Daily Morning Report

Thursday, April 25–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed to weaker overnight. Asian markets were somewhat pressured by some downbeat GDP data coming out of South Korea. At down 0.3% in the first quarter, South Korea’s GDP was the weakest in over 10 years. The dour report prompted the central banks in China and Japan to signal they had no intention of tightening their monetary policies anytime soon.

U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The U.S. stock indexes are trending solidly higher and this week hit record or near record and/or multi-month highs.

In other overnight news, Sweden’s Riksbank kept its monetary policy unchanged but said it likely won’t start raising interest rates until farther down the road. Riksbank’s current interest rate is -0.25%. The bank had previously said it hoped to start raising interest rates in the second half of 2019. The Swedish krona dropped sharply against the dollar on the news. This news is another signal that world interest rates remain historically low, including German bond yields this week dropping back below zero percent. This argues that worldwide inflationary pressures should remain well under control.

The U.S. dollar index is firmer and hit another multi-month high overnight. A feature in an otherwise fairly quiet marketplace this week is the surging greenback. Raw commodity markets have taken note of the strong dollar and many are feeling selling pressure as a result. Many raw commodities are priced in U.S. dollars on the world markets. So when the dollar appreciates against the other currencies, it makes those commodities more expensive to purchase in non-U.S. currency.

Another marketplace highlight recently finds Nymex crude prices trending higher, and are firmer today, near Tuesday’s six-month high of $66.60 a barrel. Brent crude oil prices climbed above $75 this week. Oil experts now reckon worldwide oil demand is outstripping supplies by around 500,000 barrels a day. At this point the rally in oil prices has not had much impact on world stock and financial markets, and could even be termed on the friendly side for equities. However, if oil prices continue to trend higher in the coming weeks, consumers and the marketplace will start to squirm a bit due to the bite of higher energy costs cutting into their overall spending on other goods. Read that bearish for stocks (reduced consumer spending) and bonds (concerns regarding rising inflation).

U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders and the Kansas City Fed manufacturing survey.

–Jim

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The gentle price uptrend in the U.S. stock indexes continues to play out, amid low volatility. This scenario is just what the stock market bulls want to see, as it suggests more of the same to come. If stock market volatility heats up, even with big upside price moves, such would be a clue of a topping process occurring. But right now prices continue to creep sideways to higher and that will remain the path of least resistance until a significantly bearish early warning technical signal occurs, which I would report in my daily analysis. So, stay tuned and read my daily reports!

Wednesday, April 24–Jim Wyckoff’s Morning Markets Report

Asian stock indexes were mostly weaker overnight, while the European equities markets traded near steady. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock indexes are trending solidly higher and are at or near record and/or multi-month highs. With no major geopolitical hotspots in play at present, focus of traders and investors is on corporate earnings reports, most of which have been upbeat.

In overnight news, the closely watched German Ifo business sentiment index fell in April to 99.2 versus 99.7 in March.

It’s quieter this week on the U.S.-China trade war front. Both sides are set to meet again next week. The U.S. is also discussing trade with Japan and other nations. The European Central Bank today declared the U.S. could be the main victim on trade because of its more aggressive stance toward its major trading partners.

Nymex crude prices on Tuesday pushed to a six-month high of $66.60 a barrel, with Brent crude trading above $74.00. Prices are modestly lower today on some profit taking. The other key outside market today finds the U.S. dollar index near steady and not far below this week’s multi-month high.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, April 23–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed to mostly weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. With no major geopolitical hotspots in play at present, focus of traders and investors is on corporate earnings reports.

Rising oil prices that saw Nymex crude push above $66.00 a barrel and to a six-month high overnight, with Brent crude above $70.00, are getting more attention in the marketplace. More gains in crude oil would likely prompt some keener concerns about problematic inflation, as well as economic growth concerns. Oil’s surge this week is mainly due to the U.S. not renewing waivers it had given to some countries on sanctioned Iranian crude oil imports.

The other key outside markets today find the U.S. dollar index slightly up and not far below the high for the year set last Thursday.

U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, the monthly house price index, new residential sales, and the Richmond Fed business survey.

–Jim

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The Nymex crude oil futures market on Monday powered to a nearly six-month high above $65.00 a barrel. Recent price action in crude pushed above key technical resistance levels that now make a challenge of major psychological resistance at $70.00 likely in the near term. Veteran oil market bulls would like to see the gentle, unassuming price uptrend remain, as it would suggest more of the same. Higher daily volatility and bigger price moves would be a chart clue that prices are topping out. But right now the crude oil market bulls are in firm near-term technical command. Stay tuned!

Monday, April 22–Jim Wyckoff’s Morning Markets Report

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

There is a bit of risk aversion in the marketplace to start the trading week, as the U.S. is ratcheting up its economic sanctions on Iran. The U.S. now intends to eliminate waivers it had given to countries that imported Iranian crude oil.

Some world stock and financial markets are closed Monday due to the Easter holiday.

The key outside markets today find the U.S. dollar index weaker on a corrective pullback after hitting a new high for the year on Friday. Meantime, Nymex crude oil prices are solidly higher, hit a nearly six-month high and are trading around $65.50 a barrel. Oil surged on the weekend reports the U.S. is going to end sanction waivers for countries importing Iranian crude oil.

U.S. economic reports due for release Monday are light and include the Chicago Fed business survey and existing home sales.

–Jim

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