 Good morning and welcome to CMC Markets on Friday the 26th of April and this quicker look at the week beginning the 29th of April And once again, it's been a fairly positive week for equity markets We've made new multi-month peaks and while the FTSE 100 is underperformed I think largely on the back of a slightly lower oil price Nonetheless, it's been a fairly decent week for global equity markets with the FTSE 100 hitting its highest levels since September and October of last year the S&P 500 doing the same But it does appear to be some evidence that maybe we could well be about to hit a short-term pause In the upcoming moves or in the up move that we've seen since the beginning of the year I think it's more prevalent in the context of the FTSE 100 which has come off quite significantly from the peaks of earlier this week We've got a bearish key day reversal on the Wednesday We're starting to drift lower, but as long as we stay above 7380 and This trend line support from the lows then the uptrend is likely to remain intact But there does appear to be some early signs of trend exhaustion in the FTSE 100 that aren't apparent more broadly in the German DAX or the S&P 500 now these are the markets that I'm going to be looking at for the upcoming week I'm going to be looking at the S&P 500 now and what's been notable Despite the fact that we made a record close this week for the S&P is we weren't able to take over We weren't able to take out the previous peaks in September and October and until we are until we're able to do so I think there is a risk that we could drift back towards the 2900 level and potentially look back down towards 2850 however if we're able to push above 2940 2945 Then we could well be on course to test that 3000 level but while we're below these peaks here There is a risk of a little bit of a sell-off back towards 2900 in the short term We've also seen oil prices top out And I think these will be relevant in the context of the overall up move that we've seen over the course of the last Few weeks if we look at the daily chart here We can see that the 50 day moving average is starting to cross above the 200 day moving average We're not there yet, but we are seeing a little bit of a sell-off a potential doji star reversal there on the daily A bit of a pull back down, but we need to get below 7250 To really I think signal further declines back towards $68 a barrel And I think the oil price is going to be a key arbiter of some key earnings announcements that are out later this week But before we get to that Let's look at the macro economic picture and the macro economic data that we've got you out in the course of the next few days we're going to start off with the latest Fed rate decision and The decision by the Federal Reserve at the beginning of this year to dial back aggressively on its hawkish rhetoric at the end of last year Which it came under a fair amount of criticism for from President Trump and his chief economic advisor Larry Kudlow As well as other US administration officials now the fact that the Fed's called a halt to its rate hiking cycle Hasn't really cut much ice with the US president who's still been very vocal in his criticism of it That being said a number of his advisors have even gone as far to call for rate cuts Now I don't think that is likely there is still a 50% probability or the markets are pricing in a 50% probability That we could get a rate cut by the end of the year That that could that could still take place, but at the moment it's highly unlikely We're going to get another rate hike this year, and I think that's the key thing Despite the fact the feds dialed back on its hawkish rhetoric the US dollar has continued to push higher But I think that's more been a symptom of Weakness on the part of other currencies than any inherent dollar strength And that was born out by a video that I posted earlier this week with respect to euro dollar I think we're likely going to see further dollar strength against the euro because of the key technical breakout that we've seen in Euro dollar of 111 80 the 112 area and I've covered that in more detail in another video So I won't reiterate those comments here, but ultimately There is suspective of what the Federal Reserve says later this week I think it's highly unlikely that the dollar will weaken Significantly even if the Fed is over overly dovish because there is another side to this picture and that other side is Euro weakness. We've also got the US payrolls numbers Which are due out on Friday a normal service was resumed there in March after the surprise of a low February reading of 33,000 Again of 196,000 new jobs saw the unemployment rate four to three point eight Though wage growth did cool a little bit, and I think it could be wage growth that could more than anything Influence where the dollar goes to over the course of the next few days and weeks We're expecting wages to tick slightly higher to three point three percent Lightly to remain in the Goldilocks range for US payrolls expecting a number in and around 185 190 and it's also a big week for global manufacturing PMIs as well. We have a Bank of England rate decision I'm not really going to go into too much Detail with respect to that suffice to say the pound is suffering on the back of that has slipped below 130 Could well head back Towards 128 over the course of the next few days Particularly if the Bank