 Okay, very good morning. It is Wednesday the 3rd of November and the day has arrived after months of communication about this taper word We're gonna get the formal announcement highly anticipated from the Fed this evening to mark that We will be covering myself the event live right here on the Amplify me YouTube channels So if you're not already subscribed hit that subscribe button click the bell to be notified when we go live 15 minutes before the statement and remember that's a 6 p.m. London time because of the clock change here in London and not in The US until this weekend. So don't be caught off guard with that for sure So we're going to talk a little bit about the Fed I'm not going to go into a great detail on this briefing because I'll cover that extensively later on today We're going to talk a little bit about the house stocks finished in the US how they performed overnight Some new concerns about China about downward pressures and their economy and the new covid outbreaks they're seeing across several provinces at the moment Actually now the worst cases that we've seen since really the outbreak in Wuhan back in 2020 And then we'll also talk about the dutch government reinstating some covid rules here in mainland europe There's an update on brexit legality around the northern island protocol And then we'll look at some of the other calendar events to be aware of for today's session as well So as we always do a quick look at the general Lay of the land and actually as you can see here equity markets once again Striking fresh record highs looking at the nasdaq future here The s&p and the nasdaq both notched record closing highs for a fourth straight session yesterday The s&p was up and the dow both four tenths of one percent pretty uniform finishes actually the nasdaq s&p Dow all up between point three and point four percent But having a look here on the daily continuation chart The one that you're very familiar with now. We've been in this Kind of trend channel going back to q4 of last year and we continue to respect that general Range as we grind away to the upside and for the futures market at least With the high print at 15 978 next psychological stop given no technical Relevance going backward looking giving this is untouched uncharted territory now 16 000 looms here for the the nasdaq as far as the s&p is concerned. It's a pretty similar story Up and around those record high levels the nasdaq of course The big mega cap stocks like tesla for example Despite then you know must questioning the validity of the actual contract signing of that tesla 4.2 billion dollar deal did little to really dampen the optimism in the car maker They were down yesterday underperform the market by about Three percent or so but don't forget they were up eight and a half or so They before and they're up over 30 percent over the course of the last three trading sessions. So Yeah, really not a lot to pull back on the tesla Skyrocket at the moment. Otherwise elsewhere currency markets not too much going on but you would expect that going into the Fed announcement and that's really Echoed across the other charts more broadly Gold down a touch but pretty sideways for a majority of the recent few hours of trade down six dollars T notes just perking up a little bit up towards the higher end of the range that we saw from Yesterday's session. So up about four and a half ticks WTI crude sounds like a fed meaningful decline From the overnight session down about a dollar and a half You could tie that to a little bit of the chinese story and narrative that i'm going to talk about in a moment Which does question the economic story at the moment in china just given some of the The general concerns that they're seeing whether it's in the property market You know a lot of the the government crackdown that are happening across different sectors the covid outbreak And so on so forth. So I don't want to tie too much to that because as you can see here You know, if you just come out of the microscope for a second and look at this chart over the course of the last month or so We're generally trading A range between really 81 and 85 on the upside and we're kind of mid of that range at the moment So, yeah, even though we're down a dollar and a half trading 82 and a half at the moment I don't really see too much behind that Never forgetting we've got the opet meeting as well coming on thursday But that's unlike these are yield much in the way of surprises as they continue to just drip feed in that supply The 400 000 per day kind of agreement that they've already predetermined Um, all right, so um quick look then at the equity market and A little bit about the fed, I guess Um, this is a bloomberg article. They put together ahead of every big Central bank decision. It's called their decision decision day guide and it talks through some, you know, general Consensus estimates and very interesting graphics as well to have a look at So I do recommend that you have a read of that. You can access all of these articles I I tweet out from the amplify me account probably something like 10 to 12 articles per day So if you just search for amplify me the handle is at underscore amplify me and you'll be able to find those articles But the point being here is a couple. So yesterday We saw record highs again in u.s Indices and on an individual stock breakdown. Pfizer actually was quite a big standout. They were up about 4% You probably would have read they have been trending on on twitter There's obviously a lot of people quite critical about the amount of money that the company is making through their vaccines I just heard in the car dropping my daughter off at school this morning That the u.s. Are now approving the a third of the original Pfizer dose to give to five-year-olds