 Okay, very good morning to everyone. It is Monday the 23rd of March. I hope you have had The best weekend that you can being somewhat self-contained at home but as you can see back online as per normal and everything set up now kind of an Office away from the office if you like so Amplify will be able to continue to do Everything as per normal at this point. So the briefings will continue as well So thank you to everyone with the comments on YouTube last week. We managed to hit now I think we're at 10,000 and 200 subscribers now. So it's amazing. We've broken that 10k threshold We've had over a million views now on these briefings. So I guess first and foremost just a thank you for me and all the team Everyone who puts effort into these broadcasts and the content. I hope it continues to be useful to you At this point in time obviously Sam is not here with me But what he's going to do is he's going to publish some charts into trading live for our guys our traders But also he'll publish some of his kind of trade setups on on his Twitter account. So s north 19 do check that out Otherwise, let's get straight into it. I'm going to focus on the news predominantly And I'll leave those Levels for Sam to share on social media But having a quick look at the actual charts this morning What have we got on the agenda for the week and again another risk off start to proceedings US index futures off at the get-go the reopening of trade on globe X and the media kind of limit down in that respect We have come off that level But we still remain down multiple percentage points at the moment You can see the Dow future in the center chart here is still down about 840 points at last check the DAX Did start actually more negative than where it is at the moment It did see this center left chart here a gap fill As really of the early birds in Europe were coming into the market But since then has faded slightly and without about 400 so another week start to equities as you would imagine then in that kind of Classical move in the correlations T notes up over a full point already Getting close to retesting what was then the the overnight electronic opening high here Just as we go into the European session gold top right It's off a little bit from where it was trading, but we're still hugging the pivot level At the moment we're up about seven dollars. So lower equities higher gold and fixed income WTI crude Is kind of flat lining for the moment It did look a little hairy at the open this morning in terms of retesting the downside levels where we flirted close to Obviously 20 bucks at the end of last week. We got down to an overnight Session low 2080 before we've had a bit of a bounce, but we'll have a look at all again in a moment Well, let's just get straight into it. So why this risk off kind of tone to markets Let me just switch over my screens and and have a look at a few different things then first of all Obviously, although we have a normal economic calendar this week and there are a few things definitely to keep an eye on Overall market sentiment still derived from the updates that we're seeing in relation to the coronavirus Global cases now as you can see there on the top left at nearly a 340,000 deaths now coming up to 15,000 What I did is I do publish a piece that I call the macro menu on a Sunday it's I share it on my Twitter and also I'll send this out to all the guys on Sunday and This was a summary and I'll quickly run through it of generally the status of Globally of where we're at at these major kind of popular centers, particularly in the Western world But we're also going to talk about India this morning because that's also going to be a real Potential hotspot at hotspot going forward in the coming weeks Italy cases now Around the 60,000 mark the death toll now is almost double that of what's being seen in mainland China in Italy Italy have now stopped people moving from one municipality to another unless it's super urgent They've also find 11,000 people as part of their lockdown and not having permissions to be able to move around they find 11,000 people on One day on Saturday over this weekend and as we're going to have a look at in a second could be a sign of things to come in the UK If the PM announces that in the next couple of hours Spain what I've got here are the kind of numbers in terms of total confirmed cases and then the actual death toll So Spain's up to around the 30,000 mark deaths around 2000 They've they're going to extend their current lockdown for another fork night Germany is going to ban gatherings of more than two people I'm not really sure how they're going to go about enforcing that But that's what the headlines were suggesting on the lights of the FT in the BBC last night France the lockdowns to last another two weeks Main cases of course in terms of the the number of cases being confirmed is in is in Paris Pretty similar then to what we're seeing in America where confirmed cases nationwide are 30,000 But it's all kind of concentrated in the state of New York and specifically New York City New York City is Reported to be 10 days away from seeing widespread Supply shortages according to the mayor yesterday New York as a hot spot is about 15 times more cases than the rest of United States of America Again, just given how how populous that particular region is and the city of course in the UK We're going to discuss that in a second. So I'll get round to it But a couple of of things to be aware of here on this front because we're going to broaden the net outside of Europe in