Daily Morning Report

Thursday, May 23–Jim Wyckoff’s Morning Markets Report

World stock markets were mostly down overnight. U.S. stock indexes are also pointed toward solidly lower openings when the New York day session begins. Risk aversion has again surfaced late this week. Parliamentary elections in the U.K. and The Netherlands get under way Thursday, with the populist parties (euroskeptics) possibly doing well. Other European countries’ election results will be announced Sunday. The U.K. Brexit issue that remains unresolved amid Prime Minister Theresa May’s planned departure continues to weight on the British pound.

Simmering closer to the front burner of the world marketplace today is the U.S.-China trade war that may or may not come to resolution in the next few weeks.

The U.S.’s more aggressive stance against Iran in recent weeks is another matter that could quickly elevate trader and investor tensions. A U.S. naval task force is in the Persian Gulf region.

Gold prices are getting a bit of a safe-haven bid Thursday from the keener uncertainty in the marketplace.

The key “outside markets” today see the U.S. dollar index higher and not far below this year’s high, which is a two-year high. Meantime, Nymex crude oil prices are lower and trading around $60.50 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash services and manufacturing purchasing managers’ indexes, new residential sales and the Kansas City Fed manufacturing survey.

–Jim

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The corn futures market is on fire as prices have rallied over 50 cents a bushel in about two weeks’ time. Serious U.S. planting delays have boosted the corn market, with the delayed seeding likely causing some reduced overall yields. It’s late may and a serious weather market is already in play in the grain markets. It’s very likely going to be a very active and more volatile summer in the grain markets. Stay tuned right here and read my daily reports for the early clues on the expected big trending price moves in the grains (and other markets, too, of course).–Jim

Wednesday, May 22–Jim Wyckoff’s Morning Markets Report

World stock markets were mixed overnight. U.S. stock indexes are also pointed toward narrowly mixed openings when the New York day session begins. Risk appetite among traders and investors is a bit keener this week, as the U.S.-China trade war rhetoric from both sides has died down the past few days.

In overnight news, St. Louis Federal Reserve Bank President James Bullard said in a speech in Hong Kong late Wednesday that the U.S. central bank may need to lower interest rates if inflation levels continue at very low levels. The Federal Reserve would like to see annual U.S. inflation around the 2% level. Bullard is a voting member of the Federal Open Market Committee (FOMC).

In another sign of worldwide inflation that is very low, or even problematic, Germany’s government auctioned 10-year bonds (bunds) for an average yield of -0.07%. That’s the lowest yield in almost three years.

The key “outside markets” today see the U.S. dollar index slightly down but still not far below this year’s high, which is a two-year high. Meantime, Nymex crude oil prices are also weaker and trading around $62.50 a barrel.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the FOMC minutes and the weekly DOE liquid energy stocks report. U.S. Treasury Secretary Steven Mnuchin also speaks to a U.S. House committee today.

–Jim

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Tuesday, May 21–Jim Wyckoff’s Morning Markets Report

World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.

The Paris-based OECD think tank today reported that trade disputes between the U.S. and its trading partners have weakened global business investment. The OECD said business investment in 2019 will increase by 1.75% compared to a growth rate of 3.5% in both 2017 and 2018.

In other overnight news, Australia’s central bank says it will consider lowering interest rates at its early-June meeting. Australia’s economy and its currency have been ailing in recent months, due in part to the U.S.-China trade dispute.

The key “outside markets” today see the U.S. dollar index firmer and not far below this year’s high, which is a two-year high. Meantime, Nymex crude oil prices are also up and trading around $63.50 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and existing home sales.

–Jim

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The U.S. stock index futures hit contract and/or multi-month highs in early May but have since appeared to “roll over” as the bulls have lost power. The “sell in May and go away” trading adage appears to be holding true as we have passed the mid-point of May. See on the daily bar chart for the June e-mini S&P futures that prices have dropped from the recent high. Note at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is in a bearish posture as the blue trigger line is below the red MACD line and both are trending lower. A drop in price below the solid support line seen on the chart would give the U.S. stock index bears fresh power to suggest a new leg down in prices. Stay tuned!

Monday, May 20–Jim Wyckoff’s Morning Markets Report

World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S.-China trade war drags on, with any agreement between the two largest economies in the world not seen imminent. This matter will likely continue to be a drag on world stock markets until it’s come to a successful conclusion.

Markets are not reacting much to a threatening tweet President Trump made to Iran over the weekend. Trump warned Iran not to threaten the U.S. or it could mean an end to Iran as a country. A U.S. naval task force has been deployed to the Persian Gulf recently.

In overnight news, the German Bundesbank reported it expects Germany’s economy to stagnate in the second quarter of this year. Germany’s economy is the workhorse of the European Union.

In other news, Australia’s conservative government got a surprising victory in weekend national elections. And India’s Prime Minister Modi has likely won re-election over the weekend, according to exit polls.

The key “outside markets” today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are also trading around unchanged and just below $63.00 a barrel.

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

–Jim

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