The U.S. Treasury bond futures market has been trading in a sideways and choppy fashion for several weeks, but prices are not far below the contract high and the bulls are maintaining their firm overall near-term technical advantage. That suggests the next bigger price move will be up. Stay tuned!
Daily Morning Report
Geopolitics On the Front Burner Of Marketplace at Mid-Week
Wednesday, February 27–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 weaker openings when the New York day session begins. There is some risk aversion in the marketplace today, especially in Asian markets.
There is a geopolitical hotspot that has the attention of the world marketplace at mid-week. India and Pakistan have exchanged military strikes on each other the past two days. India bombed what it said was a terrorist camp in Pakistan, with Pakistan retaliating by shooting down two Indian aircraft. This news has Asian stock and financial markets on edge.
Brexit concerns still have European traders just slightly worried, but it appears Prime Minister Theresa May and Parliament have agreed to extend the Brexit deadline past late-March if a deal on the U.K. exiting the European Union is not reached.
Traders, investors and markets did not show big reactions to Federal Reserve Chairman Jerome Powell’s testimony to the U.S. Senate on Tuesday. Powell sounded a more dovish tone on U.S. monetary policy, which is what most expected. Powell speaks to the House of Representatives today.
In another sign of the low inflation expectations in the world marketplace at present, the German government today auctioned its 10-year bonds (bunds) for an average yield of just 0.12%. That’s the lowest level in nearly 2.5 years.
The key outside markets today see the U.S. dollar index slightly lower. The greenback bulls are fading a bit this week. Nymex crude oil prices are higher and trading around $56.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the advance economic indicators report, pending home sales, manufacturers’ shipments and inventories, and the weekly DOE liquid energy stocks report.
–Jim
World Stock Markets See Mild Corrective Pullbacks Tuesday
Tuesday, February 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly weaker overnight, on corrective pullbacks from recent gains. U.S. stock indexes are also pointed toward slightly lower openings when the New York day session begins. The U.S. indexes hit three-month highs on Monday amid generally upbeat trader and investor attitudes, and with no major geopolitical fires presently burning.
The U.S. economic news of the day Tuesday will be Federal Reserve Chairman Jerome Powell’s morning testimony on the U.S. economy to the Senate Banking Committee. He speaks to the House of Representatives on Wednesday. Most market watchers reckon Powell will sound a more dovish tone on monetary policy than he has in the past.
In overnight news, the British pound was supported by reports Prime Minister Theresa May will work on another Brexit deal and may delay the March 29 European Union exit date, including possibly holding another referendum on the matter in order to avoid a “no-deal Brexit.”
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly down and trading around $55.50 a barrel. Oil prices fell sharply Monday, in part on a tweet from President Trump saying oil prices are too high and could hurt the global economy.
U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, new residential construction, the S&P/Case-Shiller home price index, the consumer confidence index and the monthly and quarterly U.S. house price indexes.
–Jim
U.S. Stock Index Bulls Have Power and Momentum
The U.S. stock market bulls have power and momentum to suggest still more price gains in the coming weeks. See on the daily bar chart for the March S&P e-mini stock index futures that prices are in a solid uptrend. However, it’s still my bias that the record highs scored last year will be very strong resistance for the bulls to overcome. Stay tuned!
U.S.-China Trade-Talk Progress Continues to Boost World Stock Markets
Monday, February 25–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly up overnight, with China’s shares sharply higher and posting their biggest gains in almost four years. U.S. stock indexes are also pointed toward higher openings when the New York day session begins. Traders and investors worldwide are cheered by the substantial progress achieved in the U.S.-China trade talks that have been going on the past few weeks. On Sunday, President Trump tweeted that he is delaying the originally imposed early-March deadline for new U.S. tariffs on China’s imports, because of the progress made so far.
In overnight news, Atlanta Federal Reserve president Raphael Bostic said he expects one U.S. interest rate hike in 2019 and one in 2020. He told the Wall Street Journal that the U.S. economy is strong at present, but there is also keener uncertainty about future growth prospects.
Mining giant Barrick gold confirmed today it is making a hostile bid for Newmont Mining, as it proposed an all-share merger that would value the new, single entity at $42 billion. Newmont has so far rejected Barrick’s overtures.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are slightly up and trading around $57.50 a barrel.
U.S. economic reports due for release Monday include the Chicago Fed national activity index, monthly wholesale trade, and the Texas manufacturing outlook survey.
–Jim
World Stock Markets Ending Week Firmer On Hopes for U.S.-China Trade Deal
Friday, February 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly up overnight, with China’s shares leading advances in Asia. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Upbeat trader and investor attitudes have been bolstered this week by perceptions the U.S. and China are moving closer to an agreement to end their trade war.
In overnight news, Canadian press “The Globe and Mail” has reported Barrick Gold is considering a hostile takeover of its rival Newmont Mining Corp. If completed, this would be one of the largest mining company mergers ever.
In other news, the Euro zone producer price index for January came in at down 0.1% on the month and up 1.4%, year-on-year. Those numbers were very close to being in line with market expectations and continue a theme of non-problematic worldwide inflation pressures.
The closely watched German Ifo business confidence index dropped to a four-year low in February. “The German economy remains weak,” said an Ifo official. That’s not good news for the already-anemic European Union economy, whose workhorse is Germany.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are firmer and trading around $57.50 a barrel.
There are no major U.S. economic reports due for release Friday. However, there is a U.S. Monetary Policy Forum held, featuring Fed officials speaking and a report released on monetary policy.
–Jim