 Hello and welcome to the week ahead video with me David Madden. Today's date is Friday the 12th of October 2018 and the time has just gone 945 British summer time and I'm looking ahead to the week ahead which begins Monday the 15th of October until Friday the 19th of October First of all this morning here in Europe. We've had a recent of size bounce back We've had a couple of that major sell-offs at the back during the week and we've seen a smaller bit of a bounce back in In Europe today. We had a relatively calm and a bit of a mixed session in Asia overnight There's a few reasons for that First of all the US Treasury stated that they don't believe the Chinese authorities have been manipulating the Chinese Yuan the domestic currency And also we have some trade figures out of China overnight the trade surplus increased and then and the Trade surplus with the USA as she increased to a record high So on one hand you could you could argue that President Trump has indicated in his decision to try and go after China and actually impose impose tariffs as a way of actually rebalancing the trading relationship between three countries There's also an argument to be made that tariffs are already in place on Chinese and Chinese imports I'm actually the trading surplus that China has with the US is actually increasing So the relatively calm session that we had and it makes big session that we had in Asia overnight led to a small bit of a bounce back in Europe today but ultimately the the fears the issues which Triggered that the sell-off we've seen in the last couple of days I was actually are still very much so very much in play The fears in relation to prospect of higher interest rates from the United States and also political uncertainty in Italy because the Administration in Rome is set to go kind of the clash heads with Brussels in relation to that the proposed budget deficit These issues are still ongoing But if traders can kind of just get used to the fact that we are probably looking to having higher interest rates in the United States In the next coming next coming next number of months. This could transpire to just be a bit of a speed bump Bearing in mind US markets particularly the tech sector at a great run through the kind of second half of 2018 at the Nasdaq 100 was clocking up record highs between all between June and August of 2018 and we also We also had record highs from the from the Dow and the S&P 500 on top of that So a bit of a pullback was always kind of a result of the pipeline in the next few weeks We are coming into reporting season So we're gonna have updates for major US companies which should be touching on in a second relation to the week ahead itself So this could also be a bit of a bit of profit taking in advance of the of the quarterly updates Traders are going to be keeping an eye on the forward guidance during during the important season As I said interest rates have risen in the in the US Three on three occasions in 2018. I am expecting more rate hikes in the next 12 months So the forward guidance and also the just overall concerns About the state of the global economy emerge market economies are under pressure I've only under even more pressure due to a relatively strong US dollar of the Queen back has gained a fair bit of ground in recent months And also the relatively high yields can also put it US yields are putting pressure on US economy So taking a taking a look at the actual events coming up next week on Monday the 15th We have US retail sales Consider the campus board Consider a survey in the US recently an 18-year high unemployment is at a slow level since 1969 Ultimately the American economy is in by and large producing producing strong economic indicators But the retail sales will be a true gauge of actually how confident Americans are essentially More Americans are the more they're going to spend and wages Even though they've taken back recently they're still kind of higher than they were on average in the last couple of years Looking ahead to Tuesday the 16th We have Chinese PPI and Chinese CPI and on Friday the 19th We have Chinese third quarter GDP. We fixed asset investment and also have industrial production So these figures come out of China are all going to be about how strong and how strong the band is in the Chinese economy And the Chinese economy has been cooling down since 2010 But the last number of years it's been kind of declining or it's been it has been the cooling But it's been cooling at a relatively stable and steady rate. So Third are going to be looking at the CPI PPI the GDP the fixed asset investment and also the industrial block And also the industrial production numbers trying to gauge how strong or weak the Chinese economy is as I mentioned The trade figures would suggest that the the tariffs present from the polls in China have actually really impacted the economy so far So the figures that we'll see next week or gives better indication on Tuesday we have third quarter figures from Netflix the share price of Netflix hit an all-time high in June We did see a bit of selling off in advance of the second quarter figures in July Second quarter figures in July were good, but they weren't good enough essentially the company is Attracting more more customers at home both in the US and on the international market But they didn't match the fairly high expectations that customers have Sorry, they didn't I didn't match the expectation that analysts have so it's all about the actual hot Can the company actually beat the beat the expected customer customer customer expectations is what it's all about Competition continues to be tough within the history of market The Amazon, Apple or Apple are in play Disney are looking to launch their own streaming service So it is going to be about get spending quite a bit of money on content because quality content is king And if the companies essentially can keep drawing new customers and exceeding the expectations It's just like we could see a continuation in the the wider Apple trend of the share price On Tuesday we have some numbers out of the UK on Tuesday We have unemployment and average earnings on Wednesday. We have UK CPI and a Thursday We have UK retail sales So basically the British economy isn't in a fairly decent shape the last number of months The jobless rate is only 4% it's low since 1975 to be perfectly honest whether unemployment moves One tenth up or down is really make a difference. You know the jobs market is very strong Earnings I've ticked up in the UK earning average earnings excluding bonuses Increased by 2.9% on a year-on-year basis, which is quite decent Once again when the more Britons earned the more likely to what they spend and if the job market economy if the jobs economy jobs My job market really is tightening you'd imagine that employers are actually start paying more offering more to attract new staff So keep an eye on the on the earnings components CPI in the in the UK is at 2.7% So it's actually below the average earnings rate So employees are getting a real increase in wages, which is positive once again British economy