 My name is Anthony Chung. I'm the head of market analysis here at Amplify Trading. Don't forget to subscribe to the channel to get daily content from myself and the rest of the team. And if there's any questions about today's briefing, feel free to leave a comment below. Okay, good morning folks. It is Thursday the 12th of November. I hope you are doing well. Going to have a quick look around the markets and rather than really focus so much on the charts in this briefing, I really want to get you up to speed on the COVID situation, particularly in the US, and also a few things to think about in order to kind of anticipate what might happen in the coming weeks, and also to put a little bit of context as to the moves we've seen this week, of course, kicking off with that virus vaccine information coming out of Pfizer, of course. So just having a look at the charts this morning, let's start in chronological order on Wall Street last night. This is what the heat map looked like. And a bounce back for the tech stocks. And so the NASDAQ 100 jumped the most. It was up about 2.31%. The S&P comparatively was up just around three quarters of 1%. The Dow was actually flat to minor negative. Some of the stay at home shares, which had been pretty battered earlier this week on the back of the Pfizer news, put in a pretty decent recovery. So lots of Amazon Apple and the mega cap names up around 3% to 3.4%. In terms of Asian equity markets, traded mostly lower, sentiment gradually deteriorating from the somewhat mixed performance we had on the closing Wall Street, as I just mentioned. But I'm going to talk about this a little bit more. There's been a lot of noises about potentially a rotation into cyclicals, as we mentioned before, out of some of these fairly stretched moves we've seen in some of the tech space. But I'm going to give you reasons to think that now's not the time for that. Because I think in summary things are going to get worse before they get better. And I'll explain why in a moment. But having a look then at the charts and how things are shaping up this morning, equity index futures trading negative. You can see here that Dow, just finding some technical resistance at around its S1, which is quite a nice area now of resistance for the price activity before the US comes in that could well cap the upside here, which is around that 29175 area, which was around the support point that we saw before the bounce that came into the close on Wall Street. Elsewhere, the NASDAQ down around 55, the S&P kind of locked within a bit of a trading range from the session from yesterday morning, defined by a high of around 74.25 to a low of 40.25. So it was around the bottom end of that range for the moment. Elsewhere, gold is up $4, but relatively flat. The dollar is largely unchanged, albeit has been moving higher in the Asia-Pacific session, which has weighed on the major pairs to a certain degree. Under performance though, being observed in sterling currency, as you can see here, finding a nice area of again resistance from the support levels from yesterday afternoon. It's come back up to retest before pushing back down now to the S1, which brings us into play around 131.70, just above is the S1, and then the low that we had before the rally we saw on would have been Tuesday morning. We have had some UK data already out this morning, and for Q3 preliminary GDP, it came in quarter and quarter at 15.5%, at this soft and expected 15.8%. Other numbers that came in, things like manufacturing output was 0.2% against an expected 1%. So although this data I think is largely insignificant because the market is now forward looking given the new COVID situation developing right now and the current then restrictions in place, which would impede Q4 growth, the fact that Q3 was a little bit softer already and we're expecting further deterioration going forward until the end of the year in the Q4 GDP readings, perhaps in a little bit of a negative headwind just to weigh on sterling. Obviously some Brexit deadline is going to be missed, as we heard yesterday, and also the dollar has seen a degree of strength in the overnight Asia Pacific session. So interesting to keep an eye on that pair this morning. Otherwise, oil, most notably for oil, is just held on to the gains from yesterday. We're right at that coloured kind of rectangle, which was the restricting the price over a two month period really through September and October. We broke through that yesterday just giving some of the renewed kind of pick up in demand expectations, albeit I'm probably going to dampen those a little bit by the time I finish this briefing. Also we had to draw down in the APIs remember because of the federal holiday we had in the States yesterday for Veterans Day it means that then that date of the DOE is going to come out this afternoon and our expectation there is for a draw down following the American Petroleum Institute figures we had two days ago. All right, so going to delve straight in at the deep end. I'm going to start with this chart and I'm going to give you my latest take on what I think about COVID and how I think it's going to impact markets and be perceived by market participants in the coming weeks. And starting off with this graphic, this is new reported cases by day in the United States of America. Current US daily record is now over 145,000 and hospitalisations as we can see here have jumped more than 10% between November 6th to yesterday in six states and led by a 20.4% jump in New Jersey that we've seen. Overall what has this led to then with this renewed kind