Daily Morning Report

Monday, May 21–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.

The world marketplace has been assuaged by news the U.S. and China have agreed to set aside their trade dispute and not slap tariffs on each other’s goods, for now.

In other news, European traders and investors are still nervous regarding the potential for Italy’s anti-establishment parties to form a government, and then pulling out of the European Union. Such has caused the yield spread between German and Italian government bonds to widen substantially.

The benchmark 10-year U.S. Treasury note yield is trading around 3.07% on Monday morning, on some increasing concerns about rising inflationary pressures.

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The U.S. dollar index is a basket of six major world currencies weighted against the greenback in one composite price. See on the daily bar chart the USDX continues to push higher and has this week hit a five-month high. The appreciating dollar is impacting secondary currencies significantly, in that those currencies are losing purchasing power on world markets, where many products are priced in U.S. dollars. The Turkish lira, the Brazilian real and the Chinese yuan currencies have all experienced serious depreciation against the greenback. Central bankers are starting to take note of the secondary currency markets, and are becoming worried about dislocations in the secondary currency markets spreading into the major currencies–a contagion. Stay tuned!

Friday, May 18–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mixed in uneventful trading overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The relatively upbeat trader and investor attitudes in the market place continue to support buying interest in equities.

A feature in the marketplace this week is rising world government bond yields. The U.S. 10-year Treasury note is yielding above 3.0%. The rise in U.S. Treasury yields (falling prices) is a bit surprising, given some geopolitical storm clouds on the horizon.

The key “outside markets” today find Nymex crude oil prices higher and trading above $71.00 a barrel. Meantime, the U.S. dollar index is slightly higher and hit another five-month high overnight.

There is no major U.S. economic data due for release Friday.

–Jim

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Thursday, May 17–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

European markets are a bit concerned about Italy and notions that country may threaten to pull out of the Euro zone bloc if the EU does not write off some of its heavy financial debt owed to the bloc. This situation will only add to the recent selling pressure against the Euro currency, and in turn be a bullish element for the surging U.S. dollar.

The U.S. trade meetings with China in Washington, D.C., begin in earnest today. Also, an agreement on an updated NAFTA trade deal between the U.S., Canada and Mexico is unlikely to be announced late this week, as the Trump administration had hoped would be the case.

The key “outside markets” today find Nymex crude oil prices higher and hitting a 3.5-year high above $72.00 a barrel. Brent crude oil futures prices pushed above $80.00 a barrel today. Meantime, the U.S. dollar index is firmer and hovering near this week’s five-month high.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and the leading economic indicators report.

–Jim

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The gold market was hammered down hard Tuesday and hit a five-month low. Importantly, prices dropped and closed below what was major psychological support at $1,300.00, which now suggests still more selling pressure is coming in the near term. One element that could rescue the sliding gold market is a flare-up in geopolitics that would prompt fresh demand for the safe-haven metal. And it does appear the U.S.-North Korea tensions are on the rise again. Stay tuned!

Wednesday, May 16–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

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

In overnight news, the Euro zone consumer price index for April came in at up 0.3% from March and up 1.2%, year-on-year. Those numbers were in line with market expectations.

Japan’s first-quarter GDP showed a growth rate of -0.2%, which was below forecasts for no change in growth.

Features in the marketplace this week are a surging U.S. dollar index that hit a five-month high overnight, which has in turn put some pressure on raw commodity markets that are priced in greenbacks on world markets. Gold prices dropped sharply on Tuesday and hit a five-month low.

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