US President Joe Biden To Announce Fed Chair In "Next Four Days"

Okay, very good morning to you. Hope you're doing well. It is Wednesday the 17th of November and going to cover a few different things in a briefing. Going to talk about the fact that US stocks advanced yesterday. The S&P 500, Dow were up 0.4% and 0.15% each respectively. The NASDAQ, marginal outperformance, up 0.75%. We're going to talk about the potential nomination of the next Fed chair given some comments that we've heard. We now have somewhat a timeline of when to expect that announcement, potentially at the back end of the week. We're also going to do an update on the EU COVID situation, restrictions coming back in force in the likes of Germany, Austria, Ireland, and others. So we'll have a look at what exactly is happening there and the impact that's having on the divergence with the euro against the dollar at this point in time. And then some trending stock news. You might have seen Lucid, one of the recent SPAC deals, an EV maker which is not profitable at the moment, is is now bigger than Ford Motor. Quite incredible at the moment. It seems like the, the EV makers are now the new pumped up stocks at the moment, and certainly that was evident yesterday. So we'll have a look at some graphics to put that into context. We've also got some updates on Netflix as well that's worth noting from a single stock perspective. We've had UK inflation out this morning, which I'll comment on in a moment. We've had all inventory data, and then we'll have a look at the calendar for the day ahead. But to kick things off, um, yeah, let's start with the dollar. So I've got the dollar index up to the side of me here, and this is looking at dollar index futures. And you'll remember last time we kind of had this particular chart up, the dollar index was trading at 95. We were talking around that area was quite key from a technical perspective. You can see here, going back to the bottom of that 2019 move, the volatility on the post or initial onset of the pandemic, the recovery we had in September of that year, and then the retest we had just around a month ago or so. And the breakout that we've had since that point in time, obviously coming amid the inflation figures that we've been seeing globally, particularly in the US, that's that 6+ percent reading that we had last week, has really acted as a catalyst for the technical breach for then the big push-up that we've had. And technically the dollar's come to its next kind of strategic point from a technical perspective, I'd say, at 96, which starts to incorporate then some of these previous lows that we had in the end of 2019 and also around the summer in June of 2020. So definitely worth keeping an eye on this, and we'll look at the euro in a moment. But certainly the dollar advance has put the yen against the yen now to its weakest in more than 4 years in terms of how the yen is performing against the greenback. And the euro is at its lowest level since July of, of last year in 2020, just to add some context. But looking at the overall broader charts then, so EURUSD is a little bit lower as you would imagine. There was a momentary flicker where the dollar just kind of shot up momentarily, and hence the rationale behind here. It wasn't one singular headline-related move. Uh, but you can see the S2 there acting as a support area on the daily pivots. You can see a divergence though between the fact that euro is lower, predominantly weighed on by some of that dollar strength, albeit I would say that that dollar pop overnight has been faded, and the DXY is pretty flat as it is at the moment, obviously still holding on to recent gains of late. But cable's had a bit of an extension and is outperforming. We're up 35 pips here in, in sterling-dollar. And this comes after UK CPI has come out higher than expected at 4.2% against expectations of 3.9%. Uh, the core reading also coming in higher than expectations as well. The core reading— let me just grab it here— uh, was 3.4% above the expected 3.1%. So what does this mean? Well, remember we had the jobs data yesterday from the UK And actually, the furlough impact not as, as bad as many had feared. Now, with the fact that this inflation figure is not exactly a surprise, the Bank of England have communicated inflation is going to go toward 5% in the coming months, but the acceleration is more rapid than analysts were anticipating. And so many would say this kind of locks in now a December rate hike at the next meeting from the Bank of England, given how Perhaps their communication misjudgment, but how close that conversation was in the previous meeting, they obviously didn't pull the trigger. One would imagine now that they, or at least the market will believe that they will go ahead now and execute that at the end of the year. But we are talking about Andrew Bailey and the Bank of England, so I wouldn't count your chickens just yet. Otherwise, elsewhere, equity markets pretty much sideways. Stock index futures in the US pretty much flat, just consolidating from the push-up yesterday. That's reflected in T-notes. Nothing really too interesting happening there. Perhaps crude oil just a little heavy amid some of the strength in the dollar overnight, but all in all still fairly range-bound at this point in time. Nothing really too dramatic or interesting happening there specifically in the price right now. And then gold just coming off