 Good morning and welcome to CMC markets on Friday the 15th of February in this quick look at the week ahead beginning the 18th of February Before we start on the new week Let's have a quick look back at the week just gone and it's been a fairly resilient week for Global equity markets despite I think a raft of disappointing economic numbers as well as rising uncertainty around the prospects for a resolution to the US China trades back The likely outcome from the talks looks like it would appear to be a memorandum of understanding between China and the US which would outline Further areas for discussion with a view to that being ratified Along with an extension to the march the first Deadline for a potential increase in tariffs in order to create a framework for further discussion in the coming weeks so these trade talks are likely to continue maybe into next week and Over the course of the next few weeks and months as a potential fudge to avoid a further escalation what we've also seen this week is Some fairly disappointing economic data, but rather perversely. I think that's probably acting as a little bit of support for equity markets because what it means is that ultimately central banks will put on the back burner any further Any further sort items to Titan monetary policy Going forward and instead probably lean more to the dovish side and with that in with that in mind We've got the s and p 500 Fine managing to flirt with the 200 day moving average Struggling to really move above it Which does make us susceptible to a drift back down to 2700 But ultimately there is also a larger resistance Through these peaks here around about 28 20, which was a highs in october or november last year So we are still finding support at progressively higher levels. We've got a a tweezer top at 2762 on the daily charts, which we really need to get through to push up to 20 000 to 2800 We've also seen that additional chinese stimulus is already starting to show up in some areas of the chinese economy While here in europe the debate is shifting back to what extra measures the ecb can unlock In the face of declining economic activity If we look at the latest gdp numbers out of germany Germany narrowly avoided a recession in the second half of last year with q4 gdp coming in at zero percent Which which follows on the back of a 0.2 percent contraction in q3 So economic activity in germany remains a very very weak pmi data that we've seen so far in january continues to Support the fact that that we're seeing very little evidence of a rebound In economic activity, which means that this week's flash pmi numbers For february are likely to be fairly instructive in terms of whether or not We're going to see a february bounce the ecb has been calling for A rebound in economic activity and been saying that the slowdown has been temporary for over a year now And thus far we're still seeing no signs of any sort of pickup in economic activity despite The ecb continuing to hang its hat on the fact that we will see a pickup as we head into q1 So Another weak number here for france and germany we saw some very weak services numbers as well because of the yellow vest protests in france They're likely to continue to act as a bit of a drag and the flash pmi's which are due out on the 21st Will either support that synopsis or they will show some signs of a little bit of a february pickup I'm looking at the dax. It's managing to hold above this 11 000 level. We did briefly Push below it, but we've managed to rebound back above it But ultimately this price action doesn't look particularly supportive of a strong rebound We do need to see a move back above the highs of this week And the highs of the week before to look at retesting this downtrend line here It's a similar sort of story on the footsie footsie is slightly better in terms of being fairly well supported We've managed to consolidate Back above this series of peaks through here around about 71 80 71 90 Currently above 7 200 But it's interesting to note. We are still below the 200 day moving average Which currently comes in around about 7 300. So that's still a very big level On the daily charts, which we need to get back above To signal that this uptrend that we've been seeing in place since the middle of december is likely to continue Another thing to keep an eye out for this week is the latest fed minutes These could offer additional insight into a federal reserve which has undergone a significant vault face In the last couple of months. I mean if you we we only have to look back at december To see that we got a very very hawkish Fed and the recent decision in january was a significant about turn And while it had been widely signalled by various policy makers the contrast in stone the contrast in tone Excuse me was still very surprising because not only did us policy makers signal A lot more caution They also went as far as signal They might well be done in terms of the recent rate hiking cycle As well as being more flexible when it comes to balance sheet reduction That tone or that change in tone makes an awful lot more sense When you look at those us retail sales numbers that we saw This week a decline of 1.2 in december is the worst monthly fall since 2009 in a decade And maybe the u.s economy is not looking as robust Perhaps as people perhaps thought that it might be and this was before the u.s Government shutdown So if december has posted a contraction of 1.2 What does that mean for the january numbers when they come out? It's a significant wake-up call for us investors as to the resilience or the robustness Of the u.s economy wage growth still remains fairly solid as the payrolls growth But it seems to me that the u.s consumer is starting to rain back its spending and that could be significant for us gdp Going forward What else have we got for the coming week or the pound has looked on continued to remain fairly weak despite the fact that economic data by and large While not ripping up any trees Still continues to remain more positive than negative the u.s the economy Continues to outperform its european peers the pound continues to remain weakened when you look at the politics in west minster It's not really hard to see why sham bollock doesn't even begin to describe it that being said We've got the latest wages and unemployment data for the three months to december coming out on the 19th And they are likely to remain fairly positive One of the things i would say is that we've heard an awful lot in the mainstream media about job losses And an economic slowdown thus far They haven't shown up in the unemployment rate numbers. That doesn't mean that they won't but certainly in terms of wage growth That still remains fairly resilient at 3.2 percent, which means in real terms uk consumers are actually undergoing a little bit of a boost in terms of weak inflation And fairly positive wages and that probably accounts for the big jump that we saw in retail sales in january of 1 percent which beat expectations of a 0.2 percent rise So there are grounds for optimism if we can just get past this brexit ferago We've also got the latest results from Lloyd's bank and barclays coming on the back of some decent rbs results today if we look at the chart for Lloyd's banking group we can see that It's one of it's the main uk bank that ultimately i think is most exposed to the brexit dynamic We have seen a decent rebound from the lows that we saw at the end of last year and about 50p But we really need to push beyond 60p I think in terms of all the all the uk banks It's probably the most underpriced if we could get brexit out of the way with a satisfactory outcome The potential upside for Lloyd's is probably quite significant And we've also got barclays as well Activist Investor Edward Branson is on Jez Staley's case with respect to Hiving off the investment banking division Which perversely actually posted some decent numbers in the first half of this year But if we look at the chart on barclays here, we can see that still very much in a downtrend line If I can actually draw the line correctly still very much in a downtrend and As such, I think we really do need to see some decent numbers from both Lloyd's And barclays to signal further gains for both of these stocks Other items to keep an eye out for we've got results from Wreckett Ben Kaiser A four-year results on the 18th. We've got Walmart's Q4 results cheesecake factory And drop box. So that's it for this week. Thank you very much for listening Michael Houston talking to you from CMC Markets