Daily Morning Report

Monday, June 17–Jim Wyckoff’s Morning Markets Report

European stock indexes were mostly firmer overnight, while Asian shares were mixed. The U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins.

Markets are quieter early this week as traders and investors worldwide are awaiting the Federal Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. FOMC members will discuss U.S. monetary policy. Most believe the Fed will not raise interest rates at this meeting, but members may lean toward a more dovish stance on monetary policy, to set the table for a rate hike in the coming few months.

There were no major news developments on the geopolitical front over the weekend, including no escalation of the U.S.-Iran tensions following last week’s attacks on big ships in the Gulf of Oman that the U.S. blamed on Iran. Still, this matter is not likely to just fade away.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $52.00 a barrel. Meantime, the U.S. dollar index is slightly down in early U.S. trading.

U.S. economic data due for release Monday includes the Empire State manufacturing survey and the NAHB housing market index.

–Jim

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Friday, June 14–Jim Wyckoff’s Morning Markets Report

European and Asian stock indexes were mostly lower overnight, on keener risk aversion among traders and investors. The U.S. stock indexes are also pointed toward modestly lower openings when the New York day session begins.

The marketplace is on edge following the U.S. blaming Iran for two more ships in the Persian Gulf area (this time in the Gulf of Oman) being attacked by either smaller gunboats, mines or possibly even a torpedo. The U.S. military has a video showing what is apparently a small Iranian gunboat next to one of the big ships that was attacked. U.S. Secretary of State Mike Pompeo said Iran’s attacks are a “clear and present threat to international peace and security.” U.S. Navy ships are reportedly protecting some oil tankers in the region. This situation could escalate rapidly if Iran and the U.S. have a direct military confrontation.

Markets were also spooked by news Friday that China’s industrial production was at its slowest growth pace in 17 years in May, at up 5%, year-on-year, and below market expectations of 5.5% growth. The world’s number-two economy has been showing signs of weakening for months, amid a major trade war with the U.S.

Gold prices pushed to a 14-month high today on safe-haven demand, while U.S. Treasuries are also seeing their yields drop significantly.

In other overnight news, the Russian central bank cut its main interest rate to 7.5%, in the latest move by the world’s central banks to ease their monetary policies amid slowing global economic growth and very low inflationary pressures.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $52.00 a barrel. Worldwide supply and demand fundamentals for crude oil favor the bears. Meantime, the U.S. dollar index is slightly up in early U.S. trading.

U.S. economic data due for release Friday includes retail sales, industrial production and capacity utilization, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.

–Jim

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The soybean futures market saw solid gains at mid-week to jumpstart a price uptrend on the daily bar chart. The bean bulls now have momentum to challenge chart resistance at the early-June highs. A push above the early-June highs in soybeans would give the bulls much more technical power to suggest a solid leg up in prices in the near term. Importantly, as the summer is unfolding in the grain markets and the weather has been bullish for the grains, the corn market has been the upside leader and will very likely continue to lead the grain futures markets. Stay tuned!–Jim

Thursday, June 13–Jim Wyckoff’s Morning Markets Report

European and Asian stock indexes were mostly firmer overnight. The U.S. stock indexes are also pointed toward modestly higher openings when the New York day session begins. Notions of more accommodative monetary policies from the world’s major central banks, amid generally very low inflationary pressures globally, are supporting world stock markets recently.

The marketplace is a bit uneasy Thursday after reports more ships in the Persian Gulf area (this time in the Gulf of Oman) being attacked by smaller gunboats. U.S. Navy ships are reportedly now protecting some oil tankers in the region. Oil prices are solidly higher today on the news, while gold prices are also getting a modest safe-haven bid. Right now tensions in markets are not real high, but this situation could deteriorate quickly if Iran and the U.S. have a direct military confrontation.

The key “outside markets” today see Nymex crude oil prices solidly higher and trading around $52.50 a barrel, on the Oman Gulf news. Still, worldwide supply and demand fundamentals for crude oil favor the bears. Meantime, the U.S. dollar index is near steady in early U.S. trading.

In other overnight news, Switzerland’s central bank held its monetary policy steady, but did signal rate cuts are possible at future central bank monetary policy meetings.

U.S. economic data due for release Thursday is light and includes the weekly jobless claims report, and import and export prices.

–Jim

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Wednesday, June 12–Jim Wyckoff’s Morning Markets Report

European and Asian stock indexes were mostly lower overnight. The U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. The U.S. indexes at mid-week have ended an impressive rally streak that lifted prices well up from the early-June three-month lows.

Gold prices are posting good gains today amid the keener risk aversion in the marketplace, as evidenced by the weaker global equity markets.

In overnight news, China’s May consumer price index hit a 15-month high, at up 2.7%, year-on-year. The CPI was up 2.5% in April. Food prices led the rise in CPI, with pork prices up 18%.

The U.S. economic data point of the day is the consumer price index report for May, which is expected to come in at up 0.1% from April and rising 0.3% last month. Very low worldwide inflation levels in major economies is giving central bankers more leeway to ease their monetary policies.

The key “outside markets” today see Nymex crude oil prices solidly lower and trading just below $52.00 a barrel, on world economic growth worries. The U.S. dollar index is near steady, but is in a near-term price downtrend and there are chart clues the USDX has put in a near-term top.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the consumer price index, real earnings, the weekly DOE liquid energy stocks report and the monthly Treasury budget statement.

–Jim

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The U.S. dollar index is a basket of six major world currencies stacked up against the greenback. See on the daily bar chart for the September USDX futures that prices have backed well down from the recent contract high, including negating a price uptrend in the process, to suggest that a near-term market top is in place. A weaker dollar on the world foreign exchange market is a bullish element for raw commodities prices in U.S. dollars on the world markets. Reason: Such makes then cheaper to purchase in non-U.S. currency. Stay tuned!–Jim