S. President Trump and Chinese President Xi are scheduled to meet in Japan at the G20 meetings late this week—possibly after all the markets are closed on Friday– and discuss their ongoing trade war. The outcome of that meeting is uncertain and could have huge implications for many markets, especially if an agreement is reached to end the trade war. Many reckon a final deal will not be announced this week, but instead the two countries will likely say they’ve made some progress and will keep talking.

Gold prices are sharply up again Tuesday and hit a six-year high on safe-haven demand amid geopolitics in play, and on a slumping U.S. dollar index.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $57.50 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce after hitting a three-month overnight.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the monthly house price index, the S&P/CoreLogic house price index, the Richmond Fed business survey, the consumer confidence index and new residential sales. Several Federal Reserve Board officials are also scheduled to speak today.

–Jim

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Monday, June 24–Jim Wyckoff’s Morning Markets Report

Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. This is likely to be a more important trading week, amid big events upcoming.

The U.S.-Iran confrontation in the Persian Gulf region continues to simmer on the front burner of the marketplace. News over the weekend surfaced that the U.S. last week employed a cyber-attack on Iran, specifically its ability to track big ships at sea, and to launch missiles. Also, President Trump says there will be “major” new sanctions put in Iran this week.

U.S. President Trump and Chinese President Xi are scheduled to meet in Japan at the G20 meetings late this week and discuss their ongoing trade war. The outcome of that meeting could have huge implications for markets, especially if an agreement is reached to end the trade war.

The key “outside markets” today see Nymex crude oil prices higher and trading just below $58.00 a barrel. Meantime, the U.S. dollar index is weaker and hit a three-month low overnight.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

–Jim

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Gains in corn, wheat and soybeans on Thursday put the bulls back on track, amid near-term price uptrends in place on the daily bar charts. U.S. Corn Belt weather still favors the bulls. Rainy and stormy conditions are forecast for the U.S. Midwest the rest of this week and into next week. Focus has turned to the June 28 USDA U.S. planted acreage report. That report will be one of the most important grain market reports of the year. Grain analysts are saying it’s wide open on the numbers the Agriculture Department assigns to corn and soybean planted acres. That means price action will likely be subdued next week, ahead of the Friday report. However, next Friday’s price action in the grains is expected to be highly volatile. Late next week is also when the U.S. and Chinese presidents meet to discuss trade. Ideas are also widely mixed on the outcome of that meeting, which also argues for more subdued trade in the grains until late next week. Stay tuned!–Jim