America And this is a country which hasn't really had Too much mention really because cases have been actually pretty low in India But India is the second largest populous country on the planet after of course China Population-wise India comes in about 1.3 billion So if you think about it think about you know, if you have been to India What you know of it in terms of the kind of mass density of the populations in in cities like Delhi or Mumbai for example The types of food standards and hygiene kind of similar issue to what we're talking about with the original Outbreak that we saw in Wuhan for example in the Hubei province in China now here overnight basically the Indian Rupee fell 10 percent a few other stats here. So the Rupee is now trading as lowest level on record The virus they're saying according to the Indian Council for medical research is basically saying That the virus could spread to as much as 10 percent of the Indian 1.3 billion population you know so The reason why this is all broken out and stocks have slumped overnight is because India too now Is looking to stop millions of infections by going into into lockdown So that that was that was India definitely having some impact there But in the UK this came out yesterday. So the Prime Minister continuing to give lots of updates every single day and Prime Minister was threatening a UK lockdown as the public has ignored Virus warnings now what that's referring to. I'm not sure where you're where you're based But if you're in the UK, I know for one having just gone out to get some fresh air when I mean where I live There are parts where there's not too many people around. So the order at the moment is it's fine to go out It's just not it's not Preferred that you go into any areas where you can be in close proximity to other people and particularly mass gatherings But what you saw on Twitter or if you read Kind of local media is people in London. We're just going about their business as completely as normal. I saw shots of Market stalls opening and kind of packed masses in East London The National Trust which if you're not familiar with the UK if you're based in the States basically is where we have kind of Historical places of interest and basically National Trust in order to help people who are confined it at home An ability to be able to go out and explore You know these these sites they basically opened them up for free and what happened was there was a mass wave At the National Trust and it was just packed at some of these sites but obviously this goes completely against what the government are wanting which is no kind of mass gatherings and so on Reading through this then a couple of things I think it's not a matter of if but when and I think it will be today that the UK government is going to step up It's kind of severity of its lockdown in a similar fashion to say Paris for example And what that means then is that probably the army troops which have been stationed in parts of London will be deployed in order to keep civil rest within the Within the city in regards to protecting things like hospitals supermarkets main infrastructure So people can continue going about their business So yeah, that's the the UK they're going to fast-track emergency powers through Parliament probably going to happen later today the latest studies one I read this morning by medical professionals But also in combination with UCL and Cambridge University have basically said that given the way that this has played out so far Particularly again in the hotspots hotspot that is London. They said that cases Could reach about 35,000 to 70,000 excess deaths over the next year To again just put some some context into what we're talking about here. So this is a this is a necessity at this point Nearly every other country in mainland Europe has already taken these steps so far So the PM is going to be under increasing pressure one thing though that I thought was Quite interesting from the data. This is a graphic here where you're looking at the the kind of trajectory of the number of confirmed cases that we've been seeing or in this case the death toll and What you can see here is countries like Japan the Philippines South Korea, which obviously numbers were initially very high With most of those you can see the the curve is fairly flat or fairly shallow And a lot of that is a reflection I guess you know having had lots of family and so on that live in the far east myself that their ability to Have or deploy early and large-scale testing Tracing helped authorities get the a outbreak under control the kind of response as well Just generally if you go to places like Hong Kong people are very much used to dealing with using Kind of face masks and things like that when they've got a cold or they're ill So the measures kicked in a lot earlier, and I think generally society is a lot more reactive Because of it's it's a fairly regular part of life. Whereas in mainland Europe It's very unusual obviously to go into these types of things as well like a lockdown that now is being implemented it's very difficult for citizens in these types of societies to react in that way and The interesting thing here is France what would be seven days ago now that I was when Macron outlined these really quite quite strict rules about them People who could move around of what reason if by far the most strict across Europe however That has paid dividend because one of the things that I was looking at here is that Italy and Spain and the UK have had more deaths at this point IE the