Fed Maintain Dovish Stance & $AAPL $FB Rise On Earnings

Okay, very good morning, Thursday the 29th of April. Hope you're doing well and just going to get up to speed on what's been going on and lots of news to update you on because we had a batch of tech heavyweights report their earnings after market last night, i.e., Apple, Facebook in particular. And as you can see in the center charts here in the NASDAQ and the S&P on the right we've had a continuation of a push higher seen in US index futures in that overnight session. Fresh all-time highs again for likes of the S&P. We've taken out 4200 now to the upside. This also coming in combination as well with a slightly kind of dovish short-term reaction to what the Fed said yesterday, which really was not a lot new but a function, I guess, of some of the markets belief that perhaps they could have kind of spilled over optimism and any concerns about inflation to something a little bit more hawkish, but didn't, didn't materialize. They kind of just rolled out their dovish stance as they have done in recent recurring speeches. And thus that's also provided a bit of catalyst for the market movement. So the dollar still a bit weaker. That did propel both major currency pairs yesterday, as you can see in the top left, euro-dollar and cable. Just having a look at a couple of these charts then. Cable's now got a little bit of a platform, bit messy late Asia session just before Europe came in, but around that 139.50 in the futures is going to be quite a key level. It was a level that we ran up to yesterday evening, found a bit of resistance, but then the, the kind of Asia-Pac session just following that through to some degree on that dual combination of the the dovish kind of maintaining of that stance in the Fed in combination with those good tech earnings. Samsung Electronics in South Korea, big cap firm there. They also exceeded expectations. Hong Kong actually led shares higher in Asia with Japan shut for a market holiday. Otherwise, a few other things from overnight. You did have, of course, Joe Biden gave his, his first speech to Congress. He outlined his $1.8 trillion social support plan package of tax credits, domestic priorities, partly funded, of course, as we know now, by these largest tax increases on the wealthy in America in decades. But market already reacting to that because a lot of the information that was more market sensitive we'd already known, of course, with that move last week with the capital gains tax. Worth noting overnight, though, did also have comments from a US Democratic Senator Manchin That person is one of the names that we've kind of highlighted before, and the reason for that is because, um, Manchin had said that the trillion-dollar proposal from Biden makes him feel uncomfortable. And of course, he's one of the key people to watch because of the wafer-thin margin that the Democrats have, having to rely on Kamala Harris as the VP to split the 50-50 vote in the Senate. Biden, for his current proposal, would need all of them on board, which is one of the key reasons of why the market's probably on the balance of the expectation that the kind of capital gains tax numbers that we heard a week or so ago are probably unlikely to materialize to the magnitude— excuse me— of the numbers which have initially been tabled. So that's the general vibe of things. There's obviously things coming out today that will also be significant. You've got the Q1 advanced GDP we'll look at in a moment, and you've also got a batch of, of more earnings. In particular, aftermarket, you've got the likes of Amazon. Pre-market today, McDonald's as well. So a couple of big names as well reporting. But a quick look across some of these charts, and just looking at the S&P here first, um, we've had that, that double top through this week which, um, we initially came up and tested and has now provided a bit of an on-the-break pullback for that kind of classic long on the push back up to the Asia-Pac high, which now marks the all-time high at 4203.25. A bit of short-term consolidation at that point, but any further pullback on any short-term profit taking would be looking at that 4192.50. So that area of previous resistance now will be an area of probably stronger support. If you start looking on the daily bars for the S&P, we were struggling a little bit. You can see that high that we printed back on the 16th of this month. That really had marked the high because we had failed to close on the dailies above 4183.5. It'd be really interesting to see where we close on the daily candle today. Can we finish above that point? If so, then I think we've probably got a decent floor for price here, barring anything unexpected for the next phase now of either push-up or consolidation up and around this 4200 area. So again, on the, on the, on the way back down, because I know that the kind of bears get very nervous when we start to see this kind of continuation, kind of low volatility environment, as, as seen in like the VIX, and we get this one kind of dimensional move. I mean, that's what I'd say a lot of this was, and then we had that pullback and This is where the bears were kind of claiming victory short term, that the market was going to roll over. And obviously it hasn't done, helped by the Fed now and some of these bigger earnings coming out, just bumped us over the line again, back up to the— on the upside. But if we ever did get to the point where we do see some more aggressive kind of pullback, then there's plenty of good areas of technical support, I would say, lower down, just tracking these bigger moves to the upside that we have seen. Probably the most significant of all being around that 4,000 as the last kind of line of defense. Um, from a percentage-wise, what does that look like? Actually, if we go from where we're trading at the moment to there, we can talk about a 5% move, which