The U.S. stock indexes are under strong selling pressure again early this week. If the December e-mini stock index futures drop below strong chart support at the October low (which was very close to occurring as of this writing) then more chart damage would be inflicted to suggest a fresh leg down in prices. The bulls need to make a stand right now, and if they fail then sideways-to-lower price action is likely to continue in the coming weeks. Stay tuned!
Daily Morning Report
Keen Risk Aversion Back in the World Marketplace Tuesday
Tuesday, October 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight as risk aversion has returned to the marketplace amid geopolitical tensions. China’s stock indexes were sharply down after good gains posted Monday. South Korea’s and Japan’s stock markets were also sharply lower. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. indexes are back near their October lows.
Gold prices are sporting good gains today on safe-haven demand.
The Turkish president went on television overnight to explain that the Saudi journalist that was killed in a Saudi consulate in Istanbul was brutally slain in a planned attack. The Saudi kingdom denies involvement in the murder. The U.S. and other Western nations are trying to get to the bottom of the matter, but President Trump has been cautious about the situation, what with the strong U.S. business ties to Saudi Arabia.
The China-U.S. trade showdown is negatively impacting China’s economy and weighing on Asia’s stock markets. Two U.S. warships are presently traveling near China and through the Taiwan Strait, to amplify tensions.
Thursday’s European Central Bank regular monetary policy meeting will be closely watched by the marketplace. No change in EU monetary policy is expected, but ECB chief Mario Draghi’s press conference could provide clues on future moves by the central bank. Also, Draghi could comment on the rift between Italy’s new government and the EU. European stock markets are wobbly this week as the Italian government is scoffing at EU budget rules.
World Stock Markets Up, Led by Big Gains In China Shares
Monday, October 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly firmer overnight. Asian shares gained overnight, led by China’s stock market rallying more than 4% as Chinese economic officials said they are prepared to stimulate the economy, including cutting personal taxes. European stock markets were also up, but worries remain regarding Italy’s budget problems with the European Union, and with Brexit concerns. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
The U.S.-China trade war remains in focus after Trump administration economic advisor Larry Kudlow said China is doing “nothing” to mitigate the matter. Reports last week said President Trump and Chinese leader Xi Jinping will meet at the G20 conference in Argentina in late November.
Thursday’s European Central Bank regular monetary policy meeting will be closely watched by the marketplace. No change in EU monetary policy is expected, but ECB chief Mario Draghi’s press conference could provide clues on future moves by the central bank. Also, Draghi could comment on the rift between Italy’s new government and the EU.
The U.S. economic highlight this week will be the first estimate of third-quarter GDP due out Friday morning. GDP is seen up 3.4% in the third quarter, on an annual basis.
The key outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oil prices are near steady and just above $69.00 a barrel.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
–Jim
Greenback Strong Amid Anxious World Marketplace
The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart that the dollar bulls had a good week amid several geopolitical matters on the front burner of the marketplace that prompted safe-haven demand for the world’s strongest currency. And those geopolitical developments could see at least one of them escalate in the near term. Don’t be surprised to see the dollar index rally beyond chart resistance located at the summertime high in the coming weeks, or sooner. Stay tuned!
World Stock Markets Rebound Friday, but an Uncertain Weekend Looms
Friday, October 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly firmer overnight. China’s stock market rallied after the Chinese government pledged to keep its economy on track and expressed confidence in future growth. This comes after the Chinese stock market dropped to a multi-year low Thursday and the Chinese yuan dropped to a 21-month low against the U.S. dollar. U.S. stock indexes are pointed toward firmer openings when the New York day session begins, on modest corrective bounces after solid losses suffered on Thursday.
In overnight news, China’s gross domestic product grew by 6.5% in the third quarter, year-on-year. That was down from the 6.7% growth rate in the second quarter. A rate of 6.6% was expected for the third quarter. The third-quarter figure was the slowest economic growth pace for China in several years.
The Euro currency has been rattled again this week by recurring trader concerns regarding Italy falling into line with European Union rules on country’s budgets.
And don’t be surprised if trader and investor anxiety upticks as the trading session progresses Friday, heading into a very uncertain weekend. This is mainly due to pending results of an investigation into the disappearance of a Saudi journalist that could be a murder and could involve the Saudi Arabian government. The markets were jolted on Thursday when U.S. Secretary Mnuchin backed out of a high-level business conference being held in Saudi Arabia.
The key outside markets today find the U.S. dollar index slightly higher. Meantime, November Nymex crude oil prices are modestly up and are trading below $69.00 a barrel. Still, oil prices hit a four-week low on Thursday amid concerns about worldwide economic growth that could crimp demand for crude.
U.S. economic data due for release Friday is light and includes existing home sales.
–Jim
World Stock Markets Mixed as Nymex Crude Falls Below $70.00
Thursday, October 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mixed overnight, with European stock indexes mostly firmer and Asian indexes mostly lower. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
Traders and investors are awaiting the results of a Turkish investigation into the disappearance of a Saudi journalist. The Turks say the journalist was killed and the Saudis deny knowing anything about it. This matter is likely to come to a head in the next few days, with President Trump saying results of the investigation are likely yet this week. If the Saudis are complicit, ramifications for the world markets will be significant. Some press reports say the Saudis killed the journalist.
U.S. Treasury bond yields are on the rise again following FOMC minutes released Wednesday afternoon that were deemed a bit hawkish on U.S. monetary policy.
The key outside markets today find the U.S. dollar index slightly lower on a corrective pullback from Wednesday’s solid gains. Meantime, November Nymex crude oil prices are lower, hit a four-week low and are trading around $69.00 a barrel. Brent crude oil has now fallen below the $80.00-per-barrel level. Rising U.S. oil stockpiles this week are bearish for the oil market.