number of days since the 10th death they've had more deaths in Italy Spain and the UK Than what China had at the same stage now albeit. I know people will say well We don't really believe the Chinese numbers, but just looking at those stats France is particularly interesting because one of the things I was looking at when I was doing my research on Friday Was that France is now substantially lower than its neighbouring countries Italy and Spain And I do think that that is a reflection of the fact that they've taken very Proactive and high level and very quick to to put into place measures And so this is why I think the UK is gonna gonna follow suit the main point though on this chart from a trading perspective And I do think this is really important because I'm getting a lot of questions to me about When are we gonna hit this ultimate kind of what's the key indicator where we're gonna hit the bottom? because a lot of people obviously now looking at value at these levels of can I enter now equities at a good position to get long again for the Inevitable kind of move back up towards all-time highs again or oils quite suppressed in terms of historical prices Is now a good time to buy well I'd say probably the key signal to look at is not maybe so much the Kind of macroeconomic data although that will be important actually I think looking at trajectory of these numbers particularly in Italy and Spain is going to be very important the UK as well There are three that I'll be looking at so every day today when we get these updated Figures you'd be looking to plot them then to see when are we nearing a peak and I don't think we need to hit the peak It just needs to be becoming more shallow and so even before we get to that point of ultimate peak I think the markets will already take that as a signal that perhaps then is getting under control But in reality this might not happen for another few weeks And that means then that markets will continue to remain very sensitive and generally on the balance quite fragile In that in the risk of further downside a few other things to run through them At the moment if you remember this time a week ago It was when we had the first empirical evidence of the impact that the corona virus had on the Chinese economy If you remember we had that fixed asset investment retail sales unemployment rate industrial production, and they will basically just Tanked they there was the first sign that we saw of what is going to be a significant impact on their economy, but at this point we haven't really had too much in a similar vein for the rest of the world, but that's going to change because this week we have in Europe a number of things coming out and Well, let's jump to here first and then we'll go back to that other chart So this is the calendar of kind of European events for the week. So today you've got Euro area consumer confidence Probably the most important in terms of this type of data. You've got the preliminary PMI the purchase and managers index So those numbers are coming out for Germany France the Euro area these are the flash readings Then you also get the UK flash PMI and factory orders as well Then then confidence figures both business and consumer coming out across mainland Europe Wednesday through Friday So this is going to be the first time when we get to see just generally what is the sentiment? What is the impact that this is having at this point in time? We know it's bad the question is how bad at this point and we're going to look at a few different things for one This is looking at what analysts are having to do now an economist is reshape their expectations about the kind of future and This is looking at Really two things the Euro area composite PMI so the average for the Euro zone is that this is going to dip below 40 Now if you remember Germany was the worst and Germany was in a real Difficult state going into before the virus hit remember it was deeply in contraction in this manufacturing activity in its PMI readings This being kind of a triple threat of tariffs coming from the US and its protectionist policies You've got kind of the domestic classical uncertainties with the CDU and CSU and Angela Merkel and you've got Brexit something Which obviously is completely forgotten at the moment, but these three things already put Germany on the back foot now You're going to have the the virus take impact as well So remember 50 in the PMIs is key For being an expansion or contraction territory as far as that reading is concerned as a diffusion index And so here you're looking at the first time we're going to go into contraction since really 2012 in the depths of the sovereign crisis and that's not only going to go negative It's going to go to the pretty much the worst numbers that we've seen since the severity of the global financial crisis With that then let's move over to the US because in the US there's been some pretty interesting Comments out of various big banks and I'm going to start with Morgan Stanley Morgan Stanley sees US economy plunging 30% in Q2 now. I must stress. This is probably the most bearish of what I've seen JP more or Bank of America are looking for minus 12% JP Morgan looking for minus 14% GS are looking for minus 24% MS are out there now looking for a deep deep US recession They also see unemployment averaging 12.8% in the second quarter as well with that being said then let's look at Goldman Sachs, they're looking for 24% given the coronavirus pandemic Which would be two and a half times bigger than any decline in history if