 Okay, very good morning to you. It is Thursday night of July. Hope you are doing well. And first off, thank you very much for everyone who managed to join us for the live webinar yesterday evening on risk management. Really appreciate the engagement and the questions. And if anyone would like a recording of that, then just feel free to drop your email on YouTube on the comments section and I can send you a recording if you missed it. But otherwise, let's get straight into it. Before I start talking about more stimulus coming out of the UK government from Rushi Sennak, let's just have a look at the overall charts this morning. And another positive close on Wall Street. Again, it comes despite now US infections of COVID-19 topping 3 million. More than a quarter, that is, of the global total is coming from the United States. Arizona, Florida continue to report increases, albeit those being at lower levels than their seven day average. And I definitely think it's that latter point for the moment that's keeping markets fairly comfortable with the notion that these, the steepness of the trajectory of the curves of COVID cases in America, albeit is going north, is in a controllable fashion as per where market expectations were just a week or so ago. So the virus really is going to encompass only a very small part of what I'm talking about today. That does not mean that it's gone and forgotten. Obviously the nature of how the spreading of the virus can compound very quickly, particularly when this report starts reading this morning where people are trying to block Trump coming to give his live kind of campaign rallies because it was reported back in Tulsa, Oklahoma, that actually the fact that he held this physical rally and people not all were wearing face masks, that actually did increase the reproductive rate in that area. And so it definitely is something to monitor, of course. I was seeing some other numbers as well this morning in a Gallup survey, talking about how people are getting increasingly kind of frustrated with social distancing and actually people's adherence to that rule is decreasing. So not quite out of the woods yet, but for the moment for the purpose of this briefing, it's not really going to dominate too much because it's not really an intraday focal point right now, but keep an eye out for those updates of course this afternoon. Otherwise, in the other charts, the NASDAQ back up to those all time highs again, it's in a major tech stock still kind of leading the way and I'm gonna talk a little bit about that in a moment. Interesting note that came out of JP Morgan that's worth talking about. But you can see technically now a key level to keep an eye on on the upside when looking at the NASDAQ 100 future got rejected from it yesterday. When I say yesterday, I mean the late US hours and the early overnight Asia Pacific hours. So any pullback here, there's quite a nice area of support in terms of the actual near-term range for the NASDAQ that's probably worth keeping an arm but those upside levels for sure will be now a key marker to the upside to watch. Otherwise, gold has been continuing its ascent and this was something which I've been talking about in the briefing for a while. We were on the desk here of the notion that if we could really break above, it was like we were banging on the door a couple of times on that key area just short of 1800 and we had that kind of almost false break last week when we got above 1800, then we saw quite a wicked pullback but now we've got above there. This is the kind of price movement that we were anticipating and I know Will's been in this long for a decent period of time now, a number of weeks looking for this to materialize and here it comes and we're trading at 1820 this morning and you can see here technically there's not a lot on the upside in the form of resistance. So I would say if anything, the psychological levels of round figures at 18 every clip 30, 40 and then obviously 50 all the way up to 1900, I really don't see too much in a way to step in the way to halt the rise of gold over the medium term. All those risks still remain irrespective of what I've just said about the virus. It still remains a decent asset to maintain some exposure to just given the overall just general global environment at the moment and the risks that are still on the table. In combination with of course, the idea that more stimulus ultimately, what does that mean for inflation as well later on down the line? So gold this morning intraday is backed off that aggressive run up that we had yesterday afternoon but near term the pivot level is probably a solid level because just underneath the pivot level in gold you can see here you've got that cluster of previous resistance and support. There's probably going to be an area that a lot of people will be looking at today. So a nice band of support here if we did pull back, if anyone was still of a bullish mindset to reassert the long position in the short term. In the currency markets, the Dixie's is a touch softer. That's helping some of the major pairs and we just move this chart here to Euro six. So Euro dollar in the futures was finding a bit of resistance near term on the R1 level in the overnight session. Cable though continues to rise and obviously this is going to kick off then some of the things we're going to talk about but it's interesting and this is something for any new trader to be aware of. When it comes to government announcements particularly in the UK through all my years of watching markets whenever the government does make announcement whether it's