Daily Morning Report

Monday, June 18–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly weaker overnight. China and Hong Kong markets were closed today for a holiday. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Traders are in a risk-averse mood to start the trading week. World trade war concerns continue to be on the front burner of the marketplace, as the world’s two largest economies—the U.S. and China—square off.

The key “outside markets” today find the U.S. dollar index firmer and not far below last week’s 11-month high. Meantime, Nymex crude oil prices are modestly lower, hit a two-week low overnight and are trading around $64.50 a barrel.

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Friday, June 15–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. World trade war concerns are on the front burner of the marketplace late this week.

The Trump administration is set to levy $100 billion of new tariffs on Chinese imports as soon as today. It is expected that China will again retaliate with its own tariffs on U.S. imports, with agriculture products in the crosshairs. Commodity market prices have been hit by worries of a full-blown trade war between the leading economies of the world.

Traders and investors are still buzzing about the plunge in the Euro currency and big rally in the U.S. dollar index on Thursday. The surprisingly dovish European Central Bank meeting results on Thursday had a major impact on the world foreign exchange markets.

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See on the daily bar chart that November soybean futures that prices have careened lower and on Thursday hit a nearly 10-month low. While the bears are in firm overall near-term technical control, the market is well overdone on the downside. See at the bottom of the chart that the Relative Strength Index (RSI) has moved to its lowest level in over a year. Any RSI number below 30.00 suggests a market is oversold and due for at least a corrective bounce. And don’t forget we are now into the growing season for U.S. soybeans, during which time weather market scares pop up quickly. Stay tuned!

Thursday, June 14–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly weaker today. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The U.S. interest rate hike on Wednesday has reminded world traders and investors that most of the major central banks of the world are likely to tighten their monetary policies in the coming months.

The European Central Bank is holding its monetary policy meeting this morning. No change is expected in ECB policy at this meeting, but the central bank is still on a path of easy money, for now. ECB President Mario Draghi’s press conference after the meeting will be closely scrutinized for clues on the future moves from the central bank. Many think Draghi will sound a more hawkish tone on monetary policy at his press conference.

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Wednesday, June 13–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were narrowly mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

Attention is on the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday and ends Wednesday afternoon with a statement. It is widely expected the FOMC will raise U.S. interest rates by 0.25% at this meeting. Fed Chair Jerome Powell will have a press conference following the meeting. Traders will parse Powell’s comments for clues on the pace of future U.S. rate hikes.

The European Central Bank holds its monetary policy meeting on Thursday. No change is expected in ECB policy, but the central bank is still on a path of easy money that is keeping its interest rates very low, and diverging with those of the U.S. More weak economic data coming out of the EU today—industrial production that fell more than expected—is another clue the ECB has to keep its monetary policy very accommodative. By the end of the year the spread between key U.S. and Euro zone interest rates is expected to be around 3.0%.

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U.S. 10-year Treasury note futures prices have given back about half of the gains seen in late May and the bears have regained the overall near-term technical advantage. If the bulls can have a good week this week, and see prices close at or near the weekly high on Friday, then technical odds would suggest prices can at least trade sideways, if not sideways to higher in the near term. Stay tuned!