that was to materialize now to look at that graphically This is what Goldman's released And they're expecting a near 10% peak hit to the level of GDP in April that Fades only gradually and I think this is quite an important thing here Because people were looking at you know if you look at this chart forget the the data look at the shape of the bars Here you've got an immediate down tick and then you've got this quite drawn out Kind of center to right curve now remember what a lot of people were saying only about three or four weeks ago So we're gonna have this v-shaped recovery. Well, if you look at what we've got here We've definitely got the first forming of the V, but it's not really a V It's more like a a sharp move down and a very Gradual and if you actually look here, it's gonna take many many months before we get somewhere back to normality And if GDP does dip that aggressive Then you're looking at basically a period of perhaps 12 18 months before we really start to get back to where we were again And so that probably a reflection though of really when you do read the data and the medical kind of research that when this virus is probably going to be much more at the point of Very contained at that point where we've seen the way over the worst of it But this is going to be always slower probably recovery than some people might have imagined before From a from a US point of view then with the GDP is as I said the Q2 forecast I mean JP Morgan Looking at minus 14%. I mean, this is just to put it as in context This goes back on the chart on the index from left to right from the 1950s all the way up to where we are in 2020 so you can see the worst GDP print we had in the global financial crisis of 2008 9 we got down to a GDP of about negative 9% if you go back to that then you go back to the early 80s We had about a similar print and if you go back to the late 50s We actually saw a minus 10. So if you look, you know, this really is One of the most depressed Periods potentially of US growth in the history of the country for sure If not as the numbers were saying it's a record in fact two and a half times bigger than the biggest decline in history Bit of context So here that this is one piece of data a lot of people have been talking about every Thursday We get the initial jobless claims continuing claims the initial unemployment claims This is GS Goldman Sachs projection for it says next week, but this is now this week and this really is quite incredible They're expecting Initial jobless claims could spike to a record two point two five million That forecast would mark an eight-fold increase and more than triple the record set in 1982 if that were to happen This is as companies in America have already started huge layoffs to get ahead of them The cost pressures they're gonna feel with the severe economic downturn that we've just been discussing With a lot of this though, I mean this is being banded about as has quite, you know Quite a scary figure, but I do think quite a lot of this has been priced in now I mean Goldman's released this note on Friday We've had the gap down. I mean if the number and you know the bars been set now The numbers out there people are expecting a two and a quarter million jobless print, which is you know We normally average about 200k on an average basis. So it's a monster number But at the end of the day, we're now expecting that to some degree So I'm not sure it's going to be this massive fanfare that people are expecting other than it It's going to be a dominant headline for news agencies to run its market implications I think don't really change the narrative a great deal, you know now we're expecting these these massive Impact to growth obviously unemployment is gonna gonna spike higher and so I don't think it's going to be the most Surprising thing if that does materialize or be it it will be historic if that does turn out to be the case This was another thing. I wanted to mention. What are the Fed saying and generally the Fed voters have been quite quiet But we have her from James Bullard. He is a non-voting member in 2020 But he does tend to be quite vocal so perhaps a bit of an insight as to what they're thinking However, he is the most kind of I would say outlandish in his views. He really doesn't hold back He really says what's on his mind and he does tend to be a bit outlying in his views if there was a center ground more Kind of akin to Powell's View on things Bullard's probably the most furthest removed I would say and the fact that he's not a voter tends to Accentuate then what he tends to say but to give you a bit of a an update he's Suggesting that US unemployment could hit 30% in queue to and that GDP could fall 50% So he's just Taking it what we've discussed and just ratcheting up a few notches. Yeah, 50% GDP hit he's what he reckons now. I think he's way too bearish personally But we need to monitor the developments, you know I'd say between Italy Spain the UK and America it's it's really key and actually if we jump back I didn't even really mention the states too much on the numbers front American has over 30,000 confirmed cases and I don't know if you read it, but Again more stringent Measures are being looked at to be put into place in America to contain this virus a lot of talk as well And this is kind of one thing that I've been tweeting about quite a lot is although we've seen A lot of people talking about the muscle memory of governments and central banks kicking in from the global financial crisis So, you know one thing that's very