Daily Morning Report

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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Wednesday, November 7–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

Tuesday’s U.S. mid-term elections turned out as many had expected and saw the Republicans maintain control of the Senate but the Democrats gained control of the House of Representatives. The world marketplace appears comfortable with a split U.S. Congress and likely gridlock on major new legislation over the next two years.

Many believed the U.S. elections were a referendum on the performance of President Trump. Many would argue the U.S. elections did not turn out too bad for Trump, noting that history shows the party not in control typically fares better in mid-term elections.

The U.S. dollar is taking a hit following the elections. There are now notions any new Trump fiscal policy proposals that would be pro-growth and pro-business will get mired down in Congress and die.

Today the Federal Reserve’s Open Market Committee (FOMC) meets for a two-day meeting to discuss U.S. monetary policy, with a statement due Thursday afternoon. No change in interest rates is expected at this meeting. 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 other key “outside market” today finds Nymex crude oil prices higher and trading around $62.50 a barrel.

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

–Jim

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The soybean market has seen a solid price rebound recently, to suggest a harvest low was put in place in September. The bulls have more work to do to suggest a price utprend can be sustained. A move in January soybean futures above stiff chart resistance at the October high of $9.06 1/4 would provide the bulls with the power to then suggest prices could trend sideways to higher into the end of the year. Stay tuned!

Tuesday, November 6–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

Focus of the world marketplace is on today’s U.S. mid-term elections, which many believe are a referendum on the performance of President Trump. Big gains by the Democrats would likely be bearish for the U.S. stock market and would signal gridlock in Congress the next two years.

In overnight news, the European Union reported a hotter reading on its inflation today. The Euro zone September producer price index came in at up 0.5% from August and up 4.5%, year-on-year.

On Wednesday and Thursday the Federal Reserve’s Open Market Committee (FOMC) meets to discuss U.S. monetary policy, with a statement due Thursday afternoon. No change in interest rates is expected at this meeting.

The key outside markets today see the U.S. dollar index slightly higher. Meantime, December Nymex crude oil prices are slightly weaker and trading just below $63.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the global services PMI.

–Jim

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