Daily Morning Report

Wednesday, February 20–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower 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.

At mid-week there appears to be slightly more optimism in the ongoing U.S.-China trade talks, taking place this week in Washington, D.C. President Trump on Tuesday said there could be flexibility on the early-March deadline for more U.S. trade tariffs to be imposed on China. Ideas are still widely mixed on whether any final deal will be reached any time soon. China’s state media Wednesday said there would be catastrophic economic consequences if the U.S. slapped new sanctions on China.

The U.S. economic data point of the day is the Federal Reserve’s FOMC minutes that are due out in the afternoon. The minutes will be closely scrutinized by traders and investors. The recent change in Fed policy stance to one of more accommodative monetary conditions has been a significantly bullish underlying factor for several commodity markets, including the precious metals. It’s also been bullish for world stock and bond markets.

The U.K. Brexit saga continues to play out, as four MP’s that were aligned with Prime Minister Theresa May dropped their affiliation with her. There is still no deal in place as the late-March deadline approaches for the U.K. to leave the European Union.

The key outside markets today see the U.S. dollar index slightly higher after seeing a corrective pullback Tuesday, after hitting a two-month high last Friday. Nymex crude oil prices are slightly lower after hitting a three-month high on Tuesday. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.

Other U.S. economic reports due for release Wednesday include the MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.

–Jim

Continue Reading

The Nymex crude oil futures market early this week has hit a three-month high and is in the process of pushing prices above a major technical resistance area around and just above $55.00 a barrel. The bulls have restarted a price uptrend on the daily bar chart and they have momentum to suggest prices will continue to grind sideways to higher in the near term. Stay tuned!

Tuesday, February 19–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, following a three-day U.S. holiday weekend. Traders and investors are not as upbeat this week as last, even though there are no major fresh news developments in the markets.

The ongoing U.S.-China trade talks taking place this week in Washington, D.C. will be closely monitored by the world marketplace. Ideas are mixed on a final deal being reached by the U.S.-imposed early-March deadline.

The U.K. Brexit saga continues to play out, with no deal in place as the late-March deadline approaches for that country to leave the European Union.

Slowing Chinese economic growth is also a bit worrisome for the marketplace.

Gold prices hit a 10-month high overnight on technical buying and amid ideas of easier monetary policies being put in place by the world’s major central banks. The Federal Reserve’s FOMC minutes are due out Wednesday afternoon and will be closely scrutinized by traders and investors.

The key outside markets today see the U.S. dollar index near steady and seeing a mild corrective pullback after hitting a two-month high on Friday. Nymex crude oil prices are higher, hit a three-month high and are trading just above $56.00 a barrel. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.

U.S. economic reports due for release Tuesday is light and includes the NAHB housing market index.

–Jim

Continue Reading

The wheat futures market, as well as the corn market, have been trading in sideways and choppy ranges at lower levels for several weeks. It’s likely that this price action is “basing” that will at some point set off price uptrends. As for as timing for an upside “breakout” from the basing area, of course nobody knows. My bias is that any upside breakout would occur in April or May. Stay tuned!

Friday, February 15–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Asian and European stock markets were mixed overnight. U.S. stock indexes have hit two-month highs this week and are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite in the marketplace this week remains generally upbeat.

Gains in Asian shares were limited today by downbeat economic data coming out of China. Its producer price index for January came in at up 0.1%, which was well down from the December gain of 0.9% and suggests slowing economic growth. Meantime, China’s consumer price index for January was reported up 1.7%–down from up 1.9% in December, year-on-year. The China inflation data continues a theme of low price inflation in the major world economies.

The U.S.-China trade talks taking place in Beijing this week have concluded, with people involved in the talks saying enough progress was made to construct a framework on the path to an agreement, and to be later added to when U.S. President Trump and Chinese President Xi Jinping meet at a later date. The two sides will continue negotiations next week in Washington. While there are still big obstacles to overcome on the matter, the marketplace is reading the discussions as making notable progress, which has in part helped to rally world stock markets this week.

The marketplace has also been assuaged this week by Trump agreeing to a U.S. budget compromise between the Democrats and Republicans, despite the agreement not having as much money appropriated for a border wall with Mexico. Trump now says he’s going to declare a national emergency to get the funding for a border wall with Mexico.

The key outside markets today see the U.S. dollar index firmer and very near its 2018 high scored in December. Nymex crude oil prices are slightly lower and trading around $54.50 a barrel. The oil market bulls are having a good week, but stiff chart resistance is located at and just above $55.00 a barrel.

U.S. economic reports due for release Friday include import and export prices, the Empire State manufacturing survey, industrial production and capacity utilization, the University of Michigan consumer sentiment survey, and Treasury international capital data.

–Jim