In this market briefing, the host provides a rapid overview of the week’s key macro and micro developments. He begins with a brief promotion of AmplifyMe resources before diving into overnight economic data, noting China’s stronger‑than‑expected industrial output and retail sales alongside a significant Delta‑variant COVID surge that could strain supply chains. He then discusses Japan’s persistently low inflation and the BOJ’s continued easing stance, contrasted with the US Federal Reserve outlook where Morgan Stanley’s economists predict no rate hikes until 2023, diverging from more hawkish views. US political headlines include President Biden’s declining approval and the imminent signing of a $1 trillion bipartisan infrastructure bill. A global COVID snapshot highlights Austria’s lockdown, Germany’s work‑from‑home push, modest UK uptick, US travel easing, and Japan’s first day without cases in a year. Stock‑specific news covers Elon Musk’s ongoing Tesla share sales, a massive Airbus order for 255 narrow‑body jets valued over $30 bn, and a preview of upcoming earnings from major US retailers and tech firms. The geopolitical segment flags the upcoming Xi‑Biden meeting, China’s firm stance on Taiwan, and trade frictions involving EU‑US steel/aluminium tariffs. Finally, the host outlines the UK’s data‑heavy week—jobs, CPI, and retail sales—explaining how these releases could shape Bank of England policy, and previews US retail sales and industrial production data. The briefing ends with a reminder to follow his social channels for a recap.
Chapters
Okay, very good morning to you. It is Monday the 15th of November. I hope you're doing well and had a fantastic weekend. Before I begin the normal briefing, don't forget to check out AmplifyMe.com. 3 things that you can do here. If you're a student and you want to take part in one of our practical Finance Accelerator simulations, you can just book in for the next one that's happening, a public free event on Wednesday. You You can also go on here and sign up for free to access our content hub of market analysis, career sessions, and so on. Or if you wanted to just stay on top of markets and scale up your, your macro fundamental knowledge, there's a newsletter here that gets written by me at the end of every European day. All you need to do is just pop your email in there and you're up and running. But otherwise, what I'm going to do and talk about in the briefing this morning are a couple of things. Summarize the weekend major news flow. Has some Chinese data overnight, some commentary worth noting out of the BOJ, Morgan Stanley's latest Fed rate call. We've also got an update on global COVID, a bit of a disparity we're seeing across the globe at the moment, particularly the worst spots being in mainland Europe. So we'll have a look at some charts to do with that. We'll talk about some stocks news. Of course, can't go a briefing without talking about Elon Musk and Tesla. and then we'll look at the week ahead with a lot of focus on the UK market, given there's a number of key jobs data, CPI, and retail sales data coming out which will shape people's expectations about the timings of rate hikes for the UK. So going to stick with the news in this briefing and going to start first of all with what's happened overnight. We did have some economic data. The Chinese industrial output and retail sales accelerate. Property clouds obviously still remain with the Evergrande saga still going on, but industrial production for October year-on-year came in at 3.5% above the expected 3%, and retail sales 4.9% above the expected 3.5%. It is worth noting though that China at the moment is battling, uh, pretty much its biggest COVID-19 outbreak that it's had so far given the Delta variant, particularly in the northeastern Dalian city at the moment. And in fact, it marks China's most widespread outbreak, uh, since this new variant having now affected 21 provinces across China. The actual case numbers are particularly low comparative to, say, here in the UK or mainland Europe by comparison, but it comes in the context of China's zero tolerance policy and definitely more onerous lockdowns on regions, municipalities obviously could well have an impact on this current inflationary global environment we're having at the moment if there are further problems with supply chains and so on. So definitely worth keeping an eye on. Shifting over to Japan, we've had some comments out of this guy, the governor Kuroda. He spoke overnight and doesn't come as much a surprise, but it's definitely a lot different in Japan in inflationary terms than what we're seeing in the US last week at 6.2%. Inflation at the moment is projected to get near 1% by middle of next year. I was having a look this morning in the article about, you know, why is inflation so low? And it talks about the tentative nature of companies in history in Japan to raise wages and also the consumer sensitivity to just generally inflationary concerns as reasons why this figure just remains grounded, so to speak. But with inflation still well short of the 2% target, the BOJ will maintain its powerful monetary easing and stand ready to ramp up stimulus, even as other central banks, of course, are ending their crisis mode policies at the moment. So quick look elsewhere, as one of the other comments here is Morgan Stanley. They've come out over the weekend and the headline talks about differ from Goldman. So essentially, the economists team and what the CEO of the bank are saying is slightly diverging, uh, Gorman being a little bit more hawkish than the economists are. Not the first time that that's happened, mind. But Morgan Stanley's economists are sticking with their prediction that the Fed won't raise interest rates until 2023, and obviously that would put them in a much more