of surge in cases in the US? New York Governor Como came out last night and said the private indoor and outdoor gatherings statewide will be limited to 10 people and that gyms, bars and restaurants must close daily at 10 p.m. These new enforced restrictions will come into effect on Friday. Now a few things here to be aware of then. Infectious disease experts have warned yesterday that the surge in coronavirus cases in many parts of the US is likely to get materially worse in the coming weeks. Now I saw a fantastic thread by a fairly well followed scientist which I'm going to touch upon in a moment. You can see the entire thread on my Twitter account. In fact I'll show you now. So if you just go on my Twitter account I reshared it. The chap's called Trevor Bedford. He works for Fred Hutch which essentially is an organisation that looks at studying various different viruses, everything from cancer to HIV and ways and means to try and counteract that in terms of medical science. But he had a really good string of tweets that I think needs to be understood. Basically the point that he was trying to make was that deaths, so this is the case numbers surging of course from what we've seen in America. But the death numbers are relatively low, comparative to wave 1 of course that we saw back in. The peak really came around the 17th, 16th of April when numbers were just over 2200. We currently are around numbers of around 1400 as of yesterday in the US. So around half let's say. But important things to recognise here is that deaths are a lagging indicator. And basically this chap's run the maths and you can approximate that there is a timeline of around a three week lag reported. So deaths lag reported cases. There is a lag between when a case is diagnosed and when the individual may succumb to their disease and there is a further lag between the date of death and the date of which then the death is reported. Hence then consequently there's a three month lag. Now doing the relevant adjustments to calculate them predicted rates it is anticipated that with around let's say 118,000 reported cases we've even gone above that now by a good 25,000. But at that figure when these numbers were run in the US with a seven day smoothing out of the averages it would translate to approximately 2150 deaths being reported in 22 days time. So basically the beginning of September, a beginning of December, excuse me. So what we're saying is that this graphic here now would approximate that this acceleration, which you can quite clearly see that the rolling average here is getting more steeper in terms of its trajectory that that is going to end up looking in if anything going in excess of the peak of what we saw in April. We're just right at the bottom of it at the moment and that's what because of the three week lag with this this graphic here. Now a couple of things to be aware of as well is that even if a vaccine is approved soon and obviously this has been the main focal point of markets this week everyone's kind of latched on. And I think a strong degree of that is behavioural of people's want of course to address humanitarian crisis that we're currently facing on the global level. But even if a vaccine is approved soon people must continue to rely on face masks, social distancing for a number of months as a minimum most likely because initial vaccine suppliers will be limited of course we know this and will be reserved for healthcare workers and other frontline workers and demographics such as the elder nursing home carers things like this. That means then that the more kind of productive that's called the members of a society that create their economic growth they're going to be pretty much last in the queue because predominantly a lot of these are going to be of the age that would not be on the priority order meaning then that more widespread inoculation is going to take time. So not only are there these barriers we've discussed before about logistical you know the two-shot process like what we had with Pfizer it's got to come a month later once it's got to be transported in ultra cold temperatures which brings about infrastructure issues with costs so on and so forth. The other point then being is that by the time we see full inoculation it's going to be a long period ahead it isn't as I would say what politicians are suggesting like in the UK right now that yep Christmas is sorted don't worry guys the Pfizer have got the vaccine we'll get it out there in December far from the case that that will address the current situation in my humble opinion. This leads me then to think generally that the market has inappropriately reacted so far this week to the latest fires of vaccine news particularly the initial knee-jerk moves that we're seeing and I think that they're going to revert back to having a more pessimistic view about this current situation. Now a couple of things here the US is going to be behind the curve it already is I mean one of the things that you're seeing here at the moment is that quite the opposite is happening in mainland Europe in fact numbers in France Germany and one of the harvests here areas Belgium their numbers of cases have started to plateau irrespective of the fact that things are spiking obviously deaths are rising as are hospitalisations because remember it's a forward indicator the fact that cases are plateauing so we can't anticipate those deaths to start also doing the same for a number of weeks. The point is though we're hitting a plateau on this exact graphic we're here we're looking in the US and so that's come because