just generally the budget is normally the main one or the autumn statement or something like what we had from Rishi Sunak yesterday. It does tend to be very well telegraphed in the press. The government are in the business of kind of like not just waiting for this big event and then bang they drop the bomb. It's more about trying to instill confidence so what they do is they kind of drip feed into the press up to the event all of the things that are likely to happen. Remember in the Sunday times now I think this was two weekends ago if you go back on the briefings the Sunday times was talking about the cut to VAT in the hospitality sector looking at potential cuts to or changes to the stamp duty and all of these things of course materialized. So yeah it probably explains then a little bit of the front running of Sterling buying early in the week and if you actually looked at the pound when the Chancellor was making his statement yesterday although some of the related stocks did move in some sectors like pubs and restaurants just given some of the things that he announced on that kind of 50% discount rate that the government would stump up in the month of August for anyone dining between Monday and Wednesday those shares responded quite positively but the pound actually was very little changed and that's often what happens with these kind of budget related commentary that we hear but look an overall assessment here of what the Chancellor has done they've raised the threshold of which sales taxes paid on stamp duty to 500,000 until the end of March at the level of which then 90% of buyers probably will not have to pay any tax and you know just I find this quite incredible because I think the housing market in the UK is about to go crazy then I mean this is just unparalleled what he's done I mean personally this is quite good timing because I haven't yet exchanged contracts on a house move that I'm going through at the moment so Rushi's certainly saved me a couple of pennies but the idea here is that I mean from my own experience we went to an estate agent and the property didn't even get online and it already sold you know I think we had something like 10 viewings in two days so it's incredible at the moment and the other estate agents I was talking to at the time just given you know because I've been in it at the moment over the last couple of weeks you know they said the demand's been going crazy I mean I can only speak for London but I guess London is probably somewhat exacerbated by the idea that people want a bit more space and fortunately I've been lucky to have a garden and things like that and so people moving out are probably central central out to a little bit on the fringes looking for a bit more space may have had something to play for it but then the property that then I was looking at was on the market and sold in two days and had actually had to overpay above asking so you know I think the demand was already there was spectacularly strong and was coming back quite aggressively and now that they've dropped this new development with cutting stamp duty I think house prices are gonna go crazy again and it's almost like the financial crisis all over when house prices obviously rocketed in the years thereafter now of course politically this will this will probably carry some connotations in regards to then you know if you have money or then fine to buy a property it's gonna help you if you don't then well it doesn't really have much of an impact and so it's only gonna make then affordability of housing potentially more harder in the long run but look at the moment I think short term I think this is gonna be a big positive for the UK housing prices for sure the other main thing that he he announced was additional 30 billion pounds to head off the unemployment crisis this was mainly focused on young people low income workers being the focus there and at a potential cost of 9 billion pounds they were offering an incentive bonus of 1,000 pounds for each employee that a government would cover for companies bringing back furloughed employees but just reading what some of the analysts have been talking about this morning and some of and more importantly the industry bodies that represent say employment tribunals and employment groups is basically that I mean put yourself in a company's perspective the government has said they're gonna cover a thousand pounds of a bonus if you take back a furloughed employee but think about the cost of that employee to the business and if your business has been impaired significantly by COVID-19 well a thousand pounds really is not gonna make a lot of difference because you're gonna make a much greater cost saving and it's gonna be much more beneficial for your business just to cut that employee so there's a lot of people that have been quite critical of that particular point and that's not a small point it's gonna cost the government nearly nine on 10 billion pounds in order to facilitate that so be interested to see how that plays out the hospitality value added tax I think will be quite a forceful factor for the sector to 5% from 20% for the period of the next six months just to get things going again with that eating out in August kind of discounting period as well to come in so that's the overall summary of what happened and to be quite honest I don't think there was anything particularly surprising there a lot of this had been as I said leaked into the press but that is always the case but it does lead on to a couple of interesting things and I'm just gonna keep this relatively short but there's a good article