Daily Morning Report

Tuesday, November 13–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed overnight. Asian shares were down and European stock indexes were mostly up. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following steep losses suffered on Monday. Volatility in the U.S. stock market has heated up again early this week. Many traders and investors are spooked by the recent sharp drop in crude oil prices.

Nymex crude oil futures prices are lower again today, hit an eight-month low overnight and are trading around $58.50 a barrel.

Meantime, the U.S. dollar index is trading slightly lower on a mild corrective pullback after soaring to a 1.5-year high on Monday.

European investors are unsettled as Tuesday is the day Italy’s budget is supposed to fall into line with the constricts of the European Union budget process. Meantime, reports said U.K. Prime Minister Theresa May has rejected the latest European Union Brexit proposal. The Euro currency fell to a 16-month low against the U.S. dollar on Monday.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index and the monthly Treasury budget statement.

–Jim

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The U.S. dollar index is a basket of six major world currencies weighted against the greenback. The USDX this week has powered to a 16-month high, due in part to a U.S. economy that is diverging with the other major world economies. The U.S. economy his growing at a very good clip not seen in years, while most of the other major world economies continue to limp along. U.S. interest rates are also on the rise, and at a faster pace than the other major world economies. That’s also bullish for the U.S. currency as world investors seek out higher returns in U.S. assets that have to be purchased in U.S. dollars. Stay tuned!

Monday, November 12–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed overnight, with European shares mostly weaker and Asian shares mostly firmer. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.

China’s stock market did post a modest rebound Monday as Alibaba’s “singles day” sale saw Chinese consumers buy $30.8 billion in goods on-line Sunday. That beat last year’s 24-hour total of $25.3 billion.

The U.S. government is closed today for the Veterans Day holiday.

The key “outside markets” today find the U.S. dollar index solidly higher and hitting a 16-month high overnight. The Euro currency hit a 16-month low against the greenback. Meantime, Nymex crude oil futures prices are firmer and trading around $60.50 a barrel after hitting a seven-month low on Friday. Reports today say Saudi Arabia will cut its oil exports and prod the OPEC oil cartel to lower its collective crude oil production, in the wake of the recent steep downdraft in oil prices.

There is no major U.S. economic data due for release Monday, due in part to the federal holiday.

–Jim

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Friday, November 9–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mostly down overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on another corrective pullback from Wednesday’s solid gains.

Global investors are spooked by the big drop in crude oil prices the past few weeks. Some are saying the oil market is now in a bear market as prices have dropped 20% from their peak. Nymex crude oil prices are lower again today, hit a seven-month low and are now trading below $60.00 a barrel. The severely down-trending crude oil market is also a bearish element for most of the raw commodity sector.

Part of the weakness in oil prices late this week could be coming from reports Saudi Arabia is studying the feasibility of dissolving the OPEC oil cartel. Reports this week said the U.S. is now pumping around 11.5 million barrels of oil a day. Indeed, OPEC is nowhere near the world power player in the oil market that it was even 10 years ago.

Despite some upbeat economic data from China on Thursday, Asian markets are still worried about the overall health of the world’s second-largest economy. Reports today said Chinese auto sales fell 12% in October, from a year ago.

The U.S. economic highlight of the day Friday will be the producer price index report for October, which is forecast at up 0.3% from September. Worldwide inflation has generally been creeping higher in recent months, although not yet deemed problematic.

The other key “outside market” today finds the U.S. dollar index slightly higher. The USDX has backed down from its 16-month high scored last week, but the greenback bulls still have the solid overall near-term technical advantage.

Other U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey and monthly wholesale trade.

–Jim

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The U.S. stock indexes have made strong rebounds from the sharp declines seen during October, to produce bullish V-Bottom reversal patterns. The S&P and Nasdaq bulls have good upside technical momentum, but prices are still well below the September highs. Even with the solid rebound in the U.S. stock indexes the past two weeks, bulls still have heavy lifting to do in the near term to suggest the September highs can be challenged or taken out on the upside. Stay tuned!

Thursday, November 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

European stock markets were mixed overnight, while Asian shares were mostly firmer. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on a corrective pullback from Wednesday’s solid gains.

Risk appetite in the world marketplace is mostly upbeat following the U.S. mid-term elections that produced a divided Congress.

In overnight news, upbeat economic data out of China defied expectations that its trade war with the U.S. is crimping its economy. China’s exports in October rose by 15.6%, year-on-year. That handily beat expectations of an 11% increase. Imports in October were up 21.4%, year-on-year. Imports from the U.S. dropped 1.8%. This data suggests China could be in no hurry to settle its trade dispute with the U.S. However, as has been the case for years, some do question the veracity of China’s economic numbers.

Meantime, economic data out of the European Union showed the Euro zone’s 2018 economic growth is seen at 2.1%, with 2019 GDP seen at 1.9% and then at 1.7% in 2020. The report estimates 2018 and 2019 inflation for the Euro zone at an annual rate of 1.8%.

Focus today is on the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Wednesday morning and ends with a statement Thursday afternoon. No change in U.S. interest rates is expected. As always, traders will scrutinize wording of the FOMC statement and Chairman Jay Powell’s remarks at his press conference, for clues on the future direction and timing of U.S. monetary policy.

The key “outside markets” today find the U.S. dollar index higher on a rebound from selling pressure seen this week. Meantime, Nymex crude oil prices are slightly higher and trading just below $62.00 a barrel. Nymex oil prices this week hit a seven-month low.

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

–Jim

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