Daily Morning Report

Wednesday, January 30–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were again narrowly mixed overnight, ahead of key news events to play out this week. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. A negative earnings report from Apple, released late Tuesday, has U.S. investors in a tentative mood today.

The economic highlight at mid-week is the Federal Reserve’s Open Market Committee (FOMC) meeting that began on Tuesday morning and ends Wednesday afternoon with a statement on monetary policy. No change in monetary policy is expected. However, traders want to know if the Fed today will tip its hand regarding the course of monetary policy in 2019. Markets could become active and volatile following the results of the meeting, which includes a press conference by Fed Chairman Jerome Powell after the FOMC statement. Powell is getting a reputation for putting his foot in his mouth while making comments to the press or at speeches.

The U.K. parliament on Tuesday evening backed the “Plan B” Brexit initiative from Prime Minister Theresa May. The Parliament had rejected May’s initial Brexit plan. The British pound was not significantly impacted by the news.

U.S. and China high-level trade officials are meeting in Washington, D.C, on Wednesday and Thursday. There is no consensus at all on any progress that may or may not be made at this week’s talks. The U.S. government this week filed new charges against the high-tech company from China, Huawei. President Trump also plans to speak to the Chinese delegation that is in Washington this week.

The political situation in Venezuela is still very fluid at present, with the potential for civil violence. The U.S. on Monday slapped economic sanctions on the country, which is a major oil producer.

Gold prices hit an eight-month high today, partly on notions of an easier Fed monetary policy in the coming months, and also on some safe-haven demand.

The outside markets today see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are firmer and trading around $53.50 a barrel.

U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the ADP national employment report, the Treasury’s quarterly refunding announcement, pending home sales and the weekly DOE liquid energy stocks report.

–Jim

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Tuesday, January 29–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were narrowly mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

There are several world news elements at work early this week, which are making traders and investors a bit nervous. Gold prices are benefitting from the risk aversion and hit a seven-month high overnight, at just above $1,308.00.

The U.S.-China trade war that has been playing out for months finds high-level officials from both countries meeting in Washington, D.C, on Wednesday and Thursday. There is no consensus on any progress that may or may not be made at this week’s talks, but stock and financial market traders are this week leaning to the negative side of any successful outcome. The U.S. government this week has filed new charges against the high-tech company from China, Huawei. Comments from U.S. and Chinese officials have been all over the map recently.

The political situation in Venezuela is still very fluid at present, with the potential for civil violence. The U.S. on Monday slapped economic sanctions on the country, which is a major oil producer.

The Federal Reserve’s Open Market Committee (FOMC) meets on Tuesday morning through Wednesday at midday, with a statement on monetary policy on Wednesday afternoon. No change in monetary policy is expected. Markets could become active and volatile following the results of the meeting, which includes a press conference by Fed Chairman Jerome Powell. Powell is getting a reputation for putting his foot in his mouth while making comments to the press or at speeches.

The U.K. parliament on Tuesday votes on the “Plan B” Brexit initiative from Prime Minister Theresa May. May’s last Brexit plan was voted down a few weeks ago and May survived a no-confidence vote by Parliament.

The outside markets today see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are firmer and trading around $52.50 a barrel.

U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, advance economic indicators, S&P/Core-Logic home indexes, and the consumer confidence index.

–Jim

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The gold market last Friday popped sharply higher, hit a seven-month high and also closed at a technically bullish weekly high close. The bulls also managed to keep a price uptrend in place on the daily bar chart, after trend-line support had been challenged recently. The path of least resistance for the yellow metal remains sideways to higher and the bulls now have momentum on their side. Stay tuned!

Monday, January 28–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There is some risk aversion in the marketplace to start the trading week.

The U.S. government is open after being partially shut down for a month. However, the government could shut down again in mid-February if President Trump and the Democrats can’t reach a deal on the U.S. budget. Traders and investors are glad to be able to scrutinize some more fresh U.S. economic data to help the drive markets prices.

The U.S.-China trade war that has been playing out for months this week finds high-level officials from both countries meeting in Washington, D.C. There is no consensus on any progress that may or may not be made at this week’s talks. Comments from U.S. and Chinese officials have been all over the map recently.

The political situation in Venezuela is very fluid at present, with the potential for civil violence. The country is a major oil producer.

This week finds the Federal Reserve’s Open Market Committee (FOMC) meeting on Tuesday and Wednesday, with a statement on monetary policy on Wednesday afternoon. Markets could become active and volatile following the results of the meeting.

The U.K. parliament votes on the “Plan B” Brexit initiative from Prime Minister Theresa May on Tuesday.

The outside markets today see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are lower and trading just below $53.00 a barrel.

U.S. economic reports due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

–Jim

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Friday, January 25–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. There are several new elements in the marketplace today that could provide some more volatility during U.S. trading hours.

The marketplace is so far taking in stride the news just out that another close friend and aide of President Donald Trump was arrested in Florida, in connection with the Russian election tampering investigation.

In other overnight news, a Dow Jones Newswires report said the Federal Reserve will likely end its unwinding of its massive U.S. securities portfolio sooner than expected. That, in effect, is another sign the Fed is backing off on tightening its monetary policy and further suggests the Fed will not raise U.S. interest rates this year.

There was more downbeat economic news coming out of the European Union today. The European Central Bank’s “Survey of Professional Forecasters” saw them lower Euro zone economic growth to 1.5% this year and in 2020. The last forecast from the group saw growth in 2019 at 1.8% and in 2020 at 1.6%. Meantime, the German Ifo business sentiment index dropped to a three-year low in January. This news comes as the Euro currency slumped to 1.5-year low against the U.S. dollar on Thursday.

The outside markets today see the U.S. dollar index trading lower on a corrective pullback from good gains Thursday that pushed prices to a three-week high. Meantime, Nymex crude oil prices are slightly higher and trading just above $53.00 a barrel.

There were several key U.S. economic reports due for release Friday, but the ongoing government shutdown has cancelled them. Traders continue to deal with a lack of fresh U.S. economic data to help them drive the markets.

–Jim

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The Nymex crude oil market is still trending up from the multi-year low scored a few weeks ago. The price uptrend on the daily chart suggests the market has put in a major low. A move in prices above solid chart resistance at $55.00 a barrel would give the bulls fresh technical power to suggest a fresh leg up in prices in the near term. It’s my bias, however, the oil prices will trade between $45.00 to $55.00 a barrel for much of 2019–barring an unexpected, major geopolitical event that could significantly impact oil prices. Stay tuned!