Daily Morning Report

Thursday, July 12–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

U.S. President Trump is in Europe meeting with European leaders, with a meeting with Russian President Vladimir Putin scheduled for next Monday. The marketplace will watch Trump’s meetings closely. The just-concluded NATO meeting was declared a success by Trump.

The June U.S. consumer price index (CPI) report due out on Thursday morning is seen being up 0.2% from May. The June producer price index report, released on Wednesday morning, was also up 0.2% from May.

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The U.S.-China trade war has hammered the grain markets recently, as grain market prices are at or near their recent for-the-move lows. Weather in the U.S. Corn Belt has been non-threatening for the corn and soybean crops, with USDA crop ratings very high for this time of year. However, U.S. export demand for corn and soybeans has been strong recently, and it’s my bias that grain prices at present levels are under-valued based upon world supply and demand fundamentals. At some point the extremely bearish psychology in the grain markets will change, and probably sooner that most market watchers reckon. Stay tuned!

Wednesday, July 11–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The U.S. has targeted China with 10% tariffs on another $200 billion in Chinese product imports, and China again responded with another threat to retaliate. The U.S.-China trade war has at least temporarily cast a pall over world equity markets at mid-week.

U.S. President Trump is in Europe today meeting with European leaders, with a meeting with Russian President Vladimir Putin later this week. The marketplace will watch Trump’s meetings closely, as the U.S. president has had harsh words for European leaders regarding trade and their lack of financial support for NATO.

The important U.S. economic data due out this week includes the producer price index on Wednesday and the consumer price index on Thursday. Today’s PPI report for June is forecast up 0.2% from May, with the June CPI report on Thursday also seen up 0.2% from May.

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Tuesday, July 10–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. There continues to be little risk aversion in the marketplace at present, despite a U.S.-China trade war that is brewing.

In overnight news, the closely watched German ZEW economic sentiment indicator fell to its lowest level in nearly six years with a reading of -24.7 in July. The June reading was -16.1.

The important U.S. economic data due out this week includes the producer price index on Wednesday and the consumer price index on Thursday.

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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 that the USDX has backed down recently, and the price uptrend is now in jeopardy. More losses in the USDX this week would negate the price uptrend and suggest a market top is in place. A top in the USDX would be a bullish element for the raw commodity sector, as many major commodities are priced in U.S. dollars on the world markets. Stay tuned!

Monday, July 9–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

There were no major markets-moving news developments over the weekend. Key U.S. economic data released this week includes the producer price index on Wednesday and the consumer price index on Thursday.

One worrisome development among economists in recent months is the very flat U.S. Treasury yield curve (the yield difference between the 2-year and 10-year notes) that has now fallen to a level below 0.3%. If the yield curve inverts, whereby the 2-year note yield rises above the 10-year note yield, such would strongly suggest a U.S. recession is on the horizon. The very closely watched yield curve and its potential for inverting could keep the Federal Reserve from raising U.S. interest rates as quickly as it would like—given the present stronger U.S. economic growth pace.

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