of proactive and pre-emptive measures that were taken and fairly stringently so in the cases of France for example so even though the cases have been bad they've been dealing with it in a fairly prompt fashion quite the opposite is happening in America of course because you've almost had a political distraction which is a US election of which the current administration may I remind you Trump has made zero mention of this because he's still trying to legally challenge an election in which he's quite clearly lost so for me again a lack of leadership and interest in an outgoing Trump administration with very little political gain to be confronting this issue which is if anything only going to stain his reputation as president now he knows he's going to be leaving means then that there's going to be a lukewarm response to really tackling this as it should be done scientifically because we know that well if there were no politics in human society we probably would be taking a radically different approach to this but that's not the case and obviously politics is right right in there in terms of how these countries are responding with this and I think in the US it's going to be they're going to be distinctly behind the curve and my worry is is that these numbers here we're looking at already currently going to mean that the death rate is going to if anything exceed phase one but I think that that number could have the potential to go way higher than phase one now just looking at the country on a on a nationwide map you can see the spread is already happening before it was really more centered in Wisconsin, Michigan, Ohio these types of areas in the Midwest but we are we are gradually moving out again you can see both east and west and another concern I have here is Thanksgiving is coming November 26th so we've only got a couple of weeks and obviously this is one of the major holidays in America where people typically travel they move around they mix with family members and friends so the potential for further transmission of this virus without any appropriate more stringent measures being imparted I think it's going to be difficult so a lack of national leadership I think puts a lot of pressure on on state governors to really take action and so again you're probably excited to come to the realization that I'm I'm quite bearish on on what this means from a from a markets point of view then I think it's way too early to talk about this whole rotation out of tech and the kind of end of what has been a pretty phenomenal run for a lot of these pandemic related individual equity stories because what I'm saying is I think things are going to get worse particularly in America and so I think that that's still got some legs to run in the likes particularly in companies like Amazon which are obviously thrived in this type of environment so you know COVID cases get worse restrictions get tightened inevitably lockdowns take place um and I would not be surprised in America if this gets rolled out all the way through into next year and then Biden comes in and obviously he's talked about his willingness to do further lockdowns so I think you're good for the moment in terms of some of these tech names and I think it's a it's a little bit preemptive to start talking about then a full-born kind of rotation out of that I don't think that's going to be a case at least for another three to six months the form of being the earliest possible I would say in my opinion so yep sorry to be the the bearer of bad news but I kind of feel compelled here to really dish out a dose of reality when everyone's I feel has got a little bit ahead of themselves on the vaccine front this week now it's not all doom in gloom though Anthony Fauci the the kind of leading infectious disease expert in the US he was speaking in the conference yesterday and he said he was optimistic about a forthcoming update on the virus from biotech firm Moderna if you remember these are one of the key companies that's been around from the beginning from Gilead Astro with Oxford University Moderna Pfizer and BioNTech these are all the big runners if you'd like for the vaccine in clinical phase three trials now he said he would be surprised if we didn't see a similar degree of basically efficiency of the vaccine with positive results comparative to that of Pfizer and the reason why people are talking about this is that Moderna are due for an update in the coming days so it is something to look out for but as much as that will be a good thing you know on the surface more companies getting to the point of where the science is proving more effective is definitely a good thing however I do think that in terms of market's response it is going to be diminishing as in I think the first cat out the bag was slightly caught markets off guard when Pfizer just broke the news I think as more companies come out and say similar I think it's going to have a lesser degree of impact in the day training environment because of the factors I was talking about before and we have done throughout the week about the whole timeline to distribution inoculation as well as things in the context of getting getting worse at this point in time the silver lining of course and this is what's helped actually companies like Pfizer and Moderna is that with all these case numbers accelerating it means that these scientists can can gather more data in quicker and so therefore hopefully they can achieve their end result in a more timely fashion we hope touch would so yeah um that's it really and I think really more I wanted to say on that but