Daily Morning Report

Thursday, May 16–Jim Wyckoff’s Morning Markets Report

World stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Following Monday’s downdraft that pushed the U.S. stock indexes to six-week lows, the indexes have made solid recoveries.

There are two markets features this week: rising government bond yields due to concerns about slowing world economic growth. The U.S.-China trade war is mostly to blame for those worries. The second feature is a solid rebound in grain futures prices. That’s mostly due to big speculative funds covering their short futures positions.

On the U.S.-China trade war front, President Trump on Wednesday signed an executive order that essentially bans some U.S. telecommunications equipment from Chinese companies.

A U.S.-China trade theme continues in the world marketplace: one day the two sides are upbeat on a deal getting done; the next day their tone is sour. Such will keep the markets very uncertain on the matter.

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

U.S. economic data due for release today includes the weekly jobless claims report, the Philadelphia Fed business survey, and new residential construction.

–Jim

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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!