different from when I was an analyst when that was happening Was that everything was kind of new in the policies they were unveiling? You know zero interest rate policy Quantitative easing these were all new packages Which now you just need to basically turn the printer back on move the rate handle back to zero It's not it's not unusual anymore. So they've been quick to respond governments have been quicker to put out their fiscal Promises like we saw a large scale in the UK From the chancellor last week America now has gone from one to talks of two trillion dollar stimulus package And it's these sorts of things that I think will continue to go up and up and up in terms of these numbers I saw a really good graphic of Rushi Sunak the chance in the UK from when he released the budget and the amount he's put towards stimulating economies as a coronavirus Has basically gone like like this to like that to like that to like that And I would expect that number to probably get even bigger and the same case in America As the the situation gets much worse, but yeah, Bullard One interesting thing he did say was and this is what I'm more interested when I when I look at someone like his comments Is well what what are these other options that the Fed can do? We know they've restarted their QE program for 700 billion. We know rates are back to basically zero What what where else can they? Maneuver their policy if they needed to to get more Response in markets and he said commercial paper funding should support should provide support for Corporations trying to roll over short-term debt and he also said the Fed could look at buying other Corporate debt as well. So I guess it's about using some of the existing facilities tweaking them in certain ways particularly of corporations I think that's quite key In order to support what could then lead or you could try to mitigate this mass unemployment situation by again giving companies short-term Facilities to have liquidity and to have access to credit But then also with the actual central bank in itself buying corporate bonds in order to support them as well Could be another quite effective way of doing that. The final thing I'm going to mention is New Zealand They've turned to quantitative easing. You've probably read this now They're going to buy up to 17 billion QE dollars about 17 billion US dollars would now translate to of government bonds in the secondary market Over the next 12 months and again the reiteration of whatever it takes from there from their governor Final thing I want to have a look at let's just quickly switch over to the charts I'm just going to have a quick look at oil and then the S&P and then I'll wrap things up But this is WTI crude and you can see we've had a bit of a gap lower at the initial reopening of trade in the overnight session that was the initial dip when US equity futures got halted limit down and then we had Close to a retest down to that 20 level which we printed back on the 18th at the end of last week We have recovered a little bit and we started to consolidate around That kind of area here, which is the 2239 we briefly tested that for Europe came in this morning But looking on a much bigger picture this was a graphic that I shared in my kind of look ahead for the for the week in the macro menu and You know, one of the things that we had last week was Well, really if I put a bigger rectangle is this move here and WTI crude, I know this looks quite small, but this is one of the biggest rallies We've had in a single day in history of crude futures and that came if you remember after President Trump was talking about intervening in the Russian Saudi Situation it was also talking about buying a large amount of crude oil to help to stockpile in the DSPR and all of that led to that a big surge in prices after we were at very depressed levels However, you know, when I delivered the briefing on Friday I was talking about the idea and I think the point here still remains is that as much as the US might look to try to intervene I really don't think and I have not read anything over the weekend to change my mind that the biggest core problem here for prices is the fallout between Saudi Arabia and Russia until those two can come to some kind of agreement and Have some deal in order to coordinate a cut to global supply I still remain bearish on crude oil prices You know the situation ultimately with the coronavirus is going to get worse in terms of numbers They're for economically more impactful. So that's going to hamper demand Still further to what I think has been priced at this point and then you overlay that with This ongoing battle for market share by flooding the market I think it's a perfect cocktail for prices to move south and We're holding up at the moment and you can see why we're holding up I mean if you go, you know, that was that that level of where we we hit the low yesterday We've come all the way back up to there. I'm looking at a monthly Candlesticks now to try and bring into context a little bit of recent moves So you can see here the global financial crisis I mean, wow what a move that was we went from like north of 140 down to Basically 30 bucks Then we had the OPEC attempt to try and kill the US share industry and kicking off in November 2014 When they looked to flood the market and the fears of the Chinese hard landing That was this big episode and then we've had the coronavirus pandemic Which is where we are at the moment now here. We briefly bloke broke below it we got to around that $20 handle before but