Daily Morning Report

Wednesday, February 13–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were higher overnight. U.S. stock indexes hit 2.5-month highs overnight and are pointed toward slightly higher openings when the New York day session begins, following good gains on Tuesday. Risk appetite in the marketplace this week remains keener, what with no major geopolitical events in play at present.

Focus of the marketplace this week is on U.S.-China high-level trade talks taking place in Beijing. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer are attending the talks, with them participating late this week. Reports today said China President Xi Jinping may meet with the U.S. delegation on Friday, as a show of good will. Many traders and investors are upbeat that a deal can be reached by the March 1 deadline. President Trump said on Wednesday he could extend that deadline a bit if the talks were progressing well.

The key economic data point of the day is the U.S. consumer price index report for January, which is forecast to come in at up 0.1% from December and up 1.5% from January of 2018. The U.K. inflation rate in January was today reported up 1.8%, year-on-year. An important theme in the world marketplace the past few months has been tamped down inflationary pressures. At mid-year in 2018 many market watchers were worried about problematic inflation arising.

In overnight news, the Euro zone reported its industrial output down 0.9% in December from November, and down 4.2%, year-on-year. That’s the worst monthly reading in nine years. Economic news coming out of the Euro zone continues a downbeat tone.

The key outside markets today see the U.S. dollar index slightly higher. The USDX this week hit a two-month high. Nymex crude oil prices slightly are firmer and trading just below $55.00 a barrel. The oil market has been trading sideways for two weeks, as stiff chart resistance at and just above $55.00 has stalled an uptrend.

U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the CPI report, real earnings, the monthly Treasury budget statement, and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, February 12–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite in the marketplace this week remains keener, what with no major geopolitical events in play at present.

Traders and investors were cheered to see reports the Democrats and President Trump may be close to reaching a formal agreement on a budget that would avoid another government shutdown later this week. The reports said a tentative agreement was reached on Monday.

Focus of the marketplace this week is also on U.S.-China high-level trade talks taking place in Beijing. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer will attend the talks, likely to take place with them present later this week. Many traders and investors are upbeat that a deal can be reached by the March 1 deadline.

The key outside markets today see the U.S. dollar index slightly lower following recent strong gains that pushed the index to a two-month high on Monday. Nymex crude oil prices slightly are firmer and trading just above $53.00 a barrel.

U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index. Several Federal Reserve officials speak today, including Chairman Jerome Powell.

–Jim

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The June Euro currency futures have just seen a bearish downside “breakout” from the sideways trading range at lower price levels, and have scored a contract low. The bears are in solid near-term technical control to suggest still more selling pressure in the near term. Stay tuned!

Monday, February 11–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The world marketplace continues in a generally upbeat mood, with no serious geopolitical events at present that would create anxiety.

Focus of the marketplace early this week is on U.S.-China high-level trade talks taking place in Beijing. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer will attend the talks, likely to take place with them present later this week. Many traders and investors are upbeat that a deal can be reached by the March 1 deadline.

In overnight news, the U.K. economy grew at a paltry 1.4% in 2018, with the weak showing being mostly due to Brexit worries. This is yet another downbeat economic report coming out of Europe.

The continuing resolution passed by Congress a couple weeks ago expires on Friday, with the U.S. government set for another partial shutdown in the Democrats and President Trump cannot come to agreement on a budget plan. Another shutdown would be bearish for the U.S. stock market.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices slightly are weaker and trading just above $52.00 a barrel.

There are no major U.S. economic reports due for release Monday.

–Jim

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Friday, February 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed overnight. It’s been a quieter trading week this week, what with Chinese markets and some other Asian markets closed for the Lunar New Year holiday. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

Underlying themes still in play for the markets include perceptions of slowing world economic growth, with maybe the U.S. being the outlier after its strong jobs growth reported last Friday. European Union and Chinese economic reports lately have been mostly downbeat. The other matter on the front burner for traders and investors is the U.S.-China trade war, which sees a March 1 deadline for either getting a resolution on the matter, or ratcheting up of sanctions between the world’s two largest economies.

A feature in the marketplace this week is the resurgent U.S. dollar, which hit a five-week high overnight. Raw commodity market bulls don’t want to see a strong greenback because it makes those commodities priced in U.S. dollars on the world market more expensive to purchase in non-U.S. currency.

The other key outside market today sees Nymex crude oil prices slightly weaker trading around $52.50 a barrel. Prices have backed down from this week’s 2.5-month high of $55.75 a barrel.

The only major U.S. economic reports due for release Friday are a slew of USDA reports backed up from the government shutdown.

–Jim

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A market highlight of this trading week has been the solid rally in the U.S. dollar index, which hit a four-week high Thursday. Just last week the USDX hit a three-week low. The stronger greenback is a negative element for the raw commodity sector, as it makes those commodities priced in U.S. dollars on the world market more expensive to purchase in non-U.S. currency. Stay tuned!