 Good morning and welcome to the week ahead video with me David Madden. Today's date is Friday the 25th of October 2019 and the time has just gone 1140 British summer time and look ahead to next week Which is Monday the 28th of October on to Friday the 1st of November If we're gonna take a look at what's going on in the last two sessions It's very clear that the big issues of Brexit and US China trade have been very much in play So the move this this week in relation to Brexit as obviously be dragging on A lot of the gains that were made recently on the hopes that some sort of deal Will be approved and get passed Are still largely there we saw during the week how boss Johnson essentially got you know approval in principle for The deal that he brokered with the European Union, but Things didn't go according to plan for Boris after per our prime minister Johnson as MPs them effective voted down They can a shortened timeline that mr. Johnson was looking to actually get it all things wrapped up by so the still talk All the of an election I referred from the EU this morning. They are going to be having a meeting in relation to the granting an extension You know, it's economically advantageous for both sides to avoid a no deal Brexit So it's probably likely that the European Union will grant an extension Also in relation to British politics. We heard yesterday The Prime Minister Johnson set out his plans to hold a general election on the 12th of December Not long after those plans were set out the leader of the opposition. Mr. Jeremy Corbyn Quickly said he would not support a general election unless Mr. Johnson took the option of no deal off the table and let's face it Boris Johnson is highly unlikely to Take to remove the no the option from the table So we could be kind of in this kind of Brexit limbo or as I wrote on a morning note The UK could be the departure lounge of the EU for some time That's been going on and it's just because of the almost kind of fatigue We have seen a bit of a weakness in European equity markets today But keep in mind I will be taking a look at some of the big markets But keep in mind we know a lot of the gains that have been made in the last 10 days have largely been obtained Turning our attention to the US China trade situation We heard yesterday from China who said that they're willing to buy 20 billion dollars worth of US agricultural goods at year One should the US sign up for a partial trade trade trade deal phase one of it Relation to Mr. Pence the vice president of the US. He was speaking about China yesterday and he said that If the if China can drop their kind of unfair quote, you know, quote-unquote unfair Treatment of the US relations trade. They could then like to begin a new trading relationship Mr. Pence also kind of called out China's Criticized China's behavior in relation to the handy of Hong Kong. So he's firm enough on China By the same time he also said he doesn't he doesn't want the US to decouple from China So as far as Mr. Pence goes, it was one of his probably was one of his more kind of measured updates But you know, taking a firm line by the same time he's showing He's showing that he is what wanting to get progress the relationship and essentially while the language is somewhat Constructive and considerate I suspect, you know equity markets in the US are gonna hang around these levels And we're probably not gonna have any kind of major sharp move to the downside at least driven by the US China trade relationship the earnings story could be something very different Turning our attention to next week. What's it like out for next week in relation to the Big issues of next week. The US back in the next week is the going to be the non-farm payrolls The last month's payrolls figures Word were overly overall reasonably good But given that we've seen some kind of weakness in the public opponent Absolutely kind of the recent ISM reports We could see a softer We could see a lower towards 100,000 or maybe some 100,000 in terms of the headline figure bearing in mind last month last month's report showed that on a yearly basis average earnings in the US Cooled from 3.2% to 2.9% which is a cut to be above inflation So workers are getting a real a real increase in wages, but at the same time It's it is a bit worrying because you know when workers earn more than tend to spend more Also in relation to to next week. We have huge third quarter US GDP and we also have a Interest rate decision from the Fed of Reserve. So In relation to the in relation to the growth figure That's obviously gonna be can be closely watched as is the update from the from the Fed of Reserve in recent weeks, you know, we have heard a lot of a lot of a Lot of kind of moving away From chatter about the possibility of the Fed cutting rates I you know my view is that all employment in the US is at a 50 year low Granted ways are coming down a bit, but they're still well above inflation So I think, you know, we have you've had a couple of interest rate cuts in the last number of months Do we really need a third in fairly quick succession? Looking out ahead to next week also what do you have to watch out for we have the manufacturing PMR reports Coming off for me about the final manufacturing reports coming off in a number of countries This week we saw the flash report from Germany and from France now there were particularly impressive that the French one was showing Minimal growth the German one showed a slight improvement from the dreadful figures of the previous month, which were a 10 year low That's how that's going to be very much in focus Also, it was worth keeping eye on the we got a couple of interest rate A couple of center bank meeting next week as well in addition to the Fed We have the Bank of Japan or the Bank of Canada in relation to earnings. We've third quarter figures from HSBC Keep in mind this week we've heard only the last week for the likes of Barquese and Roebuck in Scotland have fairly sizable Writedowns and approbations in relation to this setting of PPI so keep an eye for that in relation to HSBC Also HSBC driver a lot of their funds from the Far East so the situation in Hong Kong or the general economic cooling of mainland China Could