that really was I feel quite strongly on this at the moment um we shall see but I'm just getting you prepared 12th of November you heard it here um this is going to get quite bad in the states coming forward and and I'm afraid Christmas could well be cancelled at this rate all right let's have a look elsewhere um OPEC yeah it's been a couple of reports out of OPEC overnight and obviously a lot of people talking about this price has recovered quite sharply throughout the course of of this week I mean we were just two weeks ago trading near $30 a baron and we are now trading upper 41 and a half so sharp recovery um and this has put a lot of emphasis then on do now OPEC plus actually need to do anything uh they've already really committed themselves to roll over but for how long is the kind of question and this is the latest talks between OPEC and its allies are zeroing in on a delayed next year's planned oil output increase of three to six months according to several delegates in the Bloomberg article from last night the ministers are holding their online meeting at the end of the month November 30th to December 1st so I don't think it would be too much to add there as I said in the oil market short term um definitely this covid situation would not fare well for oil demand expectations which have been reignited earlier in this week if things play out as I've mentioned on the covid side in America it could well be then the oil price does start to give back and drift down again over the foreseeable weeks to two month period um so yeah that that's it on the the OPEC side the other thing was Brexit we obviously had the headlines yesterday um we saw reports um the island cds the EU UK trade talks going past the mid November deadline of course that was for this Sunday uh this fits exactly with our baseline expectations we've been talking about on the desk for for a while we never thought that we're going to strike a deal this week not with the more kind of tangible uh and legal real hard deadlines coming until we get well into December so we're a little bit of volatility yesterday uh on that coin but I just want people to be super careful we're not getting overly committed to that type of news flow in the context I really didn't think it was that surprising so after it kind of blipped high it blipped down and it kind of came back up and now we've started drifting down but I think that's largely for for other reasons uh as well so yeah couple things to to be aware of we could see further Brexit headlines before the end of the week I'm sure that we will just given that kind of tentative deadline that was in place at the end of the week I'm sure uh the risk for me is more about um going into the end of the week there was supposed to be a deadline strategically if I was Dominic Cummings I'd be very much putting the pressure on Boris to be quite stern threatened to walk away that whole kind of pantomine saga to kick off once again just to keep the pressure on at this point in time this irrespective of the fact that obviously in the UK the COVID situation is particularly challenging at this present point in time okay quick look at the calendar for today what have we got we've already had the UK data as I mentioned we are going to get the IEA oil market report later following the OPEC one we had yesterday um Eurozone industrial production at 10 US CPI and weekly jobless claims coming at 130 I don't really see either of them being too important quite honestly um particularly on the inflationary side there's no real pressures at present given the economic environment and obviously with the adoption of AIT we know we're near becoming a real focal point for Fed policy at this point we're definitely downside risks emerging ever more so and then we've got the DOEs as per normal holiday impacted data coming out a day later it's going to be at the slightly later time of four o'clock London not 330 speakers though there's a few you do need to be aware of Bank of England's Bailey the governor does speak and he's already started speaking in fact he's just said that sterling data was in line with the bank's expectations recovery has been strong but we still have a huge gap in the process being very uneven I don't think that's really too surprising to be honest nothing really interesting out of that but he is speaking at the moment you've got ECBs to Gwendoffs, Fed's Evans, Fed's Williams and Bank of Canada's Wilkins all speaking today and it's the second day of two of the ECB forum central in Portugal and Panetta, Mersh, Schnabel and Lagarde probably the main one here to be aware of and I'll be sharing the live links at the time is at 445 Christine Lagarde, Bank of England Governor Bailey, Fedshire Powell they're speaking on central banking collectively on a panel discussion from 445 so that's definitely one late in the day to to be aware of that could be interesting I'm not expecting as a base expectation anything really to be said I think they've already shown their hand in recent commentary and bank decisions that have only been a short time period ago but of course these are the main players in the mix and so any further insight as to what's becoming perhaps even more downbeat would be quite interesting all right that is it we're going to leave the briefing at that I have noticed that the dollar is taking a bit of a turn as I'm coming to the end of the briefing so it's given up any of those overnight initial European entrance gains and just backing off in a dixie a touch which is just providing a bit of a bid tone here into some of the other currencies