the lower bound of where we finished on the end of the US session yesterday, so back up just hugging around the pivot level in the futures, up $4 for the time being. So let's jump into some of the news. Um, and to go with Asia-Pac first, although the US did finish positive, um, the MSCI Asia-Pac stock index, which had been rising for 4 consecutive days, has snapped that win streak. Um, in particular, Japanese exports year on year did come in quite a bit softer than expected, and, and a distinct slowdown, came in at 9.4% year-on-year for October, below expected 9.9%, and a slowdown from prior month's 13% did draw some attention. And obviously that helped exacerbate that, that move in, in dollar-yen as well in the overnight session, which trades higher this morning. Otherwise, moving into some of the news stories, let's talk about Biden and the Fed chair. So basically Bloomberg had a kind of a source piece is when they cite someone familiar with the conversations, informed with the selection of the next Fed chair. And they reported that Joe Biden will decide, quote, in the next 4 days who will lead the Federal Reserve. And obviously this is a two-horse race— Jerome Powell, the existing Fed chair, or Fed Governor Lael Brainard as the next credible opposition, if you like, to Powell's reappointment. Now, a couple things. For one, in the, in the betting market, Powell is the slight favorite. Um, you can see here actually that, you know, Bostic, Ferguson, Raskin, any of the others there, you know, might as well discount them. They're not at all in this race. It's definitely between Powell and Brainard. You can see actually betting odd volume spiked yesterday as some of these latest sort of source comments are starting to hit the tape. And as you can see, there's— as we're going into, let's say, the 4-day countdown, I'd probably expect this to continue— is a convergence of their odds coming towards each other, as there is a degree of uncertainty of whether or not Powell will indeed secure another term. So at the moment, Powell is still favorite, but it's becoming more and more close to a race as time goes on. And we've got another 4 days to run if those sources are to be believed. So it could be that this comes out over the weekend. Perhaps you could say that's tactical to avoid any market disturbance or initial breaking of the news, give the market a little time to chew over it on a Saturday and Sunday before market reopens for a more orderly response. I can see that point of view. However, I don't necessarily think that even if Brainard does get the nod and Powell has to step aside, I don't think that's a hugely dramatic event. Degree of continuity is there. Market is very well informed about who Brainard is and what her stance on policy is. If anything, as I said before, she has a slightly more dovish tilt. And so perhaps then that is a supportive thing for some of the directional trends that we had with some of the equity movement to the upside of late and so on. But yeah, that's that. Before I move on, just very quickly, don't forget to check out the hub the content hub on AmplifyMe.com. It's absolutely free, and I added some new content in the careers section. You can see there's different sections here. There's interviews I have with industry experts, there's market analysis on different topics, and career sessions. So if you're a student, I know a lot of people have messaged me about applications at the moment for spring weeks and so on. If you click on career sessions, you can access the whole kind of suite of videos here that might be particularly useful for you. And one we put out yesterday is the first of some very concentrated interview questions and how to tackle them. And we did one yesterday. This is our head of China who was a former Morgan Stanley equity trader, and he— we covered basically the subject of how do you respond to a question that you really don't know how to answer. It's kind of a classic one that a lot of can disrupt a lot of the interview process for a lot of students, so do check that out. Otherwise, look, let's move back on, uh, on point to COVID, and let's talk about the EU. And I did mention this yesterday, I've mentioned it a couple times now, um, in the last week, but there's been some movement. Ireland, for one, bars and restaurants must close by midnight now, cinemas and theaters must require proof of vaccination, and people should work from home where possible. These are the new measures that were announced by the Irish Prime Minister to deal with surging infections and rising hospitalizations that they're seeing. Germany at the same time— it's worth noting actually that Ireland vaccination rates are actually some of the highest in the world, whereas Germany, they actually have— with less than 70% are fully immunized at this point in time in Germany. So they're lagging behind other countries like Spain, Italy, Portugal. Portugal Portugal, a real standout actually on the upside for vaccination take-up. The country, Germany, reported yesterday the spread of the disease is accelerating. Cases over the past 7 days are now a record. Deaths jumped to 265, the steepest one-day increase since the late May period of this year. And then finally, Spain. The government in the Basque region is set to announce fresh restrictions given some developments happening there. And so what does this look like from a case rate point of view? Well, here you can