The number I've been looking at is $16 70 which would bring in the initial aftermath in the week post the 9-11 attacks that we had in 2001 that's that low there and that rectangle anything below there, you know It sounds crazy, but you start talking about numbers like $10 35 Which would have been the OPEC kind of crisis in the late 90s Type price level. I think you know, let's leave that for the moment the first target here I think that people will be looking at on the longer higher time frame will be 1670 I do think that 20 is going to give way at some point in the coming days or weeks From an S&P 500 perspective as I said, Sam's going to share some of his charts In the chat and online on Twitter and so on but this was looking at the S&P on a much longer time frame I know it's a bit small to look at but I wanted to really encapsulate some of the price activity going back to 2013-14 because this area of consolidation now is really what we've got to be watching for key levels on the downside as you can see you've got a Gap down again in the overnight session that's brought us back in towards this kind of range here Which was the peak of price activity? Just before the US election then Trump obviously had the dip and then the rally came back to around that same level in November of 16 before then kind of The Trump stimulus Trump flation kind of kicked in But then beyond that point you start looking at that kind of band of price movement We've obviously got that low on the night of the US election That would be the most lowest bound at 2028 and a half in the S&P So again, these would be levels really to watch through the week as a whole and then kind of scaling down using that price movement from 2016 and ultimately further down into 2016-15 Would be key levels. So, you know as crazy as it sounds when you start talking about these levels You know, this is the way markets have been moving into where we are from the record all-time high only a few weeks ago We're still down 35% If we were to get down to 2000 that would be about 41 42% if we got down to that That low seen in beginning of 2016 that would be close to 50 percent reversal from that high And yeah, I still think there's some downside to come in US equities I guess it depends on how far probably the area Where I'd feel most comfortable really is around that 2000 that 2028 Which was that US election dip low and that 2000 psychological level I think is not off the table at all at this point Given that these cases are still rising at the moment and measures are still to really kick in at a more stronger level on the lockdown in places like America in the UK Quick look at the calendar So back back to This is that macro menu where I talk about my views and some of the things we discussed here But this is the includes a calendar. So as I said, it's gonna be interesting You get the preliminary PMIs coming out the Eurozone first thing tomorrow morning. So be be Aware of that. You also get the US numbers coming out that afternoon as well You do still have a Bank of England rate decision as far as I'm aware. It's still a schedule for Thursday They've already obviously made their move restarting QE rates down to point one But I guess this is more of an update on what is their latest thinking at this point in time Not expecting too much from that. They've really showed their hand and their commitment now to do whatever it takes And then you've got industrial profits, perhaps on Friday from from China could be quite interesting But overall just check that out when you get a second and then the final thing I wanted to mention was if you scroll up to the top and I'll put a link to this is a picture of me and Sam In in the old days in the office, I'd say But he will be joining me because we will be doing this So we're gonna use zoom. I'm sure some of you have used zoom video technology before But at 1 p.m. London time this afternoon. It's an open invitation. So whether you're a trader whether you're a student It's gonna be a couple of hours where I'm gonna give you a rundown ahead of the the open of US trade For stocks and then basically it's gonna include me the head of trading Pierce Curran He's gonna talk a little bit about how he traded through 2008 2009. Is it similar? Is it different? If so, how so he's gonna do a bit of a talk on that Will Deleuzee who's our managing director is gonna talk about Trading psychology and mindset Sam's gonna talk about technical analysis and how he sets up his trades each day from an intraday perspective And then Eddie Donmez who's one of my colleagues. He's gonna talk a little bit more about Individual equity sectors and how do you position yourselves from a slightly longer time frame if you're looking at portfolio managing or Having a basket of kind of Single-stop picks and so on so it's gonna be a good session We're all involved and everyone's free to join. So here's a registration link I will be sharing that and I'll put it in the The video Description so make sure you have to register your details and then you'll be given all of the relevant information But hopefully I'll see you online a bit later on for that. So that is it as I said No real charts for me from a technical perspective. They'll get shared shortly by Sam, but I wish you a good week ahead I hope that you remain safe and sound the same to you your friends and family and colleagues And then we'll be here every morning as per normal any questions. Just leave a comment. Let me know All right guys. Have a good day. I'll see you later. Thanks very much