dovish outlook than where the general consensus lies for broader markets at this point in time. Otherwise, just having a look elsewhere on the politics side, continuation of the trend that we've had, which is— oh, we've got a— you coming in? I go play with my bed. Well, while you're here, why don't you say hello? Okay, it's too early for you to be up. Come on, off you go. Mommy, mommy will get you some. Mommy's going to help you with some. Okay. Little guest appearance there. She's, she's fine. But the other thing here is US politics and president's overall rating continues to decline. We've seen this for some time. It's now down at 41%. And to give you some, again, context, that's down from 50% in June, 44% in September, according to a Washington Post ABC News poll that came out over the weekend. In fact, about half of Americans overall, as well as political independents, blame Biden for the current acceleration in inflation that we're seeing at the moment. So he continues to take a bit of a battering politically at the moment. And from an infrastructure point of view, that bipartisan bill of $1 trillion is set to be scheduled to be signed by the president later on today. All right, looking at COVID, um, this is the chart of COVID amongst a selection of countries, which probably helps give you a bit of greater context. The one here that is pretty phenomenal— this is looking at daily new confirmed cases per million people on a 7-day rolling average. You can see here Austria is absolutely off the scale at the moment compared to other areas. Uh, and so the country itself has announced a lockdown for unvaccinated people for at least 10 days as coronavirus cases spiked to record levels from Monday into at least, uh, November 24th. It comes after Austria's 7-day average, as you can see here, is more than doubled this month to more than 10,000, and its recent rate of infection is among now the highest in the world, as you can imagine. Due to the recent surge in COVID cases, the other one we're also seeing here is this line here, which is Germany. Germany, they plan to require companies to allow office workers to start working from home where possible. And obviously, neighboring nation of Austria, which has seen this dramatic and worst case of outbreak so far. On the flip side though, looking slightly different, other things are in the UK We've had a slight uptick after a consecutive period of substantial declines. So worth keeping an eye there. And the United States, they feel now confident enough to ease travel restrictions. It came to light over the weekend. And Japan, all the way down here, recorded no daily COVID cases for the first time in over a year. So at the moment, you've got more positive developments happening, certainly in Japan. Loosening of travel restrictions in the US, but particularly as we go into the, uh, November Thanksgiving and we've got Christmas coming up with New Year's, it's definitely going to be interesting to keep an eye on those numbers if they do indeed ease travel restrictions on how that plays out. But at the moment, as far as mainland Europe is concerned, you can see much more moderate but upticks in France, more aggressive in Germany, most aggressive obviously that we're seeing at the moment is being seen in Austria. All right, a couple of single stock stories. Um, just an update really on Elon Musk selling his shares. The number continues to kind of mount. The latest figure here is he offloaded around just under $7 billion worth of shares in the company last week. He now needs to offload about 10 million more shares in order to fulfill his Twitter poll pledge that he was going to look at disposing of around 10% of the stock. He's never far away from the news. He was tweeting all sorts over the weekend. He was taking potshots at Bernie Sanders over the amount of tax that he's paying. He was tweeting about crypto and meme numbers, and he certainly knows how to, how to juice the moment. And I'm sure we'll be hearing much more from Musk and obviously looking out for any more potential sales that might happen this week and the impact that that's had. Subsequently on the Tesla stock. The other company I thought would be interesting to watch at the European Open this morning is Airbus. And the reason why— they've secured incredibly large orders of 255 narrowbody jets at the Dubai Air Show, and the deal for Airbus's larger A321 models is valued at more than $30 billion US before typical industry discounts are issued. So —be interested to see how they perform today in Airbus shares. And from an earnings point of view, it's pretty quiet for certainly anything that could influence the overall index, but there are a couple of large brick-and-mortar US names reporting this week. Namely, you've got Walmart and Home Depot pre-market on Tuesday, you've got Target and Lowe's on pre-market Wednesday, NVIDIA, Cisco aftermarket on the same day, and you've got Alibaba Macy's, Kohl's, so on, reporting on Thursday as well, just as a reference. All right, let's talk about the week ahead. And for the— to start with, rather than talk about economic data, you know, on the geopolitical front, investors are going to be watching very closely the meeting between obviously Xi Jinping and Joe Biden. That's going to be happening later on today. I think London time it's around kind of towards 8 PM London time. Looking out for signs of any warming of relations on trade and other issues. And a couple of things to be aware of is that an editorial in the English language China Daily, which is kind of the mouthpiece of the Chinese government, has said it's likely that Xi would impress upon Biden that Beijing is resolved to realize national reunification in the foreseeable, foreseeable future, no matter the cost. And of course, they're talking about