impact their business BP have third quarter numbers out That's obviously going to be focused. It must have been going on in the oil market recently We have third quarter figures from Lloyd's as I mentioned keep an eye on Lloyd's as I mentioned in relation to this setting of PPI That's likely to come back and hold Lloyd's because they've been there the worst the worst culprit for it and in terms of kind of you know big Big US companies to discuss a fourth quarter figures from Apple and third quarter figures from Facebook What I'll do now is take a quick look at some of the major markets and see how things are performed I mentioned at the very beginning of this video how we you know We were a bit lower today as far as European equity markets are looking at but by and large the gains We've racked up most that you know at the last week or so have been very much have largely been maintained So I'm taking a look at the price action on the footsteps under it here We've been pressing we've been pushing higher since the at the beginning of the month We're back above the treaty moving average the spread line here, which comes into play at 72 73 We're back above that. We're not too far away from this yellow line here They want to move the average fact is acting kind of as resistant at the moment and that comes into play in around 7335 and if you do have a break above that it could take us back up towards this zone here in a 7,440 or perhaps up to 7,470 so that's all up Around kind of 74 40 74 70 could be the next area of resistance to keep an eye for If in their hands the market does manage to turn over itself So what could be found from this blue line here the fifth of the moving average at 7,235 Notice how it nicely acted at resistance on a few occasions not a lot ago So it could be and if a metric has been important in the past It makes it more likely it will be so in the future although there are no guard eats But even still a bit below it could find support from the kind of 72 the zone 7,000 to two of the zone down around here I take a look at what's going on and the tax and the tax is in better shape than its British counterpart So as only yesterday we are level on the tax last seen In June last year so really give indication if I'm bullish things are going in the tax But so the trains the wider trend has been very much to the upside currently training in around 1150 if you drive on higher from here We could be looking at targeting the biggest psychological Number of 13,000 and if you go beyond that similar in around again at 13,200 could then be targeted But whatever is ever so slightly concerning as that but first of all the rate at which the market rose between Early October and now it's fairly steep So maybe we could see a bit of a bit of a slow down in the rate at which is increasing Not say that a massive, you know turn around, but we could see a slow down in the get upward trajectory But it's what is slightly concerning is that first of all the kind of the long wick on this camp here So this then also small bit of a decision, you know, you would really be looking to Base your trading idea solely on that but if you take a look at the MACD indicator the MACD histogram down here We can see that it's been actually cooling off and tapering off ever so slightly all the while the market itself is pushing higher And we have that kind of diversity between the two Where the the actual markets pushing higher, but yet it's pushing higher on a smaller increases We're seeing a slight decline in the positive momentum. It could be a sign that we The buyers who are still in control could be running a little bit of steam and we could see a bit of a pullback So we might love to kind of head back down towards this is all down around here 12,660 or 12,600 be something consolidation in those areas before so we could see them again in the near term Take a look now at what's going on over on the S&P 500 the big US market US markets are in very good shape in comparison to the European equivalents Take a look here from August onwards. You've seen a lovely series of the lows have all been higher So I love you see series of higher lows You know we're expecting that up the S&P 500 to open north of 3,000 You know volatility has been low But we're still very much in the upper trend if you depress on higher from here We could really try getting the recent highs in September of 2022 I think I'll be on that the old-time eyes of say in around 3,000 because a 28 that could be could be a could be on the horizon, but similar though to the What we saw the DAX The markets are pushing higher, but we're seeing a cooling off in positive momentum So it could be a bit of a sign that we might be due for a bit of a pullback And that should that be the case you could be lucky any back down towards this song down around here 2,970 or perhaps this blue line here the 50 moving average which acted nicely a support and resistance Not an hour ago. I like comes to the play And that price comes to the play in 2005 257 and lastly we talk about the British pound We'll have a look at the pound versus the US dollar So obviously all this talk of either be between both Johnson's getting a deal that's tired of an extension If you saw a major move to the upside recently in the British pound sterling against US dollar hit a level It believes a five-month high I never last seen in May. So things are looking really bullish Above the tour to move the average, but it's a bit concerning that the market has actually moved up at this rate We could see a bit of a pullback The market seems to be turning, you know, I couldn't really get a decent move Apologies couldn't get ready a decent move north of the one spot 30 zone So we are seeing a better move to the downside Pals of momentum is a is a is a is a decline We could see the market drift back towards this red line here the turn of the moving average in at one spot 27s 15 or even out towards kind of 126 zone But they've got a wider theme is to very much a play and a break a solid break a decent break north of one spot 30 Could take us up towards the April highs of one spot 31 78 Well, thank you for listening and please tune in next week. Thank you very much. I've been Dave Madden