Daily Morning Report

Thursday, January 24–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Traders and investors pointed to generally upbeat U.S. corporate earnings reports as supporting buying interest in equities, which has pushed the U.S. indexes to four-week highs this week. The U.S. indexes remain in near-term price uptrends on the daily bar charts.

Traders are looking ahead to the European Central Bank’s regular monetary policy meeting that will be ending soon, including ECB President Mario Draghi’s press conference after the meeting. No changes in ECB monetary policy are expected.

In other overnight news, the Euro zone Markit purchasing managers index (PMI) showed a composite reading of 50.7 in January from 51.1 in December. That’s yet another sign of a gradually slowing Euro zone economy. The January PMI reading was the lowest in five years.

Reports overnight said the Microsoft search engine “Bing” has disappeared from China’s internet users’ screens. China heavily censors the internet. This won’t help U.S.-China trade relations when the two sides hold high-level trade talks in Washington, D.C., next week.

The partial U.S. government shutdown drags on, along with the lack of U.S. economic data to drive many markets. A top Trump administration economic advisor on Wednesday said the shutdown could prompt zero growth in the U.S. economy in the first quarter of 2019.

The outside markets today see the U.S. dollar index trading higher. Meantime, Nymex crude oil prices are slightly lower and trading around $52.50 a barrel. Political turmoil in Venezuela, including the U.S. recognizing the opposition leader as leader of the country, is a potentially bullish element for the oil market. The U.S. may sanction Venezuelan oil exports.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash services PMI, the U.S. flash manufacturing PMI, leading economic indicators, the Kansas City Fed manufacturing survey, and the weekly DOE liquid energy stocks report.

–Jim

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Wednesday, January 23–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. U.S. and world stock markets were hit hard Tuesday on worries about slowing global economic growth and the ongoing trade war between the U.S. and China—the world’s two largest economies. Media reports on Tuesday that the U.S. cancelled a planned mid-level trade officials’ meeting set for this week were denied by the White House, which did allow the U.S. stock indexes to move off of their daily lows.

In overnight news, the Bank of Japan left its interest rates unchanged at its regular monetary policy meeting. However, the BOJ did lower its inflation expectations for the next two years, which continues a worldwide theme of lessening worries about problematic inflationary pressures.

Traders are looking ahead to the European Central Bank’s regular monetary policy meeting on Thursday, including ECB President Mario Draghi’s press conference.

News reports out of the annual World Economic Forum in Davos, Switzerland suggest a somewhat gloomy picture that the elite bigwigs attending are painting, and on several fronts. The U.S., Britain and China governments are not in attendance this year.

The U.S. government remains in partial shut-down mode with no agreement between the Democrats and President Trump to reopen it imminent. This is starting to drag on the U.S. economy, including the lack of fresh economic news to help drive many markets. Many of those markets are seeing some selling pressure due to the uncertainty created by the lack of fresh economic news.

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

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Johnson Redbook and Goldman Sachs weekly retail sales reports, the monthly house price index, and the Richmond Fed business survey.

–Jim

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The Euro currency bears still have the overall near-term technical advantage, but prices have been trapped in a very choppy trading range at lower levels for the past 2.5 months. The next trending price move (up or down) will occur when prices break out above the resistance line or below the support line. Otherwise, look for more choppy and sideways trading until the breakout occurs. Stay tuned!

Tuesday, January 22–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Some risk aversion has creeped back into the marketplace this week. U.S. stock and financial markets were closed for a federal holiday on Monday.

There are renewed worries about slowing global economic growth, as the International Monetary Fund released a report Monday that projected collective world economic growth at 3.5% in 2019, which is down from their last forecast in October for 3.7% growth. The IMF also warned about higher risks for sharper declines in world economic growth.

Meantime, China on Monday reported its economic growth rate in 2018 at 6.6%, which is the lowest level in 29 years.

Germany, the economic driver of the European Union, reported more dour economic data today, with its ZEW economic expectations index weakening in January, along with its current conditions index.

The U.S. government remains in partial shut-down mode with no agreement between the Democrats and President Trump to reopen it imminent. This is starting to drag on the U.S. economy, including the lack of fresh economic news to help drive many markets.

The important outside markets today see the U.S. dollar index trading slightly higher. Meantime, Nymex crude oil prices are lower and trading around $53.00 a barrel.

The World Economic Forum is being held this week in Davos, Switzerland. Movers and shakers from around the world are there, but the U.S. has backed its government officials out due to the government shutdown.

U.S. economic data due for release Tuesday includes existing home sales.

–Jim

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The soybean futures market is in a choppy near-term price uptrend, as seen on the daily bar chart for March futures. Bulls continue to show resilience, even if they don’t have the technical power to produce eye-popping price gains. The path of least resistance for soybean prices will continue to be sideways to higher in a choppy fashion. Stay tuned!

Friday, January 18–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. Traders and investors are in upbeat moods late this week on reports that surfaced Thursday afternoon that the U.S. is considering lowering or even eliminating its trade tariffs on China as a way to get that nation to make more trade concessions in the current trade war. The idea came from U.S. Treasury Secretary Steven Mnuchin, reports said. However, other reports said U.S. Trade Representative Robert Lighthizer is against the idea, while another report said the Trump administration is not considering lowering tariffs on Chinese goods imported into the U.S. Next week, Chinese and U.S. trade officials are scheduled to meet next week in Washington. The marketplace is taking this news as a positive and reckons President Trump is demanding his advisors get a trade deal done with China by early March.

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

U.S. economic data due for release Friday includes industrial production and capacity utilization and the University of Michigan consumer sentiment survey.

–Jim

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