Daily Morning Report

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

Continue Reading

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

Continue Reading

Thursday, January 17–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly lower overnight. Traders and investors are now lamenting reports out this week that the U.S. and China trade talks may not be going as well as many thought just last week. Adding to the murkiness is reports that U.S. federal prosecutors will file criminal charges of theft of intellectual property against the big Chinese technology firm Huawei. The lingering government shutdown may also be negatively impacting the U.S. equities. The added uncertainty of limited, fresh U.S. economic data is an underlying negative for many markets and maybe also for some big companies.

U.K. Prime Minister Theresa May survived a no-confidence vote from Parliament late Wednesday, but the markets were little impacted on the protracted Brexit drama playing out.

In other overnight news, the Euro Zone’s consumer price index for December came out at unchanged from November and up 1.6%, year-on-year, which was in line with market expectations. This is yet another very tame inflation report coming from a major world economy. This report lends credibility to the recent shift in the thought-process of many market watchers—to more accommodative monetary policies coming from the world’s major central banks in the coming months.

The important outside markets today see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are weaker and trading just below $52.00 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report and the Philadelphia Fed business survey. Once again, the federal government’s partial closure is cancelling many economic reports, including some scheduled for today.

–Jim

Continue Reading

The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart that the USDX has made a strong rebound this week, but is still in a near-term price downtrend. The USDX is an important “outside market” that has a daily price impact on many other markets. Reason: Most major world commodities are priced in U.S. dollars on the world markets. Changes in the value of the dollar influence the prices of products priced in dollars but which have to be purchased with non-U.S. currency. Stay tuned!

Wednesday, January 16–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mixed overnight, as traders in Europe don’t appear too concerned about the U.K. Parliament voting down on Tuesday evening Prime Minister Theresa May’s Brexit plan. The rejection was expected by the marketplace. Now, May faces a no confidence vote Wednesday, which she is expected to survive. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Focus in the U.S. will be on quarterly corporate earnings reports.

The important outside markets today see the U.S. dollar index slightly higher following strong gains on Tuesday. Meantime, Nymex crude oil prices are slightly lower and trading just below $52.00 a barrel. Brent crude oil futures are presently trading just above $60.00 a barrel.

U.S. economic data due for release Wednesday includes the Federal Reserve’s beige book, the weekly MBA mortgage applications survey, import and export prices, the NAHB housing market index and the weekly DOE liquid energy stocks report. Several major U.S. economic reports have been postponed because of the continuing U.S. government partial shutdown.

–Jim

Continue Reading