see Austria at the top, which has been very aggressive, obviously having a necessity to do so to go back into restrictions. Ireland, as you can see, also very high in context of where we are in the UK. Germany continue to head in the wrong direction. And obviously there's a difficulty here of jostling for position within the newly trying to form coalition government. And so therefore, obviously, putting the nation back into an onerous lockdown can have political consequence for favorability. And no one really wants to do that. But then there's obviously a health crisis unfolding. And so quite a tricky one for Germany to make decisive decisions at this point of time, but quite critical, of course, for their overall economy and that of the eurozone. France, Portugal, Spain, much lower. As I said, vaccination rates here are much better. than what they are in Germany at least. And so yeah, I mean, from a euro point of view, I mean, very much just a mirror image of what we were just discussing with the dollar. But if I put euro-dollar on a daily chart here, and you can start to see some of the price movement— obviously we talked about a week ago or so the importance of around that 1.15 mark, which was that peak in 2019-2020, and the breakdown of that has created some quite rapid deceleration, or decline I should say, in EURUSD coming on the back of the divergent play between a net, a really developing in a negative way COVID situation, which is going to push back further the commencement of normalization of ECB policy comparative to heightened inflation risks, relatively controlled health situation with an economy picking up. We had US retail sales the firmest they've been since March yesterday. Walmart, Home Depot showing really robust demand even as inflation squeezes kind of purchasing power. And that's then leading to the idea of rates rising sooner in the US, but rates remaining on hold or policy on hold in Europe. And hence then this downward direction with the technical breaches just being fairly firm at the moment for EURUSD. So next downside target really you can see is not until we get to the base some of this price consolidation we had around June, summertime of 2020, and we'd still have another point or so to run beyond where we're at at the moment in that respect. So yeah, definitely quite interested to continue monitoring these situations. Obviously, the worse the COVID cases get, the more stringent the lockdowns, the more economic impact that has, the slower then it is for the ECB to be able to move on their, on their policy. All right, a couple of individual stocks stories I just wanted to cover, and I'm going to start off with one, um, which is a, a SPAC deal actually. Um, SPAC deals have been a little bit hit and miss in terms of their success, but certainly this is now proving to be one of the, um, definitely more successful ones. And this is the electronic vehicle startup Lucid, and their market cap yesterday went to $89 billion, which actually makes them bigger than Ford Motor, which is just insane. If you look at the chart here, I've got the black line which is the Lucid market valuation, then got the Ford market valuation and the GM one. And actually, you know, Lucid overtakes GM and Ford valuations in just one day. GM's slightly larger than Ford at this present point in time, and it came after the company's executives told investors that reservations for its first vehicles had jumped and that production plans for 2022 were on track. So those two things have got people in what already is a quite bullish mindset market in the EV space really pumped at the minute. And the company isn't actually profitable, um, it's still in the early days of generating revenue. Q3 revenue— check this out— Q3 quarter revenue was $232,000, and the company is worth more than Ford and GM. It's just in this crazy market at the moment, and that didn't really come from selling any cars either. It came from a battery deal with the Formula E electric racing league. So actually reported a net loss of $1.5 billion through the first 9 months of the year. So yeah, it's just super interesting. Rivian, we had, uh, then, you know, monster performance out of the IPO, and now you've got this happening as well. So be really interested to see how this plays out, um, just given the phenomenal rises we've been seeing these particular names of, of late. The other thing that I wanted to touch upon was Netflix. I thought this was just quite interesting really. Um, as you know, Netflix and their quarterly earnings are always very much focused on their subscriber rates. But as the market becomes ever increasingly saturated, this is a really difficult metric, I think, for the company to handle in terms of longevity of managing their stock price from a board's point of view. And so the company has taken the decision that they'll begin regularly— and I understand from reading some of the articles that it's weekly— reporting viewership numbers for its top programs and films. So quite a distinct and major shift in their strategy because normally that's not shared and they, they're normally quite guarded over those types of figures. But it's kind of a similar thing to what you've had in other companies. You know, take Apple, for example, trying to shift away from the over-dependency of the share price based on markets' perception of the iPhone soly, but as Apple has tried to diversify, it's also tried