would be, you know, pretty big. Um, but just goes to show that even if we came off 5%, personally, I still wouldn't feel bearish. Um, I don't think we are going to come off 5% anytime soon. So, I mean, if you look at it in a proportion of some of these other moves that we had, if we go back to the February-March period, that was about a similar size move to what we're talking. So definitely can happen. But I think a lot of these trends will materialize. So it's kind of set up as where we're at at the moment. T-notes yesterday obviously got a bit of a boost on the back of the Fed. And, and so again, let's, let's recap exactly what the Fed said, and then we'll look at some of these charts. So, so here he is, the main man Jerome Powell. He noted a strengthening economy but basically waved off any talk of a policy shift as soon as— at the moment. There were two main comments he made in the press conference that were really the market-moving, uh, kind of event, or parts of that event. One was transitory rise in inflation this year would not meet standard for raising rates. And the second one is it's not time to start talking about taper. And again, we're not really expecting that for a number of weeks down the line until we get to the June meeting, which is about 7 weeks away. That's where we're kind of penciling in that more kind of heated discussion about tapering. Good point here. Tim and I were covering this live on the live feed in the community on Amplify Live last night. And I know Tim has a kind of different take and view on what he thinks about inflation. But, you know, credit to him, he had some really excellent trades yesterday. And I think the ability to be able to kind of disassociate yourself from, you know, your kind of view that you might have on a macro level and just trade on the basis of the information that you're seeing. And so, as I say, credit to him for being able to execute those trades, which basically were against his view of what he thinks. But he's just reacting to the fact that, you know, the information is here, that the Fed are being pretty clear here that they're not going to withdraw their support anytime soon. They're not really fazed about inflation. They see it as transitory. And so I think a lot of people were thinking like Tim, and therefore the market reacted. I don't think what the Fed have said is new. I don't think it's going to be long-lasting in a lot of these moves that we've had. And I think that's already materializing in the yields. That we're seeing, which are fading a lot of that move. I think yesterday's move was purely a function of people getting ahead of themselves, thinking that the Fed might change their language. And as we've seen time and time again, whether it be Powell, whether it be Yellen, that these, these individuals always react on the side of caution and accommodation as far as policy is concerned. So we had that kind of blast higher in the 10-year. We've come up to a relative point here, as you can see from the, the previous support levels, the breakdown, and then the retest here was quite nice in terms of the late US session. And then we've just faded that move as yields have just grinded back up a little bit as we go into the European open. Gold also did get a boost because, as I said, currency pairs were lifted by the softening greenback on the back of that FOMC reaction. And so that we did manage to— well, this was the— there was twofold movement really. You do often see this in a geographic kind of sense. It's the US initial reaction here to the Fed, and then Asia come in, we break above a relative short-term range, and then we snap higher. It got to R1, and then as I said, the price is fading a little bit here. So the price fade, I don't think is that surprising. Um, I would definitely be more mindful of kind of closing out any of those short-term kind of reaction effect from the Fed, because again, as I said, I think it was down to the markets kind of slightly offbeat with getting a bit ahead of themselves about where the Fed's heads are at. It's definitely not the case the Fed have done anything different here. The Fed have just done exactly what they've said they were always going to do from the number of speeches that they've been delivering before the blackout period that we've seen. So there's definitely no surprises there. The other chart is just oil. Um, we had that positive, obviously bullish, um, infantry data yesterday, which obviously helped things definitely. And we saw a big run-up in prices, got up to those highs that we had back on the 20th, and then saw quite a steep pullback. And we're just still holding a $64 handle for the time being, up 29 cents for the moment. All right, well, let's have a quick run through some of these earnings. I've already issued my, my kind of morning notes where I go through these in all, uh, in a lot more detail, but just giving you the, the general flavor. Apple aftermarket, as you can see here, was up 2.34% in aftermarket trade. Their revenues just smashed expectations. I think as you would expect from Apple, as they always do, $89.58 billion against $77.3 billion expected. Uh, Mac sales and iPad sales, which is something the market was looking at, particularly Mac sales given this whole work-from-home environment, um, they actually grew 70%. iPad sales actually were up nearly 80%. One thing though they did warn on was that supply constraints are crimping sales. This is to do with, with chips that we're seeing on the global shortage at the moment, uh, could crimp sales of iPads and Macs Um, the CFO did say that that could knock around $3 to $4 billion of revenue in the fiscal period of the third quarter. Uh, their App Store revenue and licensing revenues were up, um, 27%. Analysts were only expecting that to be up 17%. From a numbers point of view, that's now accounting for $16.9 billion of