S&P 500 Hits New ATH Despite Rise In Coronavirus Deaths

Okay, very good morning, Tuesday, 11th of February. Hope everyone is doing well. Just to go over then a few things, an update on the virus. It's quite interesting, of course, to see that despite, again, the media still kind of pushing the narrative, stock markets don't care. S&P record high last night, Dow up 174 points. This coming, of course, after a little bit of nervousness you can almost sense in the, in the market initially at the beginning of the reopening of trade on Sunday night. Deaths have indeed crossed now 1,000. Obviously, the severity now, as we mentioned yesterday, having superseded SARS virus. But once again, it's kind of the context is key. And what is it that markets are looking at? And as I mentioned, despite these increasing numbers and still a lot of media attention, attention on this subject. Of the 11 major sectors in the S&P 500 yesterday, all but energy ended in the black. Technology, consumer discretionary shares, usually those most sensitive to downside in a risk-off type atmosphere, were the best performing. So all of those big major tech firms, as you would imagine, led the way higher, posting their large— the largest percentage gains on the breakdown. That consequently leading over into the Asia-Pacific session. So Hong Kong, South Korea up around 1%. Chinese shares now posting their 6th day of advances, obviously getting a little bit of a boost as well generally from the return in a somewhat soft fashion to some workers in the mainland. And then Japan overnight was closed, just as a reference point. So Germany has kind of fed through the Asian session. So US index futures still reside up at higher levels. But largely, I think for European equities, it's kind of a pickup. And let's just review of where we are at the moment. Now let's just switch over to the DAX, kind of carrying on or passing the baton almost from the Wall Street close to Asia to Europe. The DAX, as I speak, is at session highs. Got about 130-point gain this morning. A couple of individual movers there. Deutsche Telekom, I was catching some news this morning, updates in regards to Sprint and T-Mobile deal, but they're up about 4% out of the, out of the gate. And then if you look at Daimler, this is the sort of counterintuitive news that you get with stocks, is that Daimler slashed its dividend following a profit warning. The share's up 3.5%. Now, the idea here being that, you know, sometimes, you know, if you've got like, uh, let's say a slight infection, better to cut your arm off and just start from fresh. And the aggressiveness of the way of which they've been looking to just kind of batten down the hatches, so to speak, seemingly being met, greeted positively by investors. We're talking a lot about large-scale job cuts They've cut their dividend to €0.90 a share after their 2019 earnings more than halved. I think their previous dividend was up in the €3 range. Restructuring, legal charges, the third profit warning now for what is still actually a relatively new CEO. So the market's looking at this as, you know, aggressive restructuring as a positive for the company to secure its more long-term prospects in that sense. But yeah, so overall, looking at the market this morning, relatively upbeat. So gold down about $10, T-notes down 13.5, and that's a pretty, pretty punchy move for this time in the morning. So basically it's just grinded lower all the way into the close on Wall Street, kind of drifted south, and then a bit more weight come in as European participants have come into the market. And you can see the US 10-year just finding some natural resistance at this S1, which also just coincides then with the double bottom test that we had towards the end of yesterday's session. So yeah, just having a look elsewhere, oil price is pretty steady. Currency markets, uh, reflecting relatively flat conditions in the majors in terms of euro and cable, both sitting below their pivot at the moment. Obviously some UK data coming out in a short while. On the GDP front. Uh, the Aussie, let's just have a look, just given the general moderate risk appetite observed overnight in the Asia-Pacific region. So the Aussie up a touch, just finding a bit of support in the futures on the break above its R1 in the overnight session, seen up about 28 pips, uh, just reflecting that general positive Asia equity performance as well. Um, let's get straight into some headlines then. A few things that we're looking out for today. One is Fed Chair Powell, likely to give Congress a largely positive economic update. So you'll remember this is part of the kind of two-day event in Congress. So he speaks to the House Financial Services Committee today and then the Senate Banking Committee tomorrow. And this is the big one because largely what he says to the House, he'll repeat to the Senate. So So once the market has already digested what's been said today, there's no impact on Wednesday's one. So today, in terms of what we're expecting, largely looking for a repeat that economic fundamentals in the US are sound and that a, quote, material change is the words that they've been using recently is required in order to shift that view. Likelihood as well, he's going to be questioned a lot by the various members of Congress on the coronavirus, of course. But as per what he said in the recent press conference in the Fed decision, it's kind of too early really to