Daily Morning Report

Thursday, November 1–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, on an extension of a strong rebound from Monday’s sell-off that drove the indexes to six-month lows. Stock market traders and investors are glad to have the historically turbulent month of October out of the way and are now hoping for a seasonal Santa Claus rally. However, those thinking the world stock markets have seen the “all clear” siren as the calendar turns to November are likely going to be disappointed.

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.

The key outside markets today find the U.S. dollar index solidly lower on a downside correction from recent strong gains that pushed the index to a 16-month high on Wednesday. Meantime, December Nymex crude oil prices are weaker, hit a nine-week low overnight and are trading just below $65.00 a barrel. Recent technical damage on the charts suggests more downside for crude oil in the near term.

The key U.S. economic data point of the week, if not the month, will be Friday’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.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the U.S. manufacturing purchasing managers index, construction spending and the ISM manufacturing report on business.

–Jim

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The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart for the USDX that prices this week have powered to a multi-month high. The dollar is seeing appreciation from a strong U.S. economy and on safe-haven demand amid wobbly world stock markets. Remember that trends in the currency markets tend to be stronger and longer-lasting that price trends in other markets. Thus, the dollar could continue to gain in the coming weeks, or longer. Stay tuned!

Wednesday, October 31–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed to mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. There is still strong near-term technical evidence the U.S. stock indexes have put in market tops. Volatility in the U.S. stock market could still appear at any time, as seen with Monday afternoon’s price swoon.

Today is the last trading day of the month, which makes it a more important trading day, from a technical chart perspective.

China’s official purchasing managers’ index also fell to 50.2 in October from 50.8 in September. The October number is the lowest in two years. A reading below 50.0 suggests contraction in the sector.

The Chinese yuan has dropped to a 10-year low against the U.S. dollar this week. There is a debate on whether the Chinese government wants the yuan to depreciate to gain world trade advantages. Or, the government may want to stem the yuan’s slide due to fears of capital flight out of China.

In another sign of the stark divergence between the U.S. and European Union economies, the Euro zone reported its unemployment rate for October today, at 8.1%. The U.S. rate is 3.7%. Meantime, the Euro zone inflation rate rose to a nearly six-year high of 2.2%, basis its latest consumer price index report for October issued today.

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Tuesday, October 30–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed to mostly lower overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on an upside correction following Monday’s sell off that pushed the indexes to six-month lows. There is still strong near-term technical evidence the U.S. stock indexes have put in market tops.

Reports Monday afternoon said the Trump administration will impose tariffs on all Chinese goods imported into the U.S., if the meeting between Presidents Trump and Xi Jinpin in Argentina in late November do not produce results. This news helped sink the U.S. stock market Monday afternoon.

In overnight news, the Euro zone reported its latest quarterly gross domestic product rose only a paltry 0.6% in the third quarter, year-on-year. That compares to the latest U.S. GDP third-quarter growth rate of 3.5%.

The key outside markets today find the U.S. dollar index higher and setting a new for-the-move high overnight. Meantime, November Nymex crude oil prices are lower and trading around $66.50 a barrel.

The key U.S. economic data point of the week, if not the month, will be Friday’s November employment report from the Labor Department.

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 indexes, and the consumer confidence index.

–Jim

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The December e-mini S&P stock index futures are in a steep downtrend on the daily bar chart, after hitting a six-month low last Friday. The bulls will be happy to see the calendar turn to November, after the historically turbulent month of October delivered another nasty blow to the U.S. stock market. Bulls are still in serious near-term technical trouble, to suggest sideways-at-best trading in the near term, if not new lows carved out. Stay tuned!

Monday, October 29–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed to mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. European stock indexes were mostly up, following news that the S&P Global Ratings agency on Friday did not downgrade Italy’s debt rating. China’s stock market suffered more losses Monday amid investor worries about the world’s second-largest economy.

U.S. stock indexes on Friday fell to six-month lows before posting rebounds on the day. Stock market bulls will be glad to get the historically turbulent month of October out of the say and hopefully get a “Santa Claus rally” this year.

In overnight news, German Chancellor Angela Merkel has announced she will step down as leader of her Christian Democratic party after disappointing election results. Europe market watchers say that’s a sign of Merkel’s decline in power in Germany and in the European Union.

The key outside markets today find the U.S. dollar index higher and hovering near Friday’s nine-week high. Meantime, November Nymex crude oil prices are weaker and trading around $67.50 a barrel.

The key U.S. economic data point of the week, if not the month, will be Friday’s November employment report from the Labor Department.

U.S. economic data due for release Monday includes personal income and outlays and the Texas manufacturing outlook survey.

–Jim

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