revenue. Uh, revenue in China was up 87%. They also boosted their quarterly dividend to to $0.22 from $0.20. And they authorized a boost of $90 billion in existing buyback program. So yeah, I mean, Apple just, just getting business done, I guess, in that respect. So on the back of that Alphabet story that we had with the pickup in advertising that really helped accelerate their revenues, we saw the same from Facebook revenues 26.17 billion, expectations were for just over 23. Monthly active users 2.85 billion, touch more than expected. They see Q2 revenue growth remaining stable or modestly accelerating. Facebook actually the best of the bunch, they were up over 6% after market. And a quick recap, other names, Qualcomm were up about 5.2%, um, again very strong numbers. Ford though, the underperformer, they were down 3% or just over that in aftermarket. They were citing semiconductor shortages, um, and they see losing 10% of their planned second half production as some of the rationale for what the weakness in their shares. Later on today, um, there's a couple of key ones to look out for pre-market. Caterpillar, which is always seen as a bit of a bellwether just generally for the perception of kind of the appetite and demand on their goods and services and machinery and so on. So keep an eye out for them. Uh, then you've got Merck, McDonald's, Bristol-Myers Squibb, probably some of the bigger names to look out for. And then aftermarket, Amazon's the main one in focus. A bit of talk on Monday at the beginning of the week about potential stock split as well, so something to just bear in mind. And then you've also got Twitter, Gilead, a few other names as well that will capture a bit of attention. Um, but otherwise, taking a look at the calendar for today, what have we got in store? Got German unemployment rate and change coming out just before 9 AM. I wouldn't really see this as too much of a market mover for any European-based asset— excuse me. And then you've got the German state CPIs coming out throughout the morning, and I'd probably put those in the same category as what I've described for the German employment data. I just think there's focus elsewhere. I don't think short term unless these are really spectacular, uh, increases from their previous figures. I don't think they're going to be market movers. Neither is the sentiment readings out of the eurozone at 10:00. They never really move the market. So that really puts a lot of emphasis this afternoon on 1:30, and the reason for that is we get the first reading, first look at Q1 advanced GDP in the US. Expectations are for a further improvement as the economy in the US starts to pick up and further reopening is materializing, as what we've been seeing with improvements in the jobs market. So looking at a headline figure of 6.1% from previous 4.3%, the range is wide. Uh, we've got 2.6% at the low to 10% as the most optimistic estimate on the street. Now the range is wide because like most data, ranges are naturally wider just given the fluidity of the situation at the moment. Hence the reason why analysts are quite off the mark in regards to, say, some corporate earnings analysts and data expectations, because of the nature of the economy is evolving quite quickly at this point in time with the reopening happening. My overall perception with the GDP number is I don't, I don't think it really changes the Fed from a policy timing point of view with their tapering talk. So even if we got a number that was like 7.5%, 8.5%, I don't think that that really accelerates the taper talk. I still think that that really will materialize more in kind of June time when they have that key FOMC meeting mid-month, obviously with the new projections and so on. One thing it could do though is if we get, say, a 7.5% GDP number today, that's, let's say, a positive— economic growth is happening faster faster than generally people were expecting. But given the fact that the Fed have just said that they're not— inflation is transitory and they're not budging yet and it's not time to talk tapering, I think you've got to take that as just a natural positive then. And, and perhaps that just pushes equities further, further north. At this point, would be quite an interesting thing to— that could materialize this afternoon, I would say. So it could be that instead of good data being bad because of the nature then that that means faster tightening. I think we know the Fed stance now, they've just been explicit yesterday. So if we have good data, it might be it's good data and the market reacts in that, that fashion, if that makes sense. Um, the other thing we've got is initial jobless claims. Uh, they are expected at 549,000. So remember last week we had 547,000, which was a very low number, um, some of the best numbers we've seen since since the initial onset of the pandemic back over a year ago, and we're expecting that number to continue to remain around those levels. So that in combination will come out at the same time as GDP. Speaker-wise, a couple to be aware of. ECB's Di Guindos is probably a main one, but no text release nonetheless. We'll keep an eye out, 8:30. Then you've got voters Fed voters speaking later as well at 4 and 7 PM London time respectively. Um, supply coming out Italy for any fixed income traders, and there's a number of European and UK companies reporting today as well. So aside from the States, you do have a couple of notable names here. I'll just bring it up into shot. So from France, notably, you've got Total, one of the largest market cap companies in Europe. FTSE, Royal Dutch Shell, heavyweight in the FTSE 100. And then same for the DAX, you got BASF as well today. So all could be meaningful for their respective indices that they trade in. All right, that is it. Gonna leave it at that, let you guys get on with session, and I will see you in the chat room. Thanks very much.