 Very good morning. It is Thursday the 3rd of June. I hope you're doing well and Great for those who joined us last night for the latest masterclass And if you're not aware of what that is It's basically when I get people from industry from a variety of different positions And they come in and speak to the community about their area of specialism But about the their background the way they look at markets So do feel free to check that out at amplifier live comm otherwise in terms of the briefing this morning Certainly we can have a look at the meme stocks a couple of the crypto currencies All of which have been moving with some degree of uniformity yesterday as we saw delights at amc seeing some ridiculous gains So I have a quick review of that and then we'll look at the broader asset classes Which we're looking at here of which an overall sentiment perspective relatively quiet here at the open Stock index futures and t-notes pretty flat But starting to see a little bit of an uptick in the dollar It's a quite large fluctuations in fact in the green back yesterday initially surging out of the gate and then reversing course throughout the European afternoon to finish pretty much square and so some reflective quite seesaw price activity in Eurodollar and cable from yesterday as you can see by that kind of v-shape here in the top left Charts however as Europe has come in this morning The dollars just picked up a little bit of pace training up just shy of two tenths of one percent in the Dixie Just weighing a touch on the precious metal space gold and silver looking a little more heavy this morning Otherwise WCI crude is the other key one It continues to hold on to some of its relative gains up about 45 cents And we'll have a look at those charts again in a moment So let's just delve straight into the closing Wall Street last night and a fairly very benign close in fact We only finished up roughly around point one to point two percent across the major three US indices and relatively quiet in follow-through in the Asia Pacific session overnight but One of the companies and just have a look at some of the single stock stuff to start with on the heat map yesterday It was quite interesting because kind of more cyclical based Areas were outperforming so energy real estate financials all outperformed Tesla was a quite a key under performer So let's start there and then we'll talk about some of these other meaningful individual single stock movers and the reason why I was just looking at Tesla is Finding a bit of support around a fairly significant key technical area of support You can see this kind of these two lines here around six hundred dollars a share providing a bit of a floor-to-price yesterday That's been a meaningful area kind of in inflection point for the stock price to react to on prior occasions So be interested to see how they perform They did finish down they underperformed the market as I said the broader indices finished up marginally Tesla was actually down about three percent yesterday their reports from Credit Suisse about the company's market share declining and also Report coming out the Wall Street Journal talking about Elon Musk was warned Twice about his tweeting activity Last year by the authorities and so the market share thing I wouldn't put too much weight in Most analysts are of the belief that you know given the current period of the reopening that we're in Looking at market share volatility and fluctuation month to month It's probably more erratic now given the situation that we're confronting at the moment in time But nonetheless quite a key technical area here on Tesla might be worth keeping an eye on going forward Otherwise. Yeah, let's just flip over to the meme stocks. Eddie and I did a did a good Converse or had a good conversation yesterday, which you can access on the Amphi trading YouTube channel If you just look for the ANC pump Explained and you'll be able to get a bit more rationale behind it But without going too much in the details This is looking at the the kind of meme stocks so AMC the black line Which is a spectacular outperformer and then GameStop bed bath and beyond and some of the other names as well but at one point yesterday GameStop shares were up a hundred and twenty seven percent They closed up 92 percent total gains for the year now at 3,000 percent at one point and that does mean then I thought this was quite a somewhat ridiculous chart to put it in a bit of context in terms of what that means for the market cap of AMC it's roughly About the same size as Delta Airlines or Tyson Foods if you're aware of those companies in the US Which puts it pretty much as a median that market cap of your average S&P 500 company so it's gone from best basically here a median market cap of a Russell stock Prior to 2021 to then now cutting the mustard in the main S&P 500 But of course I say this in jest because this is not going to last at this point so Yeah, pretty crazy Actually, there was one Interesting index that I thought I wasn't aware of and I'm not sure if you could openly track this But I was looking at something called the index That Goldman Sachs runs that basically tracks changes in the shares of companies most frequently mentioned on the kind of reddit Wall Street Bets page and their index was up more than 25 percent yesterday And it's up 60 percent over the course of the past two weeks, but I guess Really, I mean that's kind of main Wall Street trying to kind of conceptualize what's going on reddit. I mean you could just read reddit I mean, I don't think you really need too much Percentage index derived figures to then ascertain how much it's getting mentioned at that point in time But nonetheless, I thought it's quite interesting Otherwise in terms of overnight in Asia A few things to be aware of one was the Chinese Cation Services PMI did slow down a touch But still for firm expansionary territory 55.1 against 56.2 Not looking for any reaction this morning though to seep into European markets didn't really even impact the domestic scene overnight And then US President Biden is to amend former President Trump's blacklist to target key industries There's likely to sign an order this week that intends to crack down on investment in Chinese defense And surveillance technology sectors according to sources as a report released overnight So again, I don't expect that to have too much of an impact at the open here if anything at all But one of the things that it does show is that as we've been discussing of late the Biden administrative stance on China is going to remain pretty firm at this point and as we've said Piers and I and I think of last week's podcast There's definitely agenda priorities here for Biden of