in the FT this morning and it's talking about can Sunak, the UK Chancellor, will Sunak will not be able to play Santa Claus forever? I was talking to a couple of people yesterday and they were kind of singing the praises of Rishi Sunak obviously he's thrown a lot at the situation which has come at the sake of paying for a large proportion of people's wages that the government's been stepping in in regards to furlough and now with the stamp duty side of things and everything and anything in between his popularity if you like if you look at a lot of polling comparative to say the Prime Minister he's way more popular in this regard but that's not a surprise when you're the guy that rolls up to your family Christmas party and start handing out the biggest and best presents or then you're gonna be the most popular uncle in the room so the question comes of course in the slightly longer run which is how COVID-19 has really hit public finances so this is a look at public sector net borrowing for 2020-21 and when you start to kind of accumulate everything together and what a different world we were living in pre-pandemic this was the budget forecast pre-pandemic and look at the size of it now I mean it's multiple times larger as it's needed to be given the severity of a global health pandemic is gonna have when you just literally stop doing business from one day to the next but just cycling through this borrowing is set to hit 360 billion pounds by the end of the financial year and what I thought then was quite interesting because I know we have a couple of students that watch these briefings as well is context and really encapsulating from ONS data where we were and what this looked like on the increase then in net borrowing in order to counteract the recession that followed the global financial crisis and that's that hump that we can see here but if you look where we are at the moment I mean we're more than double that level in terms of the estimate of what it's gonna look like over the period by the end of the financial year so it's way over and above the type of reaction that the government has made in order to offset the economic downturn and in regard to public debt it's already now larger than annual output of the economy so public sector net debt as a percentage of GDP is now just over 100% as you can see here having tracked pretty much sideways around 80 in the aftermath of the pickup really from 40 where it doubled during the response to the financial crisis and obviously this distinct pickup that has now seen debt larger than what our annual growth output is in our country so there's no such thing as a free lunch and one of the interesting things here is at the moment a lot of this is being propped up by the Bank of England obviously doing their quantitative easing program they're actively purchasing bonds at this point so there's a lot of forces here that are propping up the market and confidence but what's interesting here is that you know, Sennach will not be able to place under clause forever is a good point because at some point then things like the furlough scheme does need to come to an end and what obviously Sennach is banking on is that for one we see a controlled and a non-significant increase in COVID cases in the case of a second wave virus that allows the economy to continue to reopen and get back on its feet and it's that process accelerated by all of the stimulus that he's announced not just yesterday but since the pandemic began the question mark then is if that doesn't materialize you know, where does that leave things come to kind of autumn where what's gonna happen in the autumn all things being equal he's gonna have to start putting out a roadmap of how exactly is this gonna look like beyond the initial reaction what happens next what's the government's intention to get this under control and you know, we know what happened after the period of 2008, 2009 that's when austerity starts to kick in because the government needs to now start figuring out a way of paying back this exponential growth in debt that they've accumulated to deal with the immediate danger so yeah, that's not so much for trading the pound now but definitely economically I think it's gonna be interesting to see how this plays out in the second part of the year and obviously there's this small thing called Brexit that we still have to solve as well elsewhere just quickly going back to the charts and the intraday picture not only was there kind of a positive close on Wall Street, Chinese equities rallied again the Shanghai Composite was up for an eighth day so Chinese stocks are up about 9% for this week I mean it's just been crazy so the call to arms if you like from state media to galvanize the retail trading community which obviously is slightly different because it's so much more dominant in mainland China than it would be in the Western world has really just ignited things at the moment so China continues to rally on that point we have had some Chinese data overnight so inflation metrics the PPI was at minus 3% expectations were for minus 3.2 the CPI was a plus 2.5% reading year in year which was in line so the general headlines reading that China's factory gate prices falling for a fifth straight month in June so as I said down 3% although signs of a pickup in some parts of the sector suggesting a slow economic recovery remained somewhat intact as you can see here the CPI number, albeit in line when you break it down to its components high pork price inflation continues it was up about 82% there's been other things that have impeded just generally the food