essentially in the u.s And so the drug maker in itself And its partner by entech sales of COVID-19 vaccines are going to reach 36 billion For 2021 so they were out performing yesterday But looking at the broader market and this kind of ties in a little bit of the fed discussion overall and Even though the markets now await the fed decision tapering The important thing to understand is tapering as as meaningful as a milestone as that is It's really not that unexpected. It's not unexpected at all. In fact And so it's not really the tapering passé that the markets really going to look at I wrote some notes this morning talking about irrespective of the wills of normalizing policy getting into motion The direction of travel on interest rates is going to be relatively gradual And so that in itself then it's important to understand that the economic recovery because of things like perhaps covid In late summer in the u.s. But also as well this inflation stickiness at these elevated levels the economic recovery or growth story has been delayed Not derailed and hence the reason why then that okay, they can commence then tapering But I wouldn't be expecting this kind of immediate rate-hiking aggressive cycle that's going to be then something that would jeopardize the equity market to make this Have a bit more sense a good figure that I saw To make this point over the course of taper the fed will make available $540 billion of additional liquidity via qe between november 2021 So this month and this meeting to june 2022 that's assuming the fed stick to their Predetermined kind of forward guidance that they'll look to conclude the qe taper process by the middle of next year So although, you know, there's all this kind of taper tantrum kind of Things that people will mention in the end the government here is still going to be making over half a trillion Dollars worth of liquidity in the system as we go further forward in time over the next nine months So it's not by any way an immediate removal of stimulus and the whole market collapse And I think this goes a long way to explain why equity markets have traded like they have done at these record high levels because underpinning this is if what i'm saying is a more kind of Measured approach to normalizing policy in the u.s. It comes with Corporate earnings generally on the balance performing better irrespective of supply constraints and bottlenecks and all these other issues that corporates have faced and so hence we trade up Where we trade at the moment So yeah, just a bit of a kind of a macro overview rather than going into nitty gritty of how to trade tonight Which I'll cover of course when we have the live session later A few other things that get you up to speed over in china stocks were a little bit lower Generally, hong kong china's like underperformance. We had some comments yesterday. You probably saw but it's a recap If you didn't the premier of china li Yeah, kei shang said china's economy faces new downward pressures And that they would have to cut taxes and fees to address the problems faced by small and medium sized companies The other thing of course That this comes in the context of is After data showed a weaker economy in october through various different macroeconomic Metrics that we've had with china and then the other troubling thing we're seeing at the moment is more provinces and china Are fighting cobit 19 than at any time Since the pathogen first emerged in wuhan back in 20 late 2019 against 2020 In fact, if you actually look at this local infections have found How have been found at the moment in 19 of the 31 provinces in what is the world's second largest economy and so Thing to look at here the key It's very important not to look at this so much in context of a direct mapping over how This type of cobit case data gets Gets interpreted in western europe because if you actually look at this we're talking about one one to 100 cases So these orange hotspots which look like a dramatic outbreak of cobit. We're talking about 144 177 and these are provinces which You know the drill a province in china is about the size of a country And so these numbers are very low, but the point being here that's interesting is that china have as from their authorities approach to containment of Covid is Incredibly aggressive. They call it the golden 24 hours where even the sniff of a cobit case The entire area goes into lockdown A media and mass testing takes place now They were quite good at this back earlier on in the initial Pandemic begun But one of that what that means then is that people's immunity levels generally have not happened It's not like in the uk where we've had some of the highest cobit rates in the world But that then in turn means that general natural immunity is quite high Whereas in china if you immediately just put everyone to lockdown hardly anyone's got immunity Then comes the pressure you put on the vaccination rollout program But the difference is instead of talking about a country of 60 70 million here You're talking about a country in excess of a billion when it comes to there And so herein lies a bit of a challenge now Because also as well things like the efficacy decline that you see in people who are early vaccinated Means that they now need booster shots and so on and so forth So china's kind of getting these this renewed uptick at a moment and that again is quite concerning Just get generally given some of the weaker economic data And the government in itself Beijing Paying note to that talking about the new downward pressures in which they face and so again another reason That actually full following this full circle given how global and interconnected the markets are The fed will be mindful of this and although they're obviously looking at