of England is overly dovish in its outlook when it comes to looking at the economic outlook for the UK economy Which still remains fairly subdued given the fact that the Brexit can has been kicked out to Halloween Pretty scary thought I think not but what is it's not an ideal outcome It's highly unlikely the Bank of England is going to be hawkish against an uncertain political backdrop So moving on to the earnings announcements, and it's going to be a big week for big oil Royal Dutch Shell we're going to start with that look at the chart for For here, and we can see that with respect to Royal Dutch Shell We've seen a fairly decent Rally in the Share price for Royal Dutch Shell But what we haven't really seen is a significant push higher back to the highs that we saw last year now earlier this week French oil company Total saw profits fall 4% Largely down to the fact that average crude prices of $63 a barrel were a little bit lower than they were in the fourth quarter of Last year but more importantly I was higher debt costs and lower natural gas prices and I think that could feed in to disappointment over the Direction to travel for Royal Dutch Shells and BPs numbers BP is out on the 1st of May Royal Dutch Shell is out on the 2nd of May And I think more more a case is more a case of BP is going to be Some disappointment because of the fact that BP has high debt levels now Total cited a rise in debt servicing costs as well as lower natural gas prices for Its reduction in for in first quarter profits now BP obviously has very high debt costs It has total debt levels of forty four point one billion dollars So we could well see that impact on BP's numbers and we have seen a little bit of a pullback in BP's share price here The the pullback in oil prices may well be reflected in BP's numbers as well as a lower natural gas prices so in terms of the share price movement in In Royal Dutch Shell as well as BP We could well see a little bit of weakness in the context of these numbers despite the fact that production output for both Was at fairly elevated levels when it reported its Q4 numbers a few weeks ago We've also got the numbers for Lloyd's banking group and here once again. We've seen a fairly Weak performance this week in the wake of some fairly indifferent numbers from RBS and Barclays But nonetheless despite the fact there have been concerns about the slowdown in the UK economy We have seen a fairly decent out performance over the course of the last six months But we could be on the cusp of a little bit of a pullback if Lloyd's numbers disappoint given their exposure to the UK economy given the probability That mortgage demand has probably been weak in the first quarter, but there is decent support around about 61p So we've seen a little bit of a fall back over the course of the last week or so We could see further weakness In the run-up to the numbers which are due out on the 2nd of May solid support in and around about 61p On that particular chart there It's also another big week for us earnings and we can see that in the context of apple share price here Some decent numbers You know what's not to say about apple that hasn't already been said the company is a cash machine when it comes to selling its products However, it's now going into streaming services and looking to take on the likes of netflix amazon as well as disney I think the big question is how much money is it going to Spend on taking on these competitors. It certainly has much deeper pockets than its rivals However, it's core business still remains handset sales hardware Even q1's downgraded forecast still showed revenues of 84.3 billion dollars Despite weaker demand for its high phones Of course, it doesn't Provide a breakdown of handset and tablet sales now. So it's becoming much harder to detect whether the sales growth sales growth in this market Is has peaked and is now and is now on a sustained move lower so Services are going to be a much greater proportion of its Income and the big question here. I think is whether or not it'll be able to take up a significant amount of slack When apple plus is added in the in the autumn So keep an eye on assets Keep an eye on These particular numbers in the context of whether or not it can continue Or recover to become a trillion dollar company a share price above 207 Puts it in the trillion dollar market cap bracket Last but not least looking at alphabet google's share price if we look at this one here just quickly look at There we can see once again very Decent performance so far this year has outperformed the rest of the broader market Interestingly hasn't taken out the previous highs of july and august last year So revenues of 39.27 billion dollars at the end of last year An increase in costs has caused the share price to slip back But we have seen a bit of a recovery in the first part of this year Will they be able to deliver on the cloud services and be able to fend off amazon's growth in this particular area The q1 update is due on the 29th of april and that should give us a much better picture Of how google is doing as well as obviously its other bets It did have a stake in lift and it also has another significant stakes and other startups Which may or may not be making money at this point in time So those are the products that i'll be looking at this week. Thanks very much for listening Michael hueson talking to you from cmc markets