Overnight Recap 1/15/2019

– Awaiting Brexit vote: margin of a government defeat will determine how both markets and PM may respond
– Germany 2018 GDP growth slows to a 5-year low (1.5% v 2.2% y/y)
– Chinese officials said they would step up efforts to spur economic growth

European and Asian stock markets were mostly firmer overnight. U.S. stock indexes are also pointed up when the New York day session begins.

The global equities markets were boosted overnight in part on news China’s central bank said it will act to stimulate the world’s second-largest economy via tax cuts, more credit availability to smaller companies and infrastructure spending. This news follows some very weak import and export data reported by China on Monday.

However, weak economic numbers coming from Germany, the work horse of the European Union, did dampen enthusiasm among traders and investors in Europe. Germany’s gross domestic product in 2018 was today reported up 1.5% versus up 2.2% in 2017. The 2018 GDP reading was the lowest in five years. China is Germany’s biggest trading partner.

Brexit is back on the front burner of the marketplace this week. Voters in the U.K. later today are likely to reject Prime Minister Theresa May’s latest Brexit plan, which could put the entire Brexit situation into serious turmoil. Such would likely prompt Europeans to seek out safe-haven assets such as gold.

The U.S. government partial shutdown is the longest on record. The matter is not a serious drag on the marketplace, but many markets are lacking normal economic reports to drive their daily price action, which is causing uncertainty and some anxiety amid the dearth of news, which is generally bearish for those impacted markets.

The important outside markets today see the U.S. dollar index higher. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are higher and trading just above $51.00 a barrel.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the producer price index, the Empire State manufacturing survey, and the IDB/TIPP economic optimism index. There are also several Federal Reserve officials slated to give speeches today.

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are higher and poked to a four-week high in early U.S. trading today. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,600.24 and then at 2,625.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,567.25 and then at 2,550.00. Sell stops are likely located just below those levels.

March Nasdaq index December futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the January high of 6,645.00 and then at 6,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,521.50 and then at 6,500.00. Sell stops are likely located just below those levels.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher in early U.S. trading today. Bulls are in overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 146 11/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 8/32 and then at last week’s low of 144 30/32. Sell stops likely reside just below those levels.

March U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the firm chart advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 122.09.0 and then at 122.15.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.26.0 and then at 121.16.0. Sell stops likely reside just below those levels.

U.S. DOLLAR INDEX

The March U.S. dollar index is higher in early U.S. trading, on a corrective rebound. Prices have been trending lower on the daily chart for the past month. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.530 and then at 95.750. Shorter-term support is seen at the overnight low of 95.070 and then at last week’s low of 94.635.

NYMEX CRUDE OIL

February Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Monday’s high of $52.11 and then at $53.00. Look for sell stops just below technical support at $50.00 and then at $49.00.

GRAINS

Grain futures were higher overnight, partly on the new stimulus coming from China’s central bank. President Trump speaks to a farm group today, which will be closely watched because he may mention which U.S. goods China could be buying. The U.S. government closure has created a dearth of fresh fundamental news for the grain markets. The uncertainty over no fresh government data remains bearish.