Daily Morning Report

Tuesday, November 27–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mostly lower overnight. Asian stock indexes were mostly firmer. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

Focus this week is on the upcoming Group of 20 meetings that begin late this week in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war that appears to show no signs of de-escalating. President Trump made more hardline comments on the matter Monday. There is general agreement that the trade war is hurting China’s economy much more than the U.S. economy.

There is talk in the marketplace recently that the U.S. Federal Reserve may take a more dovish tone on its monetary policy due to notions the recent strong U.S. economic growth may be quickly decelerating. The Federal Open Market Committee meets to discuss monetary policy in late December. It’s widely expected the Fed will slightly raise its key Fed funds target range in December. However, a commentary in the Wall Street Journal today said Fed monetary policy will be “wide open” for 2019, which could lead to more uncertainty in the marketplace.

Nymex crude oil futures prices are slightly firmer today on mild short covering and a corrective rebound after hitting a 13-month low of $50.10 on Monday. Crude prices are down around 20% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week.

The other key outside market today finds the U.S. dollar index trading slightly higher but not far below this month’s 1.5-year high.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the quarterly house price index, and the consumer confidence index.

–Jim

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Monday, November 26–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mostly firmer overnight, as trader and investor appetites are more upbeat following a Brexit deal between the U.K. and the EU that appears a bit closer to being agreed upon, but still needs U.K. Parliament approval. U.S. stock indexes are pointed solidly higher at the New York openings.

Focus this week will be on the upcoming Group of 20 meeting later this week in Argentina that will feature a face-to-face meeting between the U.S. and Chinese presidents. The world’s two largest economies are locked in a heated trade war that appears to show no signs of de-escalating.

There is also talk in the marketplace just recently that the U.S. Federal Reserve may take a more dovish tone on its monetary policy due to notions the recent strong U.S. economic growth may be backing off. The Federal Open Market Committee meets to discuss monetary policy in December.

Nymex crude oil futures prices are firmer today on short covering and a corrective rebound after hitting a 13-month low of $50.10 overnight. Crude prices are down around 20% following the recent sharp declines.

The other key outside market today finds the U.S. dollar index trading lower but not far below this month’s 1.5-year high.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.

–Jim

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The Nymex crude oil futures market on Friday dropped to a 13-month low below $52.00 a barrel as the sharp drop in the market continues. In early October crude hit a multi-month high above $76.00 a barrel and traders were talking “an 80 handle” soon. Since, then prices have sold off sharply amid rising U.S. crude production and worries about slowing world economies. It’s likely than in the near term oil prices will drop below $50.00 a barrel–and don’t rule out a challenge of $40.00 in the coming weeks. Stay tuned!

Friday, November 23–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mixed overnight, while Asian equities were mostly down. Japan’s markets were closed for a public holiday. U.S. stock indexes are pointed lower at the New York opening. Recent losses have wiped out this year’s gains in the U.S. stock indexes. It appears the U.S. stock indexes have put in major market tops.

The U.S.-China trade war is not improving and could be escalating. Reports say the U.S. is talking to its allies regarding boycotting a Chinese technology firm due to cybersecurity risks. This news followed the mid-week report from the U.S. Trade Representative that accused China of continued theft of U.S. technology and espionage. U.S. President Trump and Chinese President Xi are scheduled to meet face-to-face in Argentina next week.

Nymex crude oil futures prices are sharply lower today and hit 13-month low of $51.73 a barrel. The steep drop in oil prices has world stock market traders uneasy, despite the fact lower retail gasoline prices will boost consumer spending, especially in the U.S.

The other key outside markets today find the U.S. dollar index trading higher and not far below this month’s 1.5-year high.

History shows today is likely to see a very quiet trading session in the U.S., following the U.S. Thanksgiving holiday on Thursday. Many U.S. markets close early today. Friday is the “Black Friday” U.S. sale affair that finds many traders and investors out for the day, shopping for Christmas gift deals.

U.S. economic data due for release Friday is light and includes the U.S. flash services and manufacturing PMIs.

–Jim

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Wednesday, November 21–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mostly firmer overnight. U.S. stock indexes are also pointed higher at the New York opening, following strong losses on Tuesday that wiped out this year’s gains in the stock indexes. It still appears the U.S. stock indexes have put in at least near-term tops, if not major market tops.

Today is likely to see a quieter trading session in the U.S., ahead of the U.S. Thanksgiving holiday on Thursday. Many U.S. markets close early Wednesday. Friday is the “Black Friday” sale affair that finds many traders and investors out for the day, shopping for Christmas gift deals.

In overnight news, the Paris-based OECD think tank forecast slowing global economic growth in 2019—to 3.5% from 3.7% in its previous forecast.

The key outside markets today find the U.S. dollar index trading weaker but not far below this month’s 1.5-year high. Meantime, Nymex crude oil futures prices are higher on a corrective rebound from Tuesday’s sharp losses that pushed prices to a 12-month low of $52.77 a barrel.

U.S. economic data due for release Wednesday includes the weekly jobless claims report, the weekly MBA mortgage applications survey, durable goods orders, leading economic indicators, the University of Michigan consumer sentiment survey, existing home sales and the weekly DOE liquid energy stocks report.

–Jim

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The natural gas futures market has recently shot to a 4.5-year high, amid extreme daily price volatility that has blown traders and fund managers out of the water–and out of business. Fundamentally, colder weather in the U.S. and worries about natural gas storage supplies keeping up with demand have provided the bulls with upside energy. Look for more daily price volatility in the near term and the bears still have the firm overall near-term technical advantage. Stay tuned!