Daily Morning Report

Wednesday, October 10–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mostly lower overnight. U.S. stock indexes are poised for weaker openings when the New York day session begins.

The markets appeared to take in stride another admonishment to the Federal Reserve from President Trump. Trump Tuesday afternoon said the Fed is acting too quickly on raising interest rates, given the low inflationary pressures at present.

In overnight news, the U.K.’s gross domestic product grew by 0.7% in the three months ending in July versus the previous three months.

The key U.S. data point of the day will be the producer price index report for September, which is expected to come in at up 0.2% from August.

The outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oil prices are near steady and trading just below $75.00 a barrel. Hurricane Michael in the U.S. Gulf of Mexico has shut in a good portion of U.S. oil production in the region.

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There is still some risk aversion in the world marketplace this week. And there are now early chart clues the U.S. stock indexes have put in at least near-term market tops, if not major tops. The S&P and Nasdaq stock indexes last Friday posted bearish weekly low closes and their near-term price uptrends have stalled out. Remember, too, that it’s October–a historically unkind month to the stock market. World equity markets are still rattled by rising government bond yields that are pulling investor interest away from stocks. The benchmark U.S. 10-year Treasury note on Tuesday hit a yield of 3.25%, which is a 7.5-year high. Stay tuned!

Tuesday, October 9–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

Global stock markets were mixed overnight. U.S. stock indexes are poised for weaker openings when the New York day session begins. There is still some risk aversion in the world marketplace Tuesday. And there are now early chart clues the U.S. stock indexes have put in at least near-term market tops, if not major tops.

World equity markets are still rattled by rising government bond yields that are pulling investor interest away from stocks. The benchmark U.S. 10-year Treasury note on Tuesday hit a yield of 3.25%, which is a 7.5-year high.

The world’s two largest economies are continuing to escalate their trade war that has also now turned into a war of words. The U.S. secretary of state and Chinese foreign minister exchanged harsh words on Monday.

The International Monetary Fund on Monday lowered its world economic growth forecasts due to the U.S.-China trade war and the presently shaky secondary world currency markets. This week, the Chinese yuan is in focus as it continues to depreciate against the U.S. dollar even as Chinese monetary officials work to stem the yuan’s slide.

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Monday, October 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly lower overnight, with steep losses seen in the Chinese stock market after it was closed last week for a public holiday. Chinese monetary officials during the weekend loosened monetary policy a bit more but that did not stop their stock market sell off.

World equities are still pressured by rising government bond yields that are pulling investor interest away from stocks. U.S. stock indexes are in very mature bull market runs that have many wondering if the end is near. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The U.S. government, including the Treasury bond cash market, is closed for the Columbus Day holiday today.

Risk-off attitudes to start the trading week are also being perpetuated by the new Italian anti-establishment government not falling into line with European Union rules on a budget.

The key outside markets today find the U.S. dollar index higher, on safe-haven demand. Meantime, November Nymex crude oil prices are lower on profit taking and trading around $73.50 a barrel.

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Friday, October 5–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly lower overnight, still pressured by rising world government bond yields. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Chinese markets have been closed all week for a public holiday.

Traders are awaiting this morning’s U.S. Labor Department Employment Situation Report for September—arguably the most important U.S. data point of the month. The key non-farm payrolls number is expected to come in up 180,000. However, Wednesday’s U.S. ADP national employment report for September showed a gain of 230,000 jobs, which hints that Friday’s employment report will come in hotter than expected, which if is the case would likely further stoke U.S. bond yields. The U.S. wage-growth figure will also be closely watched, to see if the annual pace moves above 3.0%, as it was 2.9% in the August report.

The U.S. Treasury 10-year note yield rose to a seven-year high above 3.20% this week. Strong U.S. economic data recently is driving U.S. bond and note prices lower.

The key outside markets today find the U.S. dollar index firmer. Meantime, November Nymex crude oil prices are firmer and trading just below $75.00 a barrel.

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A feature in the marketplace late this week is rising U.S. Treasury yields that saw the benchmark 10-year note yield rise to a seven-year high above 3.20% today. Strong U.S. economic data recently is driving U.S. bond and note prices lower. Other world government bond markets are also seeing their yields rise, in sympathy to the U.S. This is yet another clue that creeping price inflation could become problematic down the road. That’s a bullish scenario for hard assets like raw commodities, and bearish for paper assets like stocks and bonds.