which our feelings are that it's going to be much more domestic focused as we go Into the kind of midterms in a year's time and how it's going to be more about getting the US back on his feet people back employed and so that means that China's kind of kept at arms length and the risk I guess the tail risk for markets is a mismanagement of that kind of Keeping that dialogue open But also keeping the pressure on because obviously this is a political point as well that he'll want to bring back home in terms of the stance against China So it's a fairly delicate situation But what's happening right now and further kind of blacklisting if you like of defense and surveillance technology sectors in China Is kind of I guess just Continuation of the general approach that's been happening. So I don't find it too unnerving at this point And it does run alongside ongoing dialogue. So Yeah, not too much To look at right now, but again, so to be to be mindful of The other thing that came out last night and it's something which I wanted to cover because some of you might not even be aware of this stuff But you know outside of normal monetary policy tools if you like whether they be traditional like rates Unconventional like QE I know QE gets all the talking Kind of spotlight if you like because of the fact that we're getting close to the discussion about tapering and so on And that's the sequencing of policy kind of normalization But there were a whole batch of liquidity mechanisms that were put into place to avoid then any Or to allow the system to function through that difficult period of adjustment when we went through initial pandemic phase and One of the things that came out last night was that is this article here It's basically saying the Fed will begin to unwind the corporate bond holdings that it acquired Last year through an emergency lending facility launched to calm the credit markets of the height of the pandemic The Fed set the sale of the holdings in the secondary market corporate credit facility So this is remember there's all these acronyms I think there was 11 or 14 in total of different liquidity inducing kind of programs But the SM CCF which includes corporate bonds purchase in the secondary market and Strangetraded funds that invest in corporate bonds would be gradually and orderly in terms of Again the sale of those holdings the question here then well how much have they got to sell and actually it's very small The point being is that this facility was Hardly used if you remember Many months ago I had a graphic of all these facilities And it was kind of like this is how much they've been willing to do and this is how much it's actually been used And it was a fractional amount, you know, this is one thing that definitely I recognize going back to The European sobbing crisis if you remember those who were trading then it was that fateful day when Super Mario came out and basically said we will do whatever it takes and mark my words You know, he means that that's what he kind of said at the time and I remember there was Liquidity related mechanisms that were put in place then which were never actually used So as his words with putting forward these programs Was trying to then instill Confidence credibility that in fact the central bank would follow through with that commitment to do whatever it takes It was kind of the same with the Fed It's this over You know kind of delivery of all of these these measures that will be taken to safeguard the system So then the market actually never even needs to use them Confidence is already Reinstilled and the market starts to recover and that was largely the same case with a lot of these liquidity programs given the How quickly the pandemic kind of struck the market and could have been a tangible risk, of course to liquidity So in actual amounts the facility had 13.8 billion of loans outstanding 8.6 billion of corporate bond ETF holdings at about 5.2 billion of corporate bonds that need to be kind of unwound The Fed intends to sell the full portfolio by the end of the year So to me that's of no real impact to the market. I mean, that's a Incredibly small readjustment at that point It will start selling its ETF soon and begin off loading as corporate bond holdings later in the summer But again, as I said in summary, I don't really see this having much of an impact But again, it does mark the first road to the Fed gearing itself up to the readjustment of some degree of normality and Stepping off some of these programs of which is to be expected I would say this isn't anywhere near as big as the idea about tapering and those types of more Directly active things that people are looking at in the market The other thing then is the oil infantry's last night and we did have a fairly sizable drawdown actually so You know just more ammunition's on the headline for the bulls at the moment as we Continue the the past towards 70 bucks in front month the crew in futures Cushing though was a billed as was gasoline at two and a half million, but let's have a look at the oil chart and You know, this is a picture from from really last week to where we're at at the moment We've continued this move higher. I did also read this morning that as far as Iran talks have been adjourned until the 10th So about another seven days time Much of the commentary coming out of both sides of the negotiating table is still that there's a lot of work to be done So as we've been emphasizing before I wouldn't be expecting any deal to be broken anytime soon and consequently then the return of supply Not happening as quickly as perhaps people were thinking a few weeks ago when oil was was moving a little lower at the time So that's kind of positive further reopening positive data that comes out It's going to be more positive on the demand side keeping on on going back scene situation as well and also with some of that emerging market risk Particularly India you will recognize this really not in the headlines a great deal after it was really dominating things two weeks ago Such as the media's intention to report only bad news the point being the cases have been declining So it's no longer something the editors want to run, but that's a positive sign You know that they're kind of over the hump in that respect will be it. There's some regions Singapore Malaysia these other areas that still need monitoring at this point in time But things still remaining pretty bullish for oil We also had the OPEC meeting as well earlier this week and they kind of just stuck to their guns And you know, we've been looking at this for a for a while We still see kind of 70 bucks as the next obvious target and seemingly we're on that On that on our way at this point in time ready