to pivot and spread. You know, diversification is key to manage volatility. And as Apple have done shifting to services and other wearable products, the watch, the earbuds and so on and so forth, you know, Netflix is looking to do the same. And I do think that this is quite an appropriate way of doing that and Reporting weekly figures to me, I think, is, is good. I think doing it weekly is also strategically quite important. I think if you left it quarter to quarter and you had these quite lengthy blackout periods where the market's left guessing, that's always a very delicate and difficult situation to handle. And so better then that you have more full transparency. I think they've got an auditor in to verify their numbers and stuff like that. So they should come with credibility. And then the market can always price in the reality of what's happening, and that then starts to mitigate volatility upon the release of an earnings, for example. And Netflix obviously has larger deviations than a standard stock, I would say, over, over recent years. So yeah, and the other thing, of course, as well for Netflix is that if you think about most blockbuster series that come out, although there's Amazon Prime and Disney and these other Apple TV and so on, competitors in streaming space. I mean, Netflix is, is the, is the premier kind of market leader in content. They spend an awful lot on it. So I actually think it's a positive as well in the sense that these are numbers that they know Netflix against its peers, they're going to outperform. It's probably going to be better. They've just got more content and they come out and they throw some serious dollar at just pumping out, you know, there's Red Notice. I think there's Narcos Mexico Series 3 at the moment. You've obviously coming off the back end of Squid Game. I understand there's Squid Game 2 coming out, all these different things. And I think those numbers will look really attractive against their competitors. And thus then, I think then shifting away from subscriber base, this would be a nice way to clear out then that competitive differential in, in an investor's sense. So yeah, quite interesting. The other thing is I'd love to get your comments on this, so drop me a comment on the, on the channel, on the video. I was just reading very, very briefly, I was reading last night about Redefine Meat, and basically this is an Israeli startup and they basically said to have cracked what's seen as the holy grail in the kind of catering business and the food industry. Which is they've managed to really inject juiciness into meat. So if you think about like vegan plant-based meat, it's generally been like chicken nuggets and patties, like Beyond Meat burgers, things like that. But apparently this firm can create like beef, like real steaks and lamb flanks and things like that. And it's been actually adopted by some big restaurant names, including some Michelin restaurants as well. So one would imagine the quality is, is there. And Apparently then this meat that's been, um, printed, it has the same structural components that resembles beef or chicken visually and in texture. And apparently research suggests then that 3D printing can insert then the specific layering in of say fat into the content of other soy and proteins and so on that mimics then the composition of real meat and marbling. Which gives a better improved taste. So obviously I'm not— I've not eaten this yet. Dying to try it. But I'd just love to know your guys' thoughts. What do you think about 3D printed meat? Hit me up. Let me know what you think. Would you eat it? Would you not? Why? Do you think it's a good thing? Bad thing? Obviously there's a lot of climate change strapped on the back of that as well. So yeah, hit me up with your thoughts and let me know what you think. Otherwise, let's just look at the day. So we've already had the UK data. We've had— well, we've got the EU HICP reading coming out at 10 AM this morning, but this is the final reading for October, so not expecting any fireworks there. This afternoon, US housing starts, building permits, Canadian CPI data is what's coming out. You've got the API or the DOE oil inventories. And just a quick refresher, the APIs came out last night. We had a build of around half of what was expected at 655,000, pushing those a draw of 2.792 million probably the standout there. As I said, that will all data out this afternoon. Speaker-wise, you've got Fed's Mester, Evans, Bostic speaking afternoon and evening London time. Mester, a hawk, non-voter. Evans, a dove, a voter. Bostic, hawk, voter. The latter two will be just after 9 PM. So after the Wall Street close. You do have Christine Lagarde speaking today, but there's no text expected. Um, so then ECB Schnabel is one to look at, um, because Schnabel will be talking on economics and monetary policy outlook for the eurozone. So could be potentially some comments there to keep an eye on, particularly in the context of what I described to COVID and implemented restrictions that we're seeing across different eurozone countries at present. That'll be at 2 PM. All right, that is it. Gonna let you guys get on with the day. Have a good one. And if you're not already subscribed to the channel and you're watching this on YouTube, love for you to hit that subscribe button, drop me a comment. Uh, love to get engaged— engagement on the channel. And I will see you tomorrow. Take care.