Daily Morning Report

Wednesday, May 15–Jim Wyckoff’s Morning Markets Report

World stock markets were mixed overnight, with European indexes mostly down and Asian stocks mostly higher. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

Traders and investors are somewhat assuaged at mid-week following more upbeat comments from President Trump and China officials Tuesday that suggested the world’s two largest economies want an amenable resolution soon in their trade war.

Economic data coming out of China today showed more decelerating growth. It’s industrial production, retail sales and fixed-asset investment all slowed in April from March and came in below expectations.

The world marketplace at present seems to be overlooking a U.S. military build-up in the Middle East. President Trump is sending 100,000 U.S. troops to the region, to complement the U.S. naval task force steaming to the Persian Gulf. This week’s attacks on two Saudi oil tankers in the Strait of Hormuz showed that tensions in the region are on the rise—namely a U.S.-Iran stare-down.

Meantime, the Euro zone reported its first-quarter GDP at up 0.4% from the fourth quarter of last year and up 1.2%, year-on-year. Those numbers were right in line with market expectations and help to confirm European Union economic growth remains tepid.

The key “outside markets” today see the U.S. dollar index slightly firmer. Meantime, Nymex crude oil prices are lower and trading around $61.00 a barrel.

It’s a very busy day for U.S. economic data releases, including the weekly MBA mortgage applications survey, retail sales, the Empire State manufacturing survey, industrial production and capacity utilization, manufacturing and trade inventories, the NAHB housing index, Treasury international capital data and the weekly DOE liquid energy stocks report.

–Jim

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The Nymex crude oil futures market has seen its price uptrend negated recently, which is a technical clue that a market top is in place. Bulls are working to stabilize the market and have so far been successful, to suggest more sideways and choppy trading in the near term. However, if prices drop below solid chart support at $60.00, more technical damage would be inflicted to suggest a fresh leg down in prices, including a challenge of $50.00 a barrel. Stay tuned!

Tuesday, May 14–Jim Wyckoff’s Morning Markets Report

World stock markets were mixed overnight, with European indexes mostly higher and Asian stocks mostly weaker. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The world stock markets are trying to stabilize following Monday’s rout in the wake of the failed U.S. trade talks and the imposition of new tariffs by the U.S. and China against each other.

There has been technical damage inflicted on U.S. stock indexes to suggest they have put in near-term tops and can now only trade sideways at best for at least the time being.

Many commodity markets have been hit hard by the U.S.-China trade war, including grain and livestock markets that are presently at multi-month or multi-year lows.

The key “outside markets” today see the U.S. dollar index slightly higher. The greenback bulls have faded a bit recently. Meantime, Nymex crude oil prices are higher and trading around $62.25 a barrel. There are technical clues the oil market has put in a near-term top.

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

–Jim

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Monday, May 13–Jim Wyckoff’s Morning Markets Report

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

The failure of the U.S. and China to reach a trade deal late last week and the resulting new tariffs put in place by the U.S., including retaliatory threats from China, have the world marketplace in a downbeat mood to start the trading week. Trade officials from both countries will continue talking, however.

The marketplace is so far not being significantly impacted by news two Saudi oil tankers were attacked in the Strait of Hurmuz over the weekend. The attackers are apparently unknown. However, tensions between the U.S. and Iran have ratcheted up in recent weeks, with some speculating Iran may be behind the weekend attacks on the Saudi ships, which were not sunk but did sustain significant damage.

The key “outside markets” today see the U.S. dollar index slightly lower. Meantime, Nymex crude oil prices are higher and trading around $62.50 a barrel.

There is not major U.S. economic data due for release Monday.

–Jim

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The U.S. stock indexes this week saw their near-term price uptrends at least temporarily negated amid significant selling pressure that drove the indexes to four-week lows. There are now early chart clues the stock indexes have put in near-term market tops. The old trading adage “sell in May and go away” is so far ringing true. Recent history shows the stock market bulls have been resilient, but they need to step up and show some real power very soon to restart the price uptrends. Stay tuned!

Friday, May 10–Jim Wyckoff’s Morning Markets Report

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

There was no eleventh-hour trade agreement reached between the U.S. and China late Thursday. Increased U.S. tariffs on imported Chinese goods went into effect at midnight last night. China has vowed retaliation. Interestingly, China’s stock market posted a solid rally Friday after this news. It could be a classic case of “sell the rumor, buy the fact” regarding the matter. The U.S.-China trade talks will continue in Washington today. It could also be that the Asian stock market rally Friday was due in part to optimism a deal can be reached soon, as the two sides are still talking. Also, President Trump said China President Xi sent him a “beautiful letter” this week and that the two may talk soon on the matter.

Focus in early U.S. trading today will be on the U.S. consumer price index report for April, which is expected to come in at up 0.4% from March and up 2.1%, year-on-year. A theme in the world marketplace in recent months has been very tame inflation coming out of the major economies.

The U.S.-China trade conflict has this week mostly overshadowed another potential geopolitical flashpoint. Iran’s government said this week it will stop complying with some commitments it made in the United Nations nuclear deal in 2015. The U.S. has a naval task force steaming to the Persian Gulf, including an aircraft carrier, due to what the U.S. says are threats against the U.S. in the region.

The key “outside markets” today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are firmer and trading just below $62.00 a barrel.

Other U.S. economic data due for release Friday includes real earnings, and the monthly Treasury budget statement.

–Jim

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