Daily Morning Report

Wednesday, January 9–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. Investors are in a good mood this week as reports continue to be positive on the U.S.-China trade talks going on in Beijing. Those talks are expected to end today. “Talks with China are going very well,” President Trump tweeted Tuesday.

The marketplace is awaiting the Wednesday afternoon release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). Traders will parse the report for clues on the direction and timing of Fed policy in the coming year.

St. Louis Federal Reserve President James Bullard overnight said the Fed should refrain from raising interest rates for fear of bringing on a U.S. recession. Bullard is a voting member of the FOMC.

In other overnight news, the Euro zone reported its unemployment rate for November was 7.9% versus 8.0% in October. The November reading was the lowest in 10 years.

The U.S. government shutdown is into its third week, but the matter is currently not a front-burner issue for markets. President Trump addressed U.S. citizens in a speech on the matter Tuesday evening, and leading Democrats countered.

The key outside markets today see the U.S. dollar index slightly lower. The USDX has been trending sideways to lower on the daily chart for three weeks. Meantime, Nymex crude oil prices are higher and trading above the key $50.00 a barrel level. There are chart clues the oil market has bottomed out, including prices pushing back above the important psychological level of $50.00.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

–Jim

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There are early chart clues the Nymex crude oil futures market has put in a price bottom. See on the daily bar chart that a downtrend line has been penetrated on the upside and negated. Also, oil prices tested longer-term technical support at the $42.00 area and then rebounded smartly. A close in prices above major psychological resistance at $50.00 would give the bulls more confidence the oil market has put in a major low and that prices can at least then trend sideways, if not sideways to higher. Stay tuned!

Tuesday, January 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mostly higher overnight, but Asian shares were slightly down. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Traders and investors have keener “risk-on” attitudes the first full week of the new year. Perceived progress on U.S.-China trade talks presently taking place in Beijing, ideas of a more dovish Federal Reserve monetary policy in 2019, and a solid U.S. jobs report last week have perked up the marketplace so far this week.

The upbeat attitudes in Asia were somewhat dented today after technology giant Samsung said its fourth-quarter profits will drop 29% due to “mounting macro uncertainties.” The downbeat Samsung news follows a dour outlook issued by Apple last week.

The U.S. government shutdown is into its third week, but the matter is garnering less attention from the marketplace and is not a front-burner issue. President Trump will address U.S. citizens in a speech on a U.S. southern border wall Tuesday evening.

The key outside markets today see the U.S. dollar index higher on a corrective bounce after hitting a two-month low on Monday. The USDX has been trending sideways to lower on the daily chart for three weeks. Meantime, Nymex crude oil prices are higher and trading just above $49.00 a barrel. There are chart clues the oil market has bottomed out, but the bulls still have heavy lifting to do to suggest a price uptrend can be sustained.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales report, the NFIB small business optimism index, the international trade report (not issued because of government shutdown), and the World Bank global economic prospects report.

–Jim

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Monday, January 7–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mostly weaker overnight, but Asian shares were mostly up. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, on mild corrective pullbacks from strong gains posted Friday.

Trader and investor attitudes are generally upbeat to start the trading week, following the big gains on Wall Street Friday that followed a strong U.S. jobs report released Friday morning. Federal Reserve Chairman Jerome Powell also made comments on Friday that U.S. inflation levels are not problematic and that the Fed will be flexible in its monetary policy, which also assuaged the marketplace. The U.S. and China are holding face-to-face trade talks starting today, amid optimism the world’s two largest economies will make progress on their major trade dispute.

The U.S. government shutdown is into its third week now, but the matter is garnering less attention from the marketplace and is not a front-burner issue.

The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are higher and trading just above $49.00 a barrel. There are early chart clues the oil market has bottomed out, but the bulls still have heavy lifting to do to suggest a price uptrend can be sustained.

U.S. economic data due for release Monday includes manufacturers’ shipments and inventories, the employment trends index, and the ISM non-manufacturing report on business.

–Jim

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The gold market is trending higher and has just poked above what was strong psychological resistance at the $1,300.00 level. Bulls are in technical control at present, to suggest more sideways-to-higher price action forthcoming. The gold market’s recent gains are giving raw commodity market bulls some confidence that 2019 will see the sector show general price gains. Still, keep a close eye on crude oil prices. Crude will have to bottom out (which it may already have, as longer-term chart support at the $42.00 area stopped the decline) for the raw commodity sector to have its markets sustain price uptrends. Stay tuned!

Friday, January 4–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European and Asian stock markets were mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, following big losses Thursday. There are growing hopes the U.S. and China will resolve their major trade dispute in the coming weeks, which has put a bid back into world stock indexes today. China Friday confirmed a meeting between its trade officials and U.S. trade representatives will take place next week.

Traders are awaiting what is arguably the most important U.S. data point of the month: Friday morning’s employment situation report for December from the Labor Department. The key non-farm payrolls number is seen coming in at up 176,000.

The December ADP national employment report, released Thursday morning, came in at up 271,000, which was much higher than the consensus forecast of up 178,000. The December ADP number was the highest growth rate in 2018. This has some market watchers thinking today’s more important jobs number from the Labor Department will come in higher than expected.

In overnight news, China’s central bank eased its monetary policy by cutting the reserve requirement ratio for banks. The move is intended to jumpstart China’s declining economic growth rate.

In other overnight news, the Euro zone inflation rate fell sharply in December. Consumer prices were up 1.6%, year-on-year—down from a rate of up 1.9% in November. The drop in December was mainly due to falling energy prices. Meantime, the producer price index in the Euro zone was down 0.3% in December, month-on-month, and up 4.0%, year-on-year.

The key outside markets today see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are higher and trading just above $48.00 a barrel.

Other U.S. economic data due for release Friday includes the U.S. services purchasing managers index (PMI) and the global services PMI. The weekly DOE liquid energy stocks report is also due for release today.

–Jim

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