Daily Morning Report

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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Monday, November 5–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

Expectations for a U.S.-China trade deal have been ratcheted down early this week, following some positive signs on the matter late last week. President Trump late last week sounded upbeat on a deal being reached soon with China. However, Trump’s chief economic advisor Larry Kudlow then downplayed any imminent breakthrough on the U.S.-China trade war.

In another sign that China’s economy is being significantly impacted by the trade war with the U.S., a report over the weekend showed China’s service sector slowed to a 13-month low.

Focus in the U.S. is on Tuesday’s mid-term elections, which many believe will be a referendum on the performance of President Trump. Gains by the Democrats would likely be bearish for the U.S. stock market.

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The gold market saw good price gains on Thursday as the U.S. dollar index sold off sharply. The yellow metal bulls did regain some technical momentum on the rally, but need to show more power soon to suggest a price uptrend can be sustained. It’s likely going to take some geopolitical tensions heating up to significantly boost the gold market–and that is entirely possible. Stay tuned!

Friday, November 2–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor attitudes are upbeat amid recent proclamations by U.S. President Trump and Chinese President Xi Jinping that suggest the world’s two largest economies are coming closer together to at least formal negotiations on trade. Trump late Thursday tweeted he had a “long and very good” conversation with Xi. Other reports said Trump has asked his advisors to draw up a trade agreement with China. This is the most positive rhetoric coming from both sides in months.

The Chinese yuan also gained against the U.S. dollar on the China-U.S. trade developments.

Focus in the U.S. is turning to next week’s mid-term elections, which many believe will be a referendum on the performance of President Trump. Gains by the Democrats would likely be bearish for the U.S. stock market.

The key outside markets today see the U.S. dollar index lower again following solid losses Thursday. The USDX is seeing a normal corrective pullback after hitting a 16-month high on Wednesday. Meantime, December Nymex crude oil prices are slightly weaker after hitting a 4.5-month low on Thursday, and are presently trading around $63.50 a barrel.

The key U.S. economic data point of the week, if not the month, will be Friday morning’s November employment report from the Labor Department. The key non-farm payrolls number is forecast to come in at up 188,000. However, Wednesday’s ADP national employment report reading of up 227,000 suggests Friday’s jobs report could be stronger than forecast.

Other U.S. economic data due for release Friday includes the international trade report, manufacturers’ shipments and inventories and the global manufacturing purchasing managers index.

–Jim

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