 Okay, very good morning. It is Tuesday the 2nd of November. I hope you're doing well and We'll start with the heat map. We're also going to talk a little bit about Tesla the RBA Rate decision that happened overnight little update on Biden and his latest complication on Capitol Hill as he tries to push through that spending bill I've also got Brexit the French staff stepping back on their threats on the fishing rights And then we'll look at the day ahead Overall though, I would say just looking at the charts this morning Pretty quiet Most major products across the different asset classes are trading Relatively flat. You can see here in the center charts whether the DAX the NASDAQ all the S&P We're kind of consolidating at and around the record high levels at the moment in time And that's makes sense logically. You've got the the Fed formal announcement of tapering expected tomorrow You've also got the lights of the OPEC meeting on Thursday the Bank of England Will they won't they hike rates on Thursday and non-farm payrolls on Friday? And so I think the market at the moment quite happy to just sit on its hands More broadly speaking and just wait for these major risk events to materialize I can't really envisage many people in the market wanting to really commit to any new positions ahead of those Affirmation events that are coming up So overall, I think the briefing today probably will be fairly concise in that respects because none of the major Stories here are too much of a focal point. I think that will shift that narrative of relative Consolidation until we get to those things barring anything unexpected, but let's start with the heat map and Before I get into Tesla one thing yesterday's we did finish positive across the board the S&P up about two tenths The Dow slightly higher quarter and that's like up six tenths of one percent the standout stock no doubt was Tesla you can see down here. They were up eight point five percent One of the main things there that was underpinning the company's share price and what actually helped them breach 1,200 bucks to share for the first time ever Was the Chinese firm Gang Fing lithium company won a deal to supply Tesla with lithium products for three years and my understanding is That was a renewal from a deal that they struck three years ago, but nonetheless with Tesla obviously With as Musk has said himself, it's not really so much a demand issue, but a supply issue Securing that deal just helps them in their ambition to really scale up their manufacturing and production of their vehicles It is worth noting though on the Tesla front I did see this morning CNBC were reporting that the CEO Elon Musk did say last night that the electric Vehicle company has yet to sign a contract with the rental car company hurts So is which is a little bit confusing because obviously that was the news story It really juiced their shares by good twenty percent or so last week on the back of that hundred thousand Tesla car order from Hertz, which would have a kind of nominal value of around four point two billion US dollars and Musk saying last night that actually we're not signed a contract yet I mean at the time I was I think I mentioned in the briefing I actually went to the Hertz website to actually look at their official press release And it looked fairly robust in terms of the details of what they're saying. They certainly had a pretty In-depth marketing plan associated with this deal But I was kind of looking for this Which was to me four point two billion just seems like an incredibly large order and I just wondered how Hertz is financing that and also the kind of questions around whether Tesla can actually fulfill that type of order size over a Relatively short period of time. I think it was 14 months to hit that hundred K vehicle delivery target so it'd be interesting to see what happens here because Tesla shares obviously are Hugely elevated at the moment Just given the run-up that we've had and in fact, you'll have to forgive me for the markups on this chart They're fairly dated, but you'll get the sense at least of the share price movement of late And this is having a look at Tesla's shares And here we were back at the previous all-time high at the beginning of the year and again We were closing in on on nine hundred kind of dollars a share and people were really Saying this is overbought and then we did have a quite a sizable correction You remember when Elon Musk was on Saturday night live and it was a bit bit tragic They then had lots of China issues with manufacturing He made his U-turn on Bitcoin receiving Bitcoin payments The shares came off and then we had that that one day if you remember back in May when we had that day when Crypto Bitcoin collapsed in prices and that was when they kind of fleshed out a double bottom from the low in March But you know just check out where we are where we are at the moment. You remember October Bitcoin had a really aggressive rally a lot of that was building in the anticipation of those now launched Pro shares and Valkyrie and other Bitcoin related ETFs and the market rallied quite aggressively there and that We tend to see a fairly sympathetic move Translate over to Tesla shares then Tesla posted record revenues and profits in Q3 of 2021 during this earning season And now you've had Tesla Hertz order, which is what this big jump up in prices here Which is really this this area and then we've just continued to to plow on I mean actually since that Hertz order Let's just have a quick look Up to here. We're actually up 33% since that order came in so pretty incredible moves And I know there's been a lot of options activity as well in this stock and You know since we've gone over a thousand it's just climbed rapidly But yeah quite interested to see how that stock plays out by a factor of two-fold one Musk's comments overnight about they've not actually signed the deal yet And as I said since that news the stock is up in excess of 30% And then layer in as well the other factor of the fact that the shares are just really Overbought in quite a short term from a momentum perspective wouldn't be surprised to see a fairly aggressive pullback Don't get me wrong I'm not saying we're going to collapse back down 30% But you know just don't be late joining the party trying to jump on buying the top in that respect So that was that was tessa the other thing of course Elon musk The just marketing genius that he is has come out and he's tweeted overnight as well humankind And then He's he's actually tweeted an ancient chinese poem What this poem is I mean you can look it up read about it Something to do with two brothers arguing and beanstalks and things of that nature But the what people are suggesting that this is is a nod to the dogecoin shiba inu Cryptocurrency spat that's happening at the moment to me That's that's Perhaps what it is in reference to but to me it's just one of those things that the pattern I see In my mind, this is very a discretionary observation I don't have quantitative data to back this up, but you know my job having to be to sit here For many hours every day a year after year is his activity is so similar to donald trump when donald trump was president Whenever and a certain subject topic or agenda gets right up