Taiwan, the One China policy, and this is a real source of friction between the two at the moment. So it looks like China not backing down on that. And certainly, um, the, the general tone of their discussions will be, will be closely scrutinized when we come in tomorrow morning. Um, otherwise, the other thing here is on an international trade front, Talking of China, Beijing has accused the EU of risking damage to world supply chains by throwing up regulatory and trade hurdles to foreign businesses. The Chinese ambassador has also attacked a recent EU-US deal on steel and aluminium tariffs. You'll remember we were talking about that maybe 2 weeks ago, and that deal is to seek to restrict imports from more carbon-intensive producers like China. So obviously from a Western point of view, one thing the pandemic has brought to light is the dependency on the supply chain, and namely that of China. And so as they start to move away from that, and as China is kind of assuming more centralized power, um, China of course don't want this to happen, at least not so rapidly, because of their still dependency on the exportation of their goods. So Again, another area to keep an eye on with trade as they speak later on. All right, quick look at the calendar for today. Um, a couple of— just going to talk over some of the main points that I'm looking at, and starting off with the UK. And the reason for that is that UK, you can see here on Wednesday first thing in the morning, you get the latest jobs data. Then, uh, sorry, Tuesday, Wednesday, you get UK CPI first thing in the morning, and then UK retail sales comes out on Friday. So it's a blockbuster week for the UK economy as far as an information point of view. And this comes after the big disappointment that we had from the Bank of England, who did not deliver on that widely anticipated rate hike back on the 4th of November. Um, the— with this data that we're looking at, the one in particular that's going to draw a lot of attention is the one tomorrow morning. And the reason for that is that the October jobs data will show if unemployment rose after the September 30th expiry of the pandemic wage subsidy scheme that over 1 million people were estimated to be on. So remember, one of the key factors that I was talking about at the time which supported my view that they weren't going to hike is that they wouldn't have had visibility on the real true underlying impacts of the end of furlough to then judge whether the labor market was in good enough position, even though inflation obviously is ticking that box at the moment. The jobs market, not so much. So better for them to wait and see and get that information. We're going to get that tomorrow. The other things then are inflation and retail sales, Wednesday and Thursday— Wednesday and Friday, excuse me, respectively. A big inflation print alongside another retail sales decline could well force the Bank of England to choose whether to act against inflation or do they act to kind of nurture the more fragile recovery that we're seeing at the moment. From a UK CPI point of view, On an annual pace, it is expected to tick up to 3.9% in October, a pickup from 3.1% that was seen in September. A couple of comments I saw out of the chief economist at Nomura said that of the report from the ONS on Wednesday on inflation, he expects it to climb to a further 4.5% in November and to reach a peak of 5% in the spring of next year. Do keep in mind though, that is, as punchy as those numbers sound, in line with what the bank has already telegraphed. That essentially we're going to hit around 5% in the spring before then fading, with this kind of transitory view still in hold. Um, after the spring, the Bank of England expects inflation to fall as the impacts of higher oil and gas prices start to fade, the demand for goods cools, and some of the raw material shortages that are causing the current pressures start to fade as well, as the rationale there. However, Bank of England's Andrew Bailey did say that it was crucial element to judge to what extent inflation would be temporary, and thus the scale and pace of the bank's response, was the evolution of the labor market following the end of the furlough scheme in September. So we already kind of know the direction of travel with inflation. It's going to go up this week, it's going to go up a little more as well in the months ahead before it then cools off. As far as what the perception is of the bank, it's the uncertainty is the jobs data. So out of the leaning of the 3, I'd say in order of priority, probably looking at the jobs market, then the inflation reading, and then lower down the retail sales figure. The other number to talk about briefly here then is US retail sales comes out on Tuesday, as you can see here, on track to increase 1.4%, 1.5% from the previous month, up from the previous 0.7%. Many Americans are kind of getting to the business of their Christmas shopping done early in hopes of avoiding any out-of-stock situations as we draw closer to the holiday. And coupled that with a fairly robust Halloween items being sold over the period, and that early holiday rush has probably given this, this figure a bit of an autumn boost is what analysts are suggesting. Otherwise, on the same day, you do get industrial production coming out the States. Should see good manufacturing growth based on the ISM report already released. You've got your weekly jobless claims on Thursday alongside Philly Fed as well coming out then as well. So that is it, gonna leave it there. Obviously quite a few things there I've gone through. Feel free to check out my Twitter account for a bit of a recap of what I've just covered. Otherwise, have yourself a good day. Remember to check out abfine.me.com, and I'll see you same time tomorrow. Take care.
