The U.S. stock indexes last week saw their near-term price uptrends on the daily bar charts at least temporarily negated and the bears had gained some technical strength. However, at mid-week this week the S&P e-mini and Nasdaq stock index futures had made strong recoveries and the bulls are now working to restart the aforementioned price uptrends. More price gains in the U.S. stock indexes the rest of this week would put the bulls right back in the driver’s set to suggest more price gains in the next few weeks. Stay tuned!
Daily Morning Report
World Stock Markets Mixed Overnight; Brexit in Focus, but Not a Major Markets-Mover
Wednesday, March 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward steady to narrowly mixed openings when the New York day session begins. There are still no major geopolitical hotspots to roil the marketplace and dent the keener trader and investor risk appetite.
British lawmakers voted late Tuesday on another Brexit plan offered by Prime Minister Theresa May, but despite some last-minute concessions from the European Union, the U.K. Parliament voted down May’s plan. The British pound was pressured on the news, even though a no-vote was expected by the marketplace. The U.K. is scheduled to leave the EU at month’s end.
In other overnight news, the Euro zone industrial output in January rose 1.4% from December but was down 1.1%, year-on-year. Those numbers were better than expectations but they also underscore an anemic Euro zone economy.
Gold prices are solidly higher and hit a two-week high overnight on chart-based buying and perceived bargain hunting following losses in late-February and early March.
The U.S. economic data point of the day is the producer price index report for February, seen up 0.2% from January. Tuesday’s U.S. consumer price index report was also tame and did help to lift U.S. Treasury prices.
The outside markets today see the U.S. dollar index slightly lower on a corrective pullback from recent gains that put the index at a new high for the year last week. Nymex crude oil prices are firmer and trading around $57.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the producer price index, durable goods orders, construction spending and the weekly DOE liquid energy stocks report.
–Jim
Not Much Market Risk Presently is Bullish for Equities
Tuesday, March 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward steady to narrowly mixed openings when the New York day session begins.
There is not much trader and investor anxiety in the world marketplace at present, which is bullish for world stock markets.
Reports say U.S. Trade Representative Robert Lightizer and Treasury Secretary Steven Mnuchin on Monday held talks with Chinese Vice Premier Liu He regarding key elements of the proposed U.S.-China trade agreement, according to China’s Xinhua News Agency. Marketplace attitudes are upbeat early this week on a trade deal getting done soon.
British lawmakers vote today on another Brexit plan offered by Prime Minister Theresa May. Despite some last-minute concessions from the European Union, the U.K. Parliament is expected to vote down May’s plan.
The key U.S. economic data point early this week is today’s consumer price index report for February, which is expected to come in at up 0.2% from January and up 2.2%, year-on-year.
The outside markets today see the U.S. dollar index lower on a corrective pullback from recent gains that put the index at a new high for the year last week. Nymex crude oil prices are firmer and trading around below $57.50 a barrel.
U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, and the consumer price index.
–Jim
Greenback Bulls Remain Powerful
See on the daily bar chart for the June U.S. dollar index futures that prices are in an uptrend and last week hit a new high for the year. The greenback bulls are in firm technical control, to suggest more upside price action in the near term. Remember, too, that price trends in the currency markets tend to be stronger and longer-lasting than price trends in other markets. Stay tuned!
World Stock Markets Mixed Monday, but Attitudes Still Generally Upbeat
Monday, March 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The Dow Jones Industrial average is pointed lower mainly due to a big drop in Boeing shares after another one of its airliners crashed in Africa over the weekend.
Traders and investors are mostly upbeat to start the trading week, following dour economic data out of the U.S. and China late last week. The U.S jobs report last Friday showed a sharp drop in the growth of non-farm payrolls, while China’s latest import and export numbers were down.
The U.S.-China trade talks appear to be moving closer to a formal agreement following a report over the weekend that the head of China’s central bank said his country will not devalue the yuan to boost China’s exports.
U.S. Federal Reserve Chairman Jerome Powell, in a rare TV interview on Sunday, reiterated the U.S. economic outlook is favorable and said there is no need to raise or lower interest rates at present.
The key outside markets today see the U.S. dollar index firmer and not far below last week’s new high for the year. Nymex crude oil prices are firmer and trading around below $56.50 a barrel. Crude has been trading sideways for the past two weeks. The International Energy Agency today reported the U.S. will become the world’s largest oil exporter by 2021—surpassing both Saudi Arabia and Russia. The U.S. is already the world’s largest oil producer, due to the boom in shale-oil production.
U.S. economic reports due for release Monday include retail sales, manufacturing and trade inventories, and the employment trends index. President Trump also releases his fiscal year 2020 budget.
–Jim
Dour Chinese Trade Data Spooks World Marketplace Friday
Friday, March 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. Chinese stocks had their worst daily performance in five months Friday following a bearish report on exports. In February, Chinese exports dropped a shocking 20.7% from the same period a year ago. Imports in the period were down 5.2%. The data underscored the damage inflicted on the world’s second-largest economy from the trade war with the U.S. Possibly somewhat mitigating those dour numbers is the fact that long Chinese public holidays in the period can distort the numbers.
Also overhanging the marketplace is the surprising announcement by the European Central Bank on Thursday that it is providing additional liquidity to the Euro zone banking system to try to stimulate the listing Euro zone economy. The ECB also significantly reduced its forecast for Euro zone GDP to just 1.1% growth in 2019, from a forecast of a 1.7% gain it made in December.
Not surprisingly, what just a few days ago seemed like a “done deal” on a U.S.-China trade agreement, there are now reports that some Trump administration officials say an agreement is not a certainty.
Focus of the marketplace today is also on the U.S. March jobs report from the Labor Department, due out Friday morning. That’s arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 180,000. The ADP national employment report for February, released on Wednesday, showed a rise of 183,000, which was close to market expectations for a rise of 185,000.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a new high for the year on Thursday. Nymex crude oil prices are lower and trading just below $56.00 a barrel.
The other U.S. economic report due for release Friday is new residential construction.
–Jim