Daily Morning Report

Tuesday, January 15–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are also pointed up when the New York day session begins.

The global equities markets were boosted overnight in part on news China’s central bank said it will act to stimulate the world’s second-largest economy via tax cuts, more credit availability to smaller companies and infrastructure spending. This news follows some very weak import and export data reported by China on Monday.

However, weak economic numbers coming from Germany, the work horse of the European Union, did dampen enthusiasm among traders and investors in Europe. Germany’s gross domestic product in 2018 was today reported up 1.5% versus up 2.2% in 2017. The 2018 GDP reading was the lowest in five years. China is Germany’s biggest trading partner.

Brexit is back on the front burner of the marketplace this week. Voters in the U.K. later today are likely to reject Prime Minister Theresa May’s latest Brexit plan, which could put the entire Brexit situation into serious turmoil. Such would likely prompt Europeans to seek out safe-haven assets such as gold.

The U.S. government partial shutdown is the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.

The important outside markets today see the U.S. dollar index higher. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are higher and trading just above $51.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the producer price index, the Empire State manufacturing survey, and the IDB/TIPP economic optimism index. There are also several Federal Reserve officials slated to give speeches today.

–Jim

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The Nymex crude oil futures market has seen a solid rebound from the December low, including negating a downtrend line. Now, bulls are working on a fledgling price uptrend. This week’s trading action will be extra important for the oil market. Oil traders will likely find out if the recent rally was just a corrective bounce in a market that is still overall technically bearish. Or, the price uptrend will be maintained to give the bulls even more confidence prices have bottomed out and will continue to trade sideways-to-higher in the coming weeks. Stay tuned

Monday, January 14–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were lower overnight, while U.S. stock indexes are also pointed down when the New York day session begins.

There is keener risk aversion in the market place to start the trading week, following some very downbeat economic news coming out of China. China’s exports in December were down a surprising 4.4%, year-on-year. Exports were up 5.4% in November. China’s imports fell 7.6% in the same period. In past months both imports and exports saw double-digit gains. The trade war with the U.S. has really hurt China’s economy, the latest import and export numbers suggest. Such will likely embolden the U.S. is its trade posture against China. Last week the two sides met in Beijing and are scheduled to meet next in the U.S.

There was also dour economic news coming out of the European Union Monday. The Euro zone’s factory output dropped 1.7% in November from October, for the largest monthly drop in three years. The reading was down 3.3%, year-on-year, for the biggest drop in six years.

In other overnight news, Newmont Mining and Goldcorp reported the two companies plan to combine to create the world’s largest gold miner.

Brexit is back in the minds of traders and investors in Europe. Voters in the U.K. on Tuesday are likely to reject Prime Minister May’s latest Brexit plan, putting the entire Brexit situation into serious turmoil.

The U.S. government partial shutdown is now the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.

The important outside markets today see the U.S. dollar index slightly lower. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are lower and trading just below $51.00 a barrel.

There is no major U.S. economic data due for release Monday.

–Jim

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Friday, January 11–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mixed overnight, while Asian stocks were slightly up, in quieter trading and on some normal consolidation from recent gains in most stock indexes. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

The generally upbeat trader and investor attitudes this week are due to optimism the U.S. and China—the world’s two largest economies—are moving closer to a resolution of their trade war. Perceptions of a more dovish U.S. Federal Reserve monetary policy in 2019 are also boosting marketplace sentiment. And a big price rebound in the crude oil market the past couple weeks is also a positive for stock, financial and commodity markets.

The U.S. economic data point of the day Friday is the consumer price index for December, which is expected to come in at up 0.1% from November and up 1.9%, year-on-year. Recent inflation data from around the globe points to a tamer outlook on rising prices in the coming months.

There is no other U.S. economic data due for release today, due to the continued U.S. government partial closure that is impacting government reports.

The important outside markets today see the U.S. dollar index slightly lower. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are near steady and trading around $52.50 a barrel level.

–Jim

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The May soybean futures contract shows a choppy price uptrend has been in place since mid-September. The bulls’ next upside price objective is to push prices above solid chart resistance at the December high of $9.53. If the bulls can clear that technical hurdle, the door would be opened to a challenge of major psychological resistance at $10.00. Stay tuned!

Thursday, January 10–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. The global indexes are experiencing normal downside corrections today, following recent good gains.

The Wednesday afternoon release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC) were deemed as favoring the dovish side of monetary policy, which helped to drop the U.S. dollar index to a 2.5-month low on Wednesday. Two Fed officials on Wednesday also suggested there may not be further interest rate cuts in 2019. Federal Reserve Chairman Jerome Powell speaks to the Economic Club of Washington, D.C. at midday today. Several other Federal Reserve officials also are on tap for speeches today.

The USDX is seeing a mild corrective bounce Thursday morning, but has been trending sideways to lower on the daily chart for the past month. Meantime, Nymex crude oil prices are weaker and trading just above $52.00 a barrel level. Technical evidence is building the oil market will trade at least sideways in the coming weeks, if not sideways to higher.

U.S. economic data due for release Thursday includes the weekly jobless claims report, monthly wholesale trade, and monthly chain store sales.

–Jim

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