tell of the— or quantify the impact of that. And so generally just observing those trends and the impact it could have on the global economy later on down the line to make that judgment. So largely brushed off on that point. Yesterday we did have the Federal Reserve Bank of San Francisco President Daley Speak said on Monday US economy and policy were in a good place. A non-voter is Daley, kind of center dovish in that respect. But I think that generally is the kind of thing that will be reiterated today. Policy's in the right place generally. I would say a relatively upbeat tone you can expect from Jerome Powell irrespective of this kind of ongoing concern about the implications of the, the spreading of the virus. Because underlying this as well, of course, remember last week, generally a decent set of economic numbers across a variety of different measurements, and that's going to come as some welcome relief for the, for the US economy at the moment. Timings-wise, what time is this happening? Well, 1:30, the testimony is released. The House Financial Services committee then begins at 3. So usually the way this works is the accredited financial newswires like Bloomberg, Reuters, or Refinitiv as they're known these days, they will have the text and they will snap all the comments. So you'll get a whole flutter of headlines and then subsequently a little bit of volatility across asset classes at 1:30, and then the actual event begins at 3. But remember, 3, when he reads out the statement statement is just a reiteration of this, the text we've already seen. And then he gets questioned by politicians literally for hours and hours. I mean, it goes on a long time. Largely it's used as a bit of a staging post for politicians to just kind of criticize the Fed in regards to their managing of the economy. And it's, it's not really, apart from that first part, much market moving in terms of the Q&A. The questions you know, being as kind as I can be, um, they're not particularly sophisticated questions that the politicians put at him from a potential then knock-on effect to how short-term markets might react. So yeah, that, that's the, uh, the deal with Powell. And then looking at the calendar for today, quite a lot of UK economic data coming out now at 9:30. You've got a whole cluster of information. What I'm looking at here is a chart of the recent readings for Gross Domestic Product, GDP, in the UK on a month-to-month reading. And they're looking at the 3-month, from 3-month reading with the blue line, and the blue line being forecast and the red here bar being what is the street estimate for the reading for today. So for the headline preliminary Q4 UK GDP, it is expected to come in at 0.2%, which would be a bit of a bounce back from the negative 0. 0.3 that we had previous to that. Now, one thing of course is the UK economy then getting a bit of a modest pickup following the emphatic win of Boris Johnson's Conservative Party at the election at the end of last year. And that's largely to be reflective in, in this figure today. This figure alone though, you know, is this the saving grace now for Boris and the Tories? I'd say not. Because if you think about it, this is growth data dating back to the end of last year. The markets are very much more forward-looking, and we're now in almost the middle of February, so it's quite dated. And despite the initial kind of relief, little bump that we've had in data, I do expect that to materially weaken over the coming months as generally the focus— and for, from a pound movement point of view— moves back politics and Brexit, as what we're seeing at the moment. We're kind of on a bit of a standoff on the negotiation front, and I'd expect that to be the case to continue for a number of months. And that will put the pressure back on the no-deal, and subsequently more emphasis on the, on the, the political side of things. And subsequently, the economic data should then reweaken once again. So I wouldn't get too head up in this GDP number. If it is an upside print, again, the expectations are for growth of 0.2%. So to avert this kind of technical recession type situation of two negative prints back to back. Alongside that, you do get the manufacturing industrial output numbers and also the trade balance figures coming out the UK. It's all coming out at 9:30, but I'll be here to cover that with you guys at the time of release. Looking at the calendar, what else have we got? So as you can see, the UK numbers really dominate, uh, the releases here, and that's pretty much it for the morning. Going into the US afternoon, equally it's quite quiet, uh, and in fact, other than the API weekly crude inventories, really it's speakers. Now let me just blow this up so you can see this a bit more clear. So London Times here on the left-hand side So you've got all in the afternoon, so nothing in the morning. You've got Bank of England's Cunliffe. So let's focus with the Bank of England first. Cunliffe, um, well, actually, look, you've got the calendar here is put Carney, but I think that's changed now. So obviously Andrew Bailey stepping in. But then you've got Bank of England's Haskell. So a couple of Bank of England speakers to be on the lookout for. And as they've got here, uh, Haskell was a dissenter and a leaning dove. Uh, Cunliffe tends to sit more in the center in that respect. You've then got Christine Lagarde speaking on a presentation of the ECB's annual