Daily Morning Report

Tuesday, April 30–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were mixed in more subdued trading overnight. U.S. stock indexes are pointed toward steady to slightly lower openings when the New York day session begins. The U.S. stock indexes are near record or multi-month highs amid solid near-term price uptrends being in place.

In overnight news, the Euro zone reported its gross domestic product growth for the first quarter at 1.5%, year-on-year, which is better than the 0.9% growth rate seen in the fourth quarter and better than forecast. The Euro zone also reported its jobless rate at the lowest level in over 10 years.

The U.S. economic data pace picks up starting today, including the Federal Open Market Committee (FOMC) meeting that begins this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting.

U.S.-China trade talks resume today, with U.S. officials in Beijing. U.S. Treasury Secretary Mnuchin said in an interview late Monday that the talks are near conclusion and could wrap up next week. He added there remains some work to do on the matter, however. Most of the marketplace is fairly optimistic the U.S. and China will reach a trade deal in the coming weeks.

The key “outside markets” today see the U.S. dollar index down on profit taking after hitting a two-year high last Friday. Meantime, Nymex crude oil prices are higher and trading around $64.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the employment cost index, the S&P-Cash-Shiller home price index, the ISM Chicago business survey, the consumer confidence index, and pending home sales.

–Jim

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Monday, April 29–Jim Wyckoff’s Morning Markets Report

Asian and European stock indexes were narrowly mixed in more subdued trading overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. There continues to be little activity on the geopolitical front to influence world markets, making for a generally calmer and quieter trading environment. The U.S. stock indexes last week hit record or multi-month highs amid upbeat corporate earnings reports being released.

It will likely be a busier trading week this week, as the U.S. economic data pace picks up, including the Federal Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting.

U.S. corporate earnings reports will also continue to be released this week.

U.S.-China trade talks also resume this week, with U.S. officials traveling to Beijing. Most of the marketplace is optimistic the U.S. and China will reach a plausible trade deal in the coming weeks.

The key “outside markets” today see the U.S. dollar index trading near steady after hitting a two-year high last Friday. Meantime, Nymex crude oil prices are lower on more profit taking after hitting a six-month high last week, and are now trading around $62.75 a barrel. Oil prices dropped sharply late last week due in part to remarks from President trump saying he told OPEC oil prices were too high.

U.S. economic data due for release Monday includes personal income and outlays, and the Texas manufacturing outlook survey.

–Jim

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The Euro currency futures are trending solidly lower and this week hit a nearly two-year low. The Euro is one of the most popularly trading futures markets in the world. The bears are in solid control, to suggest more sideways-to-lower trading in the near term. Remember that trends in the currency markets tend to be stronger and longer-lasting than price trends in other markets. Stay tuned and read my daily reports for those early clues that suggest trend changes or price acceleration!

Friday, April 26–Jim Wyckoff’s Morning Markets Report

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

Traders and investors are awaiting the U.S. economic highlight of the week due out today: the first estimate on first-quarter gross domestic product. U.S. GDP is expected to come in at up 2.5%, year-on-year.

There continues to be little activity on the geopolitical front to influence world markets, making for a generally calmer and quieter trading environment.

The key “outside markets” today see the U.S. dollar index slightly lower after hitting a two-year high on Thursday. The strong greenback has once again sparked a bit of concern in the emerging currency markets, especially for the Turkish lira and Argentine peso. Meantime, Nymex crude oil prices are lower on profit taking after hitting a six-month high earlier this week, and are trading around $65.25 a barrel.

Other U.S. economic data due for release Friday includes the University of Michigan consumer sentiment index.

–Jim

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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!