around 75 cents short of that psychological kind of marker Once we get to 70 bucks given the fact that we have risen if you're looking here on a daily chart fairly consistently through the breakthrough of that previous year to date high to trade at this highest level since 2018 I wouldn't be surprised to see a bit of a hiatus profit-taking and therefore pullback and some consolidation after hitting that target Not unless we got something new in terms of the news Sphere coming out to really move things in either direction While we're here before we look at the calendar a quick look across these charts then as I said bit of a dollar pickup as European players have come back in I think really too much of a great deal of interest. I'm looking at here in the euro for the time being On this decline. We've had a bit of a top Eeked out late in the US session and during Asia Pacific hours We're back below pivot and 122 handle this morning if we move any lower Perhaps that kind of previous area here comes into play Which would be 121 88 and then below there that that lower kind of rectangle. I've got marked up Which would be the low from where we had 19th retest 21st did break through it momentarily on 28th last Friday And then we bounced off there in yesterday's session. So Euro again levels. I'll be looking at for cable Yeah, I did see a couple of big banks come out and try to explain the sell-off in cable that we've had materialized over the previous 48 hours And and I don't want to get into that game of trying to curve fit Then a narrative to the sell-off because ultimately the dollars kind of flip-flopped And I don't think there is any real fundamental change of catalyst to create that movement It's just happening and I think you've just got to trade what you see in in that respect, but I Think here a couple of things that were were interesting on the reversal on the pickup that we saw As the dollar faded those gains yesterday afternoon night nice Kind of technical response to the 50% fib from that relative high to low from earlier this week With also the daily pivot level on the futures and that acted as a nice cat for price And now we started to drift back down lower We've just broken back below pivot this morning So technically quite interesting that was an area that was holding on the retest after we broke high yesterday afternoon Was a previous area of support as well as some prior occasions So music to keep to keep an eye on probably take that off And so therefore on the downside not a great deal of support here till we get back down to yesterday's low Overall again fundamentally, I don't really see a lot going on here in terms of sterling in the UK perspective Either from COVID lockdown or the Bank of England So I'd be looking at relative kind of ranges here and so Perhaps not that much interest until we get a bit lower down for me personally Otherwise a bit of dollar pickup has just weighed a little bit on the precious metals as I said earlier at the beginning of the briefing And that has just led to initial test on that low point That was quite key area for gold. I was just talking about that very early before I started the briefing in the community And this was that that level around 1903 it's been quite key for near-term price action You can see we tapped on it a few times yesterday for the eventual break higher came back tested it Tested it again this morning and the break down you can see markets traded heavy straight down to the S1 at the $1,900 handle here next level on the downside Be keeping an eye beyond that point of the handle at 1896 Spot seven which would be the lower bound of the price activity that was seen in today yesterday Silver likewise below pivot following suit and just declining at the moment amidst some of these recent moves Equity indices not really going to comment on not a great deal of interest going on there So let's move straight on to the calendar and look to wrap things up. So calendar wise We've already got all the overnight stuff So then the service PMI numbers coming out later on this morning from Europe in the UK These are final readings are not anticipating much in a way of a market reaction to that Very much a US centric session one things yesterday was despite some of the FX fluctuations Yesterday was very quiet because the calendar really had no major things going on today's a little bit different It's definitely a US focus. We've got really three major readings coming out ADP national employment Which will act no doubt as still despite its Inability to really accurately predict the jobs report we saw last month People will still look to it for guidance for how we might perform on the jobs data tomorrow That's expected at 650 from previous 7 4 2 So that's at 115 followed 15 minutes after by initial jobless claims Which is expected to show further improvements to 390,000 from 406 that positive trend continuing and then we get the ISM services PMI which Last time showed actually a very strong employment constituent the pace of job creation quickened to the highest Level since September of 2018 in the service figure last month We are expecting a continuation of a fairly solid number at 63 Here's what the data kind of looks like for the ISM non-manufacturing PMI so 63's puts us up here And this is very reflective. This is kind of March April and obviously may we'll see today of this period of because of the speed of vaccinations in the US Allowing further Reopenings and that should definitely feed through one would imagine into the service sector kind of figure Other than that you get the oil infantry's remember a slightly later time of 4 p.m. So the regular 330 and this is always the case when it's delayed a day due to the Memorial Day holidays in the US on Monday Speaker wise Feds Bostick the early voting member speaking at 5 30 and then Kaplan Harker Non-voter speaking later on. In fact, you do you have Quals speaking as well at 8 p.m. This evening Banking there's Bailey speaks at an IMF event on the financial sector We've kind of heard from Bailey a lot in recent weeks So I'm not expecting too much there to be quite honest, but it's 5 p.m And then supply out of Spain France and a three 10 year note and 30 year bond auction Announcement coming out in terms of the sizes from the US Treasury at 4 p.m. So that is it That should wrap again feel free to contact me either In the discord room. I'll see you're getting this early It's going out after 7 a.m. If you're watching this delayed on YouTube Feel free to leave a comment remember to like and subscribe on the channel And don't forget you can access this particular briefing early for free amplify live.com All right with that have a good day guys. See you tomorrow