component of inflation serious floods occurred in many places in mainland China the coronavirus cluster in Beijing's biggest wholesale food market a few weeks ago slower hog production as they still tried to get over the swine flu situation there was creating lots of culling of pigs as well in the country as kept that number elevated in particular but again for the morning open in Europe if you're trading the regular kind of asset classes it's not really too much of a consideration it's just a point of note in regard to that inflation metric a few other things I wanted to run through then quite an interesting note from Goldman Sachs telling investors to prepare for volatility around the November US election okay, yeah that makes sense that's not that surprising but the details were that the coronavirus is going to add what they call major complications to basically the tabulating results with a recommendation then to extend hedges out to December expiration so what they're suggesting is it's not just a one and done moment of volatility to peak in November then actually you should hedge and cover yourself for a period of volatility over until the end of the year now the reason for this is they're saying that given the several week delay in finalizing results that were seen in 2000 presidential election there was also a case study back in 1876 when a similar type of thing happened where basically there was a very protracted long period of time for them to finalize results and the elevated volumes of mail-in ballots used in recent primary elections now why is that? Well, behavioral changes but also COVID-19 is probably going to increase that and there's a potential for increased mail-in ballots then for this November's US election which could see heightened risk of election-related volatility that could extend beyond then actually election day covered probabilities according to Goldman's calculations have equal 62% for Biden to win 61% for the Senate and 85% for the House in terms of the Democrats compared with 43% for the White House 30% for the Senate and 61% for the House in regards to what was seen in late February so again remember when it comes to US politics if you're not familiar with it it's not just about who wins the presidency it's about the composition of Congress that being the House and the Senate and whether or not then you get a blue wave would be Democrats in control of both chambers of Congress and the White House or a red wave would be the complete opposite which would be Donald Trump winning the re-election and the Republicans retaining the Senate and winning the back of the House that would be slightly positive for stocks according to UBS, their strategists they also noted, I've got a few notes here that an interesting question is if Trump loses is that immediately bad? Well, it does also depend on the composition as I said of the chambers Democrats would focus on economic growth so it's not like the Democrats would be bad for what has been the perceived kind of Trump pump for markets Republicans they would probably focus more on the extension of tax cuts both then forces are net positive for kind of supporting economic recovery and therefore you would think in this sense keeping this equity kind of rally alive the status quo of a Trump victory with the Senate under Republican control and the House in Democratic hands that would probably be largely neutral because it ultimately leaves us in exactly the same situation of where we are at the moment a Biden victory with a Republican Senate majority would be neutral to slightly negative as expected increase in regulation might hurt growth but there likely would be constraints on tax heights so again, regulation is quite a key thing where the sides of the political spectrum see slightly differently and that could have repercussions so yeah, quite an interesting piece I've tweeted it from the Amplify Twitter account so if you're interested in taking a look it's worth a read and on that front there was another bank that came out overnight which again I thought was quite interesting and again, just giving you an overall summary but I have shared this on Twitter as well but JP Morgan, one of their head guys was talking about the fact that the S&P 500 could easily reclaim a record so Sam North, you're gonna owe me some money for talking your book but he's basically talking and if I just highlight the main crux of what he said he said that, and don't forget we've got earnings season coming up in North America soon in only a few weeks and it's gonna be pretty horrific but the point here is that while profit expectations have obviously been dampened due to the pandemic and the S&P 500's price to earnings ratios are at 20 year high and just given these somewhat stretch multiples given how high the equity market is comparative to the underlying economic situation JP suggests that equities look cheap relative to bonds amid the economic stimulus and that could in itself encourage money managers such as pension funds to shift asset allocations from fixed income to stocks that could help prop things up there's an interesting point that he does make and there's a bit at the end which I thought was particularly interesting so here, looking at specific sectors is very important if you are looking at kind of stock selection and the uncertainty of the economic and political outlook has driven traders as we know into large cap tech names and as you've seen, they've become an increasing influential factor given that what the top five tech firms pretty much dominate now about a quarter of the S&P 500 so