report in European Parliament at 2 o'clock. You've then got the main headline event, which is Jerome Powell for this afternoon giving the semi-annual testimony to the House. And then you've got a couple of others ECB economist Lane, ECB's Schnabel. Now, not sure if you're aware, but just as an update, I don't think what Isabel Schnabel is going to say is going to be particularly important, but there has been a slight change as of the beginning of 2020. So just so you're all on point, Fabio Panetta, a long-time serving Italian economist, is now on the executive board. So you remember the structure on the ECB, you have the executive board that sits sit there at the top, and then the heads of the various different national central banks. The other addition then onto the executive board has been Isabel Schnabel, who is speaking later on this afternoon. Now, she is basically a lifelong academic, uh, from, as you can see here, various different German educational institutions. The executive board, when they speak, generally keep their cards fairly close to their chest. They tend to be relatively aligned with Christine Lagarde. So it's not like hearing from Jens Weidmann, this chap down here, for example. But just to cover off our bases. So yeah, that, that is pretty much it. Kashkari is speaking. He's kind of a big dove. That's going to be later on in the— if you're sticking around, you've got a 3-year note auction coming out the US Treasury for $38 billion. In terms of earnings, out of the US, nothing kind of from an index trader's point of view really to look out for too much. So really the afternoon dominated by the Powell speech, but again, as I said, not expecting real groundbreaking comments out of him, to be honest with you. All right, I'm going to leave it at that, hand you over to Sam, and wish you guys a good day ahead. And I'll see you in the chat on Trading Live. Thanks very much.

Hi guys, good morning. Hope, uh, we're all good, had good weekends. And Monday, uh, obviously quite, quite a quiet one yesterday. So if you're just joining us, not too, uh, surprised. Historically, I would say I very, very rarely trade a Monday after, uh, Non-Farm Payrolls, but I did yesterday evening, finally getting into a trade. But just having a look here before we go over to that trade. The S&P, just looking at the DAX, likely here to, to push on and, and make, uh, its new all-time high. Let's have a quick look at that on the daily just to confirm. There you've got the, the high that we had back on the 22nd of January, and we're not far away from hitting that. Good start from the open, found some support on the Asian session low around, uh, 315, and we're just trying to get above there now. So keep a watch on that, probably have a bit of profit taken. But of course, then the opportunity comes while the volume's there that if the market does push on, it could drag the others over in the States with it as well. So the DAX is pushing on. We'll have a little review of that later on just to see how we reacted to that high. Uh, yesterday the S&P obviously pushed higher from cash open and then did give the opportunity to get back in, albeit later on in the day once we broken above this trend line which had been from the, the all-time high. We came back, it did take a while, and then 5:30 you can see price came in and then has pushed on since then and supported similarly just near those lows that we had from earlier on in the session. One, while the DAX is pushing, you might get a further follow-through here for US stocks, but really nice opportunity here on the break of that trend. Price came back And, uh, yeah, around 5:30 came in. I know a lot of the guys in-house were looking to take this on, uh, just around 4 o'clock before we wrapped it for the day. So, uh, yeah, I'm unfortunate not to get in that for them, but, uh, you know, well spotted and still a good trade idea. The pound today, of course, we got the, uh, the GDP 9:30 and then the speakers as well, so probably a busy day um, for, for cable in terms of price movement. And we're just drifting lower. Um, the last two Bank of England meetings have had incredible volume. Uh, 11:59, we know data releases are usually, or it seems at least, leaked to some part. So it'd be interesting to see what happens over the next hour or so, and most importantly, maybe the first 15 minutes after 9 o'clock. To give us a cue for perhaps where this, uh, what this data release could do and how it could come out. If we have a look on the daily chart, and it's obviously not really going to want to position yourself into a, uh, a trade now, but we have still closed below these areas of support depending where you have them yesterday. So we had quite a nice push really from around about now until the afternoon, but we still finished low, lower than these support levels. So from a technical perspective, I still think there could well be a bit of downside. Could this data really change the overall outcome for this market for the week? Probably not. Speakers perhaps could, um, so I'd still favor a move to 128 on that. The euro, uh, is of course here now on this daily chart. You can see another Decent push lower yesterday. We're trading on levels not seen since last year, September time. And then the talk starts coming in again about filling that gap from— or Macron's gap, should we call it— another bad day. And that could come relatively quickly, of course, around