the domestic situation They need to look at the global situation as I mentioned there China is the world's second largest economy And so if they start to suffer that will start to bleed out into just general economic activity globally as well And then that lends its hand more to the measured approach of the fed and therefore Continues to underpin generally a nice environment as far as equities are concerned And and again hence the reason why we trade the way that we do so hopefully that kind of makes sense The other things are mainland europe as much as I could delve into every individual country One is the nedlands who've been Quite reactive. They've kind of made good and very bad decisions in terms of their handling of covid 19 Through the pandemic, but the dutch p.m. Rut Has said the country will impose new covid 19 restrictions with the use of face masks to be mandatory in public spaces And they've asked people to work from home at least half of the time So it's kind of like a plan b soft version of what the uk have been talking about And so yeah, the nedlands having to to change course once again on the brexit side of things Um, you know, it does feel like a bit of a broken record. They're still talking about the northern island protocol It's been the last five years of my life But the uk government is seeking to appoint new External legal advisors in preparation for a possible overhaul of the northern island controversial post brexit trading arrangements This was an article that came out last night Um on the ft if you want to read the falatica, I did tweet it last night The move to find fresh legal advice will fuel likely expectations that ministers are preparing to use article 16 Safeguard mechanism to try to fundamentally rewrite the deal Which is obviously soured e uk relations since it came into force in january, so No immediate move on this of course the dollar will kind of dominate proceedings today as far as trading the cable currency pair is concerned Two ways to kind of look at this from what I was reading last night. One is the fact that They're getting legal advice. So for me I I fundamentally believe this is just optics The uk makes some noises talks about article 16 preparation to kind of just scrap and redo the deal Which kind of blows up the existing brexit agreement I don't think they'll do that but they need to posture as in their serious You know in the backdrop of this is all the fishing dispute going on between brit and france as well at the moment As much as that's been kind of kicked down the road for the time being Um, the other thing is it's probably sensible Um, it's probably sensible on behalf of the uk to at least get additional legal advice to look at potential alternatives as Solutions to this matter. So that's one way of looking at it The other way of looking at it is fairly disconcerting that they're having to seek external legal advisors If you think about yourself in any legal situation If you're going to then seek more legal advice, it's because the ones that you have is not satisfactory And therefore you've probably wasted a lot of time and effort And so therefore you might be in a bad initial position legally hence the reason you're seeking new advice. So There's a couple of ways to interpret that as I said at the top I think this is more optics than anything else and it's just to kind of show europe that You know, we're serious about the potential Worst case scenarios and how we could deal with and when I say we I don't know why I'm referring to myself as part of the the brexit negotiation team, but britain I should say um, just Posturing to leverage their terms at the negotiation table All right, so let's look at the calendar for today. Um later on this morning You've got the final october uk service pmi numbers coming out at 9 30 Of course, non-farm payrolls don't forget, you know, although we're obsessed with the fed and obviously this time tomorrow's bank of england and opec We've got the nfp number coming out on friday. So we get the fed various job Indicators coming out of the us adp national employment now to be at 12 15 remember in london time not 115 given the clock change Expected for october 400k the previous reading was 568 000 you then get the market Service final reading. So focus then will be in the ism services pmi at 2 p.m. Alongside us factory orders You got that all infantry numbers coming out usual Wednesday afternoon, but slightly earlier again with the clock change at 230 london time The apis last night showed another build The fifth weekly crew build in the last six weeks in fact came in at 3.6 million Expectations were for two and a quarter cushing a draw of 882 000 gasoline a draw of half a million Just still it's a build just over half a million Other than that just looking at speakers. You got christine lagarde. These be present is speaking But off topic. It's just a commentary at the bank of portugal anniversary event happening But she will be making an appearance from 10 15 You've then got her colleagues billeroy from the ecb and elderson speaking at 1 and 230 p.m Respectively drone pow of course with the press conference half an hour after the statement so statement 6 p.m Press conference with pow at 6 30 fixed income auctions coming out of uk germany and quarterly refunding announcement out of the us As well as far as major u.s. Earnings nothing really from an index point of view That you need to worry about but from a single stock perspective qualcomm cbs health some of the bigger names reporting All right, that is it going to leave it there and I will see you guys Hopefully later on I will be live on this youtube channel for how to find me From 5 45 so 15 minutes before the fmc statement at 6 p.m. So hopefully I'll see you then all right take care