 Good morning. Welcome to CMC Markets on Friday the 12th of April and this quick look ahead at the week beginning The 15th of April the time is 10 at 25 on Friday the 12th, and it's been a fairly Unremarkable week for global equity markets we haven't seen much in the way of downside after a very decent start to April and This is despite a very fairly dovish ECB rate meeting and EU's Brexit summit Which should give us a little bit of a respite from the black hole of the Brexit news cycle and Fed minutes there hasn't really been a significant catalyst one way the other to really drive Significant downside in the recent gains that we've seen thus far in global equity markets We've seen a bit of a mixed bag of data out of China This week we've so we've seen exports show a significant improvement for March In the latest Chinese trade numbers with a rise of 14.2 percent came in well above expectations as 6.5 So that would appear to suggest that despite the IMF downgrade in global growth forecasts that we've seen this week The economic activity is still fair It's it's still it's still ticking along at a fairly decent rate or be it on the back of much lower Expectations I think what was more disappointing from the Chinese data point of view was the fact that imports declined 7.6 percent for the second month in a row and that would appear to suggest that internal demand Remains weak and with that in mind as in the upcoming week We've got first-quarter China GDP That's expected to come in around about 6.3 percent But in light of those China trade numbers in the import numbers I'll be paying particular attention to the retail sales numbers for March and industrial production numbers because I think we could get a little bit of a rebound After the China after the Chinese Lunar New Year holiday What's giving me a little bit of pause on that is the weak import data that we saw for March and that could weigh On retail sales because retail sales are expected to improve from 8.2 to 8.4 percent If they disappoint then that could raise concerns that the Chinese domestic economy is weak at the same time as global demand is Starting to pick up a little bit after a little bit of a slowdown at the beginning of the year And that's likely to affect the direction of the FTSE 100 and we can see that in this daily chart here On a technical basis the uptrend remains solidly intact the 50-day moving average is crossing above the 200-day moving average Which is fairly positive and a more broader level We've seen here from the May peaks a year ago the all-time peaks of a year ago around about 7903 to the lows that we saw at the end of December We've just broken above the 61.8 Fibonacci retracement level of that entire down move That is now acting as support 7,360 7,380 key support in terms of further gains for the FTSE 100 Could retest the highs that we saw on the 9th of April at seven thousand four hundred and eighty That remains the next resistance level on the FTSE 100 if we transpose that on to The the DAX because look at the S&P in a minute We look at the DAX. It's a similar sort of story if we look at the daily chart here We're pushing back above towards that 12,000 level the previous peaks around about 12,024 We also have also seen a little bit of a decent rebound from the peaks In May last year But we haven't as yet got near to the trend line and also the 50 and 200 day moving average are also slightly further apart But they are closing Which suggests that any dips are likely to find support around about these lows here of the 9th 10th of April around about 11,800 So keep an eye on that despite the fact that we remain in a fairly overbought position on the oscillator It's the trend that is important Not what the oscillator is doing and I think while we remain above these lows around about 11,800 Then momentum is likely to remain positive S&P 500 similar sort of story looking forward to US earnings season and the start of it We've got JP Morgan and Wells Fargo's numbers coming out later this afternoon And while JP Morgan's numbers are likely to be slightly disappointing in terms of a downward Cycle in terms of earnings growth I'll be paying particular attention to Wells Fargo's numbers and particularly the domestic economy Domestic loan growth business loan growth and obviously Mortgages as well the US housing market has been in the doldrums for the last 12 months is retail spending holding up It certainly doesn't look like it if retail sales numbers have been any guide And we've got US retail sales out on the 18th of March for March Sorry, US retails for March out on the 18th of April and they're likely to be a key arbiter of US consumer domestic spending So the S&P 500 2900 the all-time highs are over here around about 2920 and the September levels that we saw back there Brexit slightly to be a little bit of a sideshow now the Tarticle 50 has been extended to October And it will make a change to be talking about something other than Brexit though talks are likely to continue With respect to trying to get an agreement across the line before the European elections on May the 22nd That seems unlikely. So what's going to drive the cable? It's going to really be wages Brexit headlines Brexit news cycles probably going to be quiet and down a bit What's worrying me about the cable though is the fact that every subsequent rebound off this very big support level at 12960 is getting shallower So we've got a rebound here back to 134 Rebound here back to 132 rebound here back to 131 80 and at the moment. We're trading sideways in a corridor between 131 80 and one than 130 the worry is that the lack of momentum will prompt a test of the downside so Looking for wages to maintain to be maintained at 10 year highs of 3.4 Against the backdrop of a tight labor market with unemployment around about 3.9 percent. We could see an uptick in inflationary pressures For March we did see an uptick in February as price rises starts energy price rises starts a filter Into the headline numbers and we've also got retail sales for March as well And they're likely to have dropped off quite a bit ahead of that 29th of March initial Brexit deadline, which obviously subsequently got Berm pushed forward to April the 12th Now that that's been pushed out to October we could see a bit of a pickup in April retail sales as Consumers book their summer holidays and unlock a little bit of latent spending that they didn't do in the March numbers We've also got retail sales for Canada as well as Canada CPI on the 17th of 18th of April as well It's also a fairly decent week another another big week for earnings We've got Goldman Sachs and city groups numbers for first quarter in the wake of the JP Morgan and Wells Fargo numbers later today And again The main focus I think for me given the lack of volatility that we've seen in the first quarter Given the flattening and subsequent inversion of the US yield curve is how much damage has this done to Bank earnings for the first quarter and in the context of Goldman Sachs and City group I'll be paying particular attention to that given the Fed's dovish pivot at the end of last year and the the flattening of the yield curve Also be paying particular attention to Netflix. It's always a bit of a perennial favorite is old Netflix given recent Decisions by Apple to launch a streaming service and now Disney Disney plus are launching a streaming service in November Will these new services Impact on a Netflix's position as number one streaming service Certainly the share price does appear to have plateaued in the last two or three months But I would argue that these two These sort of late to the party newcomers of Apple and Disney will have to go some to out Netflix Netflix and its most recent quarter Netflix reported revenue of four point one nine billion dollars total subscribers increased by eight point a million to one hundred and thirty nine point two six million Which was an increase of twenty twenty nine million subscribers from a year ago Netflix has just increased its prices. It may find its ability to do so constrained by these newcomers to the streaming environment or the streaming landscape and That could be I think the key the key arbiter as to whether or not we retest the highs of September last year Profits are expected to come in around about fifty eight cents a share So the big concern I would have in terms of new subscribers is is Netflix suffering as a result of the fact that These new streaming services might start to impact the rate at it adds new subscribers So that's it for this week. Once again, thank you very much for listening to Michael Houston talking to you from CMC market