Daily Morning Report

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!

Thursday, February 7–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed but mostly weaker in quieter dealings overnight. Chinese markets and some other Asian markets have been closed this week for the Lunar New Year holiday, which is making for subdued trading in many world markets this week. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

In overnight news, there was more downbeat economic news coming out of the European Union, the world’s third-largest economy. The EU’s European Commission cut its growth forecast for the Euro zone to 1.3% in 2019, which is well down from a 1.9% growth rate forecast in November. The report blamed in part the U.S.-China trade war for the slower growth rate. The report also lowered Euro zone inflation expectations, to 1.4% in 2019 and 1.5% in 2020. And in Germany, industrial output in December was down 0.4% from November when a rise of 0.8% was expected.

The Bank of England is holding its regular monetary policy meeting today, but no change is expected.

A market highlight of the trading week has been the solid rally in the U.S. dollar index, which hit a four-week high overnight. Just last week the USDX hit a three-week low. The other key outside market today sees Nymex crude oil prices weaker trading just below $54.00 a barrel.

U.S. economic reports due for release Thursday includes the weekly jobless claims report, the monthly U.S. chain store sales index, and consumer credit.

–Jim

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European and Asian stock markets were mixed but mostly weaker in quieter dealings overnight. Chinese markets and some other Asian markets are closed this week for the Lunar New Year holiday, which is making for the subdued trading in world markets this week. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

The U.S. highlight Tuesday was President Trump’s State of the Union speech in the evening. Many market watchers thought the president might mention specifics on the U.S.-China trade-talks progress, but he did not. The trade talks appear to be making progress, ahead of the early-March deadline for a deal being reached.

In overnight news, Germany, the workhorse of the European Union economy, reported an unexpected drop in manufacturing orders in December, at down 1.6% from November. A slight rise was expected in the report.

The key outside market today see Nymex crude oil prices weaker trading around $53.50 a barrel. The U.S. dollar index is firmer today.

U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, preliminary productivity and costs, the international trade report, and the weekly DOE liquid energy stocks report.

–Jim

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The Nymex crude oil futures market has been trending higher for the past five weeks and on Monday hit a 2.5-month high. The path of least resistance for oil prices is now sideways to higher, which is good news for the raw commodity market bulls. See the technical support and resistance lines on the chart. Stay tuned!