about here, the low that we had on that Monday after the first round French elections, 1.084 47.5 in the futures could be a decent target to have, but it is big support here, uh, so, you know, trade it at your, your peril, perhaps waiting for a bit of confirmation. It is a key level, and of course, you know, the last two times we've been at this point, we've reversed quite nicely. And of course, we haven't come back here since the 1st of October last year. Looking at a market that perhaps might have a better chance of recovering from similar levels. And this could be, of course, what you're looking for in the euro if you like the longs, is the, the sort of false break of some previous areas of support here in the Aussie dollar. We did test it, of course, last week, the RBA keeping rates on hold at 0.75, and, and that pushed us higher. Uh, Lowe then decided to come out and not say anything too positive, and we drifted back down along with some dollar strength. But we did, uh, false break these lows yesterday and confirmed a push back above, and we've had a decent start to proceedings today. I'll just be aware— I'm just gonna put this on the 60-minute now— you're just coming into an area where, you know, the bulls would have really liked to have taken over and they haven't quite yet. We are now trading back on the high of yesterday afternoon, so this is another key point as well for that Aussie. But if you're a euro bull and you're looking for a similar kind of trade. You know, this is probably what you would want to see, maybe that false break, price come back in and then to that level, and, and then you can push on to the upside. However, Twitter would tell you that this market's going lower and lower, but of course Twitter has been wrong many times, just like with, uh, the, the greatest bull run in history. Another market near those lows, let's have a look at, uh, oil. So a lot of these, uh, these markets, if you like a range trade, you like good risk reward, I mean, these are opportunities that surely you've got to be looking at. Um, for oil, what's going to make you want to pull that trigger to get long? Probably something fundamental to change, you know, maybe the confirmation of a, of the OPEC cup or something deeper in the rumors. I think if we can get above— I mean, I know you'd be late to the party, obviously— $52 and, and change here. This is a key level. You'd be more confident. You can see we've rejected that the last time we came up on the 6th. But it's a key zone, as we know. And, um, you know, if we can maybe close the day back above $50.36, which is obviously a key level of support going back to this time last year, uh, and a bit, you know, from the summer, you could be perhaps a bit more confident on that. Just below where we're trading, of course, these are the levels that I would be aware of: $47.87 and $48. That would still be a target for anyone that is short on breaks of these levels or any retracements back to 52 where they got in. But, you know, time will tell for oil. I think we could well be looking back and seeing price higher up. It's just how low does it have to go before that happens. Gold, let's have a quick look. As Ant said, just drifted down this morning following some nice risk-on in Asian trade and following last night as well. Uh, let's have a quick look to see if a trend line is, is worth having on here. There you go, look at that. Lovely, lovely. This is the, the one we had on yesterday. We were saying, well, this, if this breaks, you could have a decent opportunity. Unfortunately, that would have been at 2 AM or 7 AM on the retracement of that target. And then the low of the day, let's have a quick look. And I mean, you can't really get much better than that. It's just artwork. I might frame it on my, on my wall for that. Lovely trade. And also you could argue a bit of those previous lows as well. So for gold, there's your line in the sand, albeit diagonally to the upside, that I would want to keep an eye on. The lows as we traded just recently, also from the 7th, uh, just probably now worth moving this line down and call it a bit of a zone around 1569. Uh, that's obviously— you want that to go for an extra leg lower. Probably worth keeping an eye on what stocks do. If stocks continue to push higher, then we could of course come lower. We were in a situation yesterday where, you know, it's important to realize there's good times to trade and bad times to trade. Monday after non-farm payrolls, usually not that great. And yesterday you saw that correlation-wise, you had a strong dollar but gold was going higher and stocks were going higher. Doesn't really make too much sense. And, you know, this morning, okay, we got a nice little data card but historically as well, that Monday, Tuesday non-farm payrolls are always relatively quite quiet. But for gold, it's stuck in this little range now. A good trade earlier if you took it on, you know, why do you really want to get too much involved again unless it breaks that low perhaps? Quick look over that DAX just to wrap it and see if we get the high. Not quite, but keep a watch on that on the futures. 13,638.7, get give or take. Um, and of course, if we were to just to drift lower now, we've got those previous highs of the day around 13,600. So keep a watch on that as well. UK data in 1 hour to the minute. I hope you all have a good trading session and a good day, and I'll catch you all in the chat.