to the kind of maximum point And in this case reflected by a share price being quite extended to the upside Trump would do the same like this he'd come out with a kafifi moment Some random madness That everyone talks about every newspaper prints it and everyone just kind of pumps it and it just helps juice The narrative a little further and so yeah, I think it's quite Interesting how he's done this as we're just printing and given the share price Above 1200 and the share price moves that I've just explained so it does not surprise me at all And in fact the more crazy the test the share price becomes the more crazy his tweets will likely become to support and sustain In an attempt I believe to keep that going because he knows as well for sure that it will it will come off And it wouldn't be surprising as well for me I think to hear Elon Musk in the coming days given where we're trading in test the shares to say something along the lines of I think the shares are a little a little overextended. I think they're quite expensive I think this moves a bit overdone. It's almost talking down his own stock But again, this is almost a self preservation mechanism so that then when the stock comes off he exerts and the optics of control and um, it kind of Limits the the collateral damage of the downside and then so on and so forth. So yes, he's such an interesting individual But certainly highly as we know intelligent and I'm sure he knows what he's trying to attempt to do here and Who can who can bet against him at this point in time? So yeah, that's that's the latest there Actually the outperformer yesterday wasn't so much the big mega cap or anything like that Um, the actual winners yesterday were the small caps the rustle 2000 in fact was the standout and rose 2.7% yesterday that was the biggest daily percentage gain since late August in fact But at the moment we're still encountering a lot of complications on capitol hill about getting various different bills passed So we'll see how sustainable that is in the end. But generally covid things like that I'm looking at a much better condition now than what we were several months ago Allowing the economy to continue to to pick up and again, although the q3 advanced gdp reading we had last week was weak The idea being is that things will gradually start to to pick up in time All right The other thing then overnight was the rba the australian central bank abandoned Yield control to combat surging prices amid an improving domestic outlook underpinned by highly vaccination rates They kept their interest rate at the same rate at 0.1 The one thing I would say here that was quite Interesting is that it was only like a month ago or so Maybe slightly longer when they were talking about we're not going to hike rates until you know 2024 And now they've gone all full swing to a period of just Fairly abruptly, but given some of the yield move that we've seen Taking out taking away one of their main stimulus tools, which was your curve control. So interested to see how quickly Things can shift The currency overall the Aussie dollar actually dropped and declined overnight Let me just bring it up so I can show you what that type of price activity looks looks like I mean, it's not the biggest move in the world, but it's certainly directionally fairly clear to see So you had some initial bout of volatility. I'll put this on the 60 minute So you had a little bit of volatility and then just general downside and you can see here We're kind of broken out a little bit of that range that we've been trading Really going back to around the 26th the end of October It's a bit downside seen with the lower above about 40 pips at the moment in the Aussie dollar and the rationale being there is that the Governor low said it would still likely to take some time for inflation to sustainably return to its target So short-end sovereign bonds also raise losses as the rba dampened bets for any aggressive tightening from here And so we've had a little bit of a weakness just come in The other thing as well on their forecasts, they cut their GDP growth outlook for 2021 But they did upgrade it for later on up to 5.5. So short-term more pressure But something similar we've been seeing in other major western economies Which is more pressure in the short term given the high inflationary conditions and the impact that would have on Economically and then once that then pressure starts to fade the economy starts to catch up pace back into next year in 2022 all right into US politics biden's domestic agenda getting another setback on monday Again the thorn in his side. I'm sure biden wakes up in a cold sweat dreaming of joe mancher at the moment as A sight that might be Because manchin said he would not commit to supporting a 1.75 trillion framework on social spending And climate change that was unveiled last week And so again as a reminder the senate is an absolute even 50 50 split. It's the vice president kamala harris that Holds that then Vote in a tide situation to then tip the balance in favor of the democrats. So if joe manchin is not playing ball There's no passage of any deal at this point. And so particularly problematic that any one democrat whether manchin or not Can effectively veto power away from what the president's agenda is and and that's kind of what's happening at the moment So it drags out a little bit further And then looking at brexit. I talked about this yesterday. It's just a quick update macron has said that fishing Right dispute talks between the u.s. And france will resume as we know today But he's already gone in and said that retaliatory measures against the uk over the fishing dispute will not be Implemented at midnight as talks are ongoing and the actual movement in the pound is hard to see because there really isn't any So it's just more of a political update than it is one meaningful for the sterling currency And then quick look at the day ahead. Yeah, really quiet day And this kind of then goes full circle all the way back to what I said at the beginning A lot of people waiting for these main events to happen really commencing tomorrow night with the fmc and so today Again barring anything unexpected could be relatively quiet So I'd definitely be looking at the charts from a technical perspective looking at the general range trades that we've been Sitting in for the time being and may well be respected for now Because today there's not really a great deal coming out Really nothing major at all as far as economic data is concerned. You've got the api crude oil for trees later on tonight So then from a speaker perspective central banks, no one really too meaningful ECB's elders and is not speaking on anything economic or policy related fixed income supply of the uk and 25 and 2071 guilt auctions and then from the earnings perspective Just kind of slowly coming out now But so you're aware if for anyone trading the footsie at the open in an hour's time because I'm just coming up to 7 a.m. This morning here in London you got BP and standard charter And then later on in the u.s. You've got Pfizer one of the major names reporting today All right, I'm going to leave it there. Let you guys get on with the day. Hopefully that was useful and yeah Enjoy the rest of the session. Take care