here then, tech mega caps are in favor but banks and energy stocks are not and that's because of their general sensitivity to any implications for a slowdown in growth and also they're just a very low interest rate environment that we're in as well squeezing margins for big banks so tech stocks though, how much of that as well as a reflection of behavioral change the ongoing demand and that's one thing that JP also add is that managers are buying these mega cap tech and momentum stocks while shorting smaller cyclical and value stocks and that's something which you've probably read as well about Warren Buffett very infamous and long term successful fund manager has really been struggling in this environment because it's kind of counterintuitive to his approach which has been highly successful for a very long period of time. This trade is in part driven by market expectations that COVID-19 pandemic is to worsen or not get better at least and lead to permanent shifts in the economy. However, they do know that while we think this is not properly pricing either of these events repricing of which could result in a rapid momentum sell off and a value rally so worth keeping that in mind but again, quite an interesting piece and kind of it's interesting these sell side institutions I mean, if you remember in the briefings I was delivering just a month ago they were also bearish and now seemingly they've all flipped and becoming more bullish at this point. So you've got to take what you read from these guys with a bit of a pinch of salt but if you're to determine the overall kind of a kind of herd view as a mass market which is what you're as an individual trying to do to capture these underlying trends in markets then you've got to listen to a variety of these banks to get the general assessment for what the coordinated view is that's shared among market participants at this present point in time. The final few headlines this was one I saw Australia warns citizens not to travel to Hong Kong over the security law Canberra suspends extradition treaty and eases migration access for city residents so this isn't that surprising it's been something similar we've had in other countries like the UK for example however, what we have seen is whenever Australia has tried to become a little bit tough with China China have responded in quite a forceful manner that can have immediate and direct implications for all the export of goods for Australia and given that we know that China is such a important trade partner of Australia every time that they've come out and started saying about we're not going to buy certain products agriculture or more hard kind of physical commodities from your country that's had a meaningful impact on the Aussie dollar so worth keeping an eye on this from the point of view that it would not surprise me to see China come out with some type of retaliation against Australia they've done this multiple times before in the last 12 months whenever Australia is trying to get tough and so that could then mean from a fundamental headline perspective the Aussie could be subject to some headline volatility if that was to occur the final story, just so you're aware because I'm filming this ahead of the cash equity open if you actually look on the scoreboard of pre-market activity you'll see the largest cap name one of the largest companies in Europe SAP they're up about 3% a stark outperformer ahead of the open in Germany and that's because an update last night S&P said its business activities gradually improved in the second quarter from the effects of the global lockdown with revenues operating profit edging up and they confirm their full year outlook now they are a punchy company within terms of market capitalization in Germany so worth bearing that in mind Canada wise for today it is very quiet this morning not too much in a way of real significant scheduled events you've got this afternoon usual focus then on the initial jobless claims they expect it now we've kind of had this massive pop that we saw in the end of March, early April when it was kind of north of six and a half million and we've seen this decreasing scale we've kind of leveled off now at around just over one million marker and so expectations today for 1.375 million a range of 1.2 to 1.9 is this going to move the market probably not would be my initial assessment at this point in time but it definitely warrants just keeping an eye on otherwise it's a fairly quiet day you've got a longer dated bond auction in a 30 year bond for 19 billion coming out of the US Treasury this evening but I would say, as I've said all week it's a fairly quiet calendar all things being equal so again there's some key technical levels that we're trading near term in most of the products but particularly as in what we looked at in the NASDAQ the Euro on that R1 cable looking to push up to a similar type level T-notes oil are pretty uninteresting right now and have been fairly quiet at this point but again I'd be looking to base all of the decision making on that upon the broader sentiment analysis on the cross-asset class movement today and looking at the technicals with perhaps a little greater importance and normal given the distinct lack of fundamental catalyst at least at this point in time alright that is it I'm going to wish you guys a good day again drop me a message on the video with your email if you'd like the recording if you missed the webinar last night on risk management and I will gladly forward that onto you but have a good day ahead and I'll see you again same time tomorrow alright, take care guys