Daily Morning Report

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

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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!

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

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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

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The gold market this week hit a 10-month high and prices are in a solid uptrend on the daily bar chart. The bulls have good technical power to suggest more price gains in the near term. There are no early chart clues to suggest a market top is close at hand. Stay tuned!

Thursday, February 21–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock indexes remain in near-term price uptrends and they are near their recent 2.5-month highs.

There are new reports out today that the ongoing U.S.-China trade talks, taking place this week in Washington, D.C., are going well. That’s allowing a bit more trader and investor risk appetite to be present in the marketplace. Reuters reported late Wednesday that U.S. and China officials are outlining a deal to end the trade war. The report said agreements in principle are being drawn up in six major areas. Reports also said U.S. President Trump and Chinese President Jinping may hold a summit in March to finalize the deal.

The marketplace has mostly digested the Federal Reserve’s Open Market Committee (FOMC) meeting minutes, released Wednesday afternoon. The minutes expressed some more concern regarding risks to U.S. economic growth, which the Fed says has moderated in recent months. The Fed saw few risks in leaving U.S. monetary policy steady, at present. The minutes also said the Fed will exercise “patience” on future interest rate hikes. Markets showed no significant price reactions to the report.

In overnight news, the European Union received some more downbeat economic news when the February manufacturing purchasing managers’ index (PMI) came in at 49.2 versus expectations for a reading of 50.5. A number below 50.0 suggests contraction in the sector.

The key outside markets today see the U.S. dollar index slightly higher after seeing a corrective pullback this week after hitting a two-month high last Friday. Nymex crude oil prices are firmer and hit another three-month overnight, and are trading around $57.50 a barrel.

U.S. economic reports due for release Thursday include the weekly jobless claims report, durable goods orders, the Philadelphia Fed business survey, the U.S. flash services and manufacturing purchasing managers’ indexes, leading economic indicators, existing home sales and the weekly DOE liquid energy stocks report.

–Jim

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