Daily Morning Report

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!

Tuesday, February 5–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly firmer in quieter dealings overnight. Chinese markets and some other Asian markets are closed this week for the Lunar New Year holiday, which could make for quieter trading in world markets most of this week. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

In overnight news, the Euro zone reported downbeat retail sales in December, at off 1.6% from November and up a paltry 0.8%, year-on-year. The monthly decline was the most in eight years. Meantime, the Euro zone January services purchasing managers index (PMI) came in at a better-than-expected 51.2, which was unchanged from December.

President Trump had dinner with Fed Chairman Jerome Powell and Treasury Secretary Steve Mnuchin at the White House Monday evening, to discuss the U.S. economy—the first time Powell and Trump had a face-to-face conversation since Powell became the Fed chair. Trump had considered firing Powell just a few months ago. Then Powell and the Fed shifted their tenor on U.S. monetary policy to a more dovish stance.

The U.S. highlight of the day will be President Trump’s State of the Union speech in the evening. Many market watchers will want to know what the president says about U.S.-China trade relations. The trade talks appear to be progressing ahead of the early-March deadline for a deal being reached.

The outside markets today see the U.S. dollar index trading higher again. Meantime, Nymex crude oil prices are up and trading just above $55.00 a barrel. Political turmoil in Venezuela, a crude oil exporter, is a bullish element for the oil market.

U.S. economic reports due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. services PMI, the IBD/TIPP economic optimism index, the ISM non-manufacturing report on business, and the global services PMI.

–Jim

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Monday, February 4–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed in quieter dealings overnight. Chinese markets are closed this week for the Lunar New Year holiday, which could make for quieter trading in world markets this week. U.S. stock indexes are pointed toward near steady openings when the New York day session begins.

Traders and investors are in generally upbeat moods early this week, following a strong U.S. jobs report released last Friday, and on ideas the U.S. and China are moving closer to a trade deal as the early-March deadline for an agreement approaches. U.S. and Chinese officials are set to meet again in China in mid-February, after meeting last week in Washington, D.C.

In overnight news, the Euro zone producer price index for December came in at down 0.8% from November and up 3.0%, year-on-year. That’s yet another inflation report from a major world economy that is not at all worrisome.

The outside markets today see the U.S. dollar index trading higher. Meantime, Nymex crude oil prices are slightly up and trading just above $55.00 a barrel.

U.S. economic reports due for release Monday includes the ISN New York report on business, manufacturers’ shipments and inventories, and the employment trends index.

–Jim

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The soybean futures market has been trending higher in choppy fashion since mid-September. The grain market bulls got some good news late Thursday when President Trump said China will buy more U.S. ag products. If soybeans push and close above the resistance line seen on the daily chart, the bulls would gain more power to then begin to suggest an assault on major psychological resistance at $10.00. Stay tuned!