and British consumers earn more if they want to spend more So I keep an eye on the on the red inflation in relation to the earnings figure on Wednesday We have had them yours on CPI yours on core CPI. This is the distance for the where is the preliminary report? Come out a number weeks ago and show that the head the head on CPI figure jumped up to 2.1% from 2% But the core figure was stripped out things like energy Food actually declined to a 0.9% from from 1% So it would suggest that actual genuine demand is actually cooled a bit in the eurozone But the headline figure was possibly possibly only pushed up because of the relatively high oil prices Ultimately, it's all it's always going to be above demand for the European Central Bank They will see strong demand before they look to even consider raising interest rates the ECB European Central Bank are looking to raise Interest rates until at least the back end of next year even if then so we wouldn't see fairly decent demand coming from the eurozone before then as you mentioned earlier on please keep an eye on the situation in Italy We could have a bit of a clash between the Italian government and Brussels And if you do see any downgrades or any concerns about downgrades on Italian debt That could also put pressure on the current on the euro On Wednesday, we have full your figures from ASOS and ASOS Continuing to do well sales are up profits are up But the company has such a lofty valuation Price learning ratio is 64 so any kind of size the company isn't going to deliver stellar results The share price does tend to take a bit of a knock so which we saw over the summer in the summer ASOS said that four month sales up until June increased by increased by 22% But that wasn't good enough and as we're expecting the summer in the region around 25 point a 27 ASOS also said that full-year Sales and profits are going to be up But the sales forecast is going to be at the low end of their own guidance So you have seen a bit of a bit of a second pressure on ASOS recently On Wednesday, we have well what begins on Wednesday is a two-day EU summit And this is it this would be very potentially very important in relation to Brexit and speculation We could we could have if there is to be a deal announced between the UK and the European Union if there is to be to be a deal announced in relation to the withdrawal deal It could be this week potentially as to keep an eye on the power sterling on the back of that On Wednesday, we have the minutes from the Fed meeting last month where the Federal Reserve raised interest rates by 0.25% It was a third height rate hike of 2018 the Federal Reserve also managed to actually upgrade its outlook for growth The next couple of years in this in the same meeting This would be the minutes of from that meeting and since then keep in mind Jerome Powell The head of the Federal Reserve has come out and said that the US Neutral the US economy and US rates are still nowhere near at the neutral rate So that kind of led to us to believe that we're in the pipeline for more interest rate hikes Turning our attention to Friday when we have Canadian CPI the most recent reading of getting CPI was the old support Where it came in at 2.8% down from 3% down from 3% In in July which was actually a seven-year high Whereas the core CPI rate in Canada managed to take up to 1.7% Which is basically a two-year high so the man is it's clearly it's clearly fairly strong in Canada The recent jobs figures from Canada on the on the on the surface was you quite positive over 63,000 jobs were added but there was a decline of eight of over of nearly 17,000 jobs and In relation to full-time jobs and the whereas part-time job rose by over 80,000 So it wasn't as good as initially expected The Canadian Central Bank are often a kind of a few months behind the Federal Reserve when it comes to hiking rates And the office is just like to kind of keep kind of keep the gap not too small between the Fed feds rate hikes and their own so Given the Fed have hiked three times this year and there's a high probability of a rate hike in December We could potentially see a rate hike from the back of Canada at the back end of October and Finally, we've been updated from a number of major US banks on Thursday the 16th We've an update from third for the update from Goldman Sachs and Morgan Stanley and on Friday We have the third quarter update from State Street For the wider banking sector investors are going to be keeping eye on the thick the how the fixed income currencies Components how well investment banks how they're doing in relation to trading the financial markets Also, it also we're pointing out that US government bond deals. The yield curve has been steeping recently So basically a higher interest rate environment will be beneficial to US banking stocks down the line Taking a look on a couple of the markets now as I mentioned in relation to recent economic indicators coming out of the UK We also have the EU and Solid work would potentially have some sort of breakthrough in relation to Brexit taking a look at the controversy US dollar So after a major sell-off between all between April and August the pound has been kind of pushing higher in recent In recent weeks, so you're talking about nearly almost eight weeks of kind of a broadly speaking upper trend Kind of higher high higher low higher high higher low and push higher yet again So the broader trend for the last say several weeks is to the upside in the pound US dollar It is very much going to be Brexit dependent any kind of where it's going to be positive or negative or that's the one's the fourth But what we've seen so far and what about the Seen that has happened so far the market has been has been pushing higher I think you could push out higher from here and we take out the most recent the late late September high We keep making heading back up towards the the July the late early July high Which comes into play at this area here at one spot 33 61 And if you go beyond that we could really carry back up towards the June high At once by 34 72 any moves to the downside in the pound dollar could find support some support in around here The 130 mark of this blue line here the 50 moving average which comes into play at one of spot 29 80 one spot 29 82 As I was saying we have had a fairly brutal day a couple days of selling in the European markets But we have seen a bit of a bounce back today. This year is the tax the germarkets like I was saying We do have your own CPI up during the week If you draw a line from the high of June through the high of July and also through the high of September We can see fairly we can see we can see that this timeline resistance has been a player a number of occasions So a classic example of lower highs. We have seen it in recent times as well Actually lower lows as well So it's a very much in a very steep downward trend if the kind of negative sentiment does does does does continue I'll be given any back down towards the 11,500 area on the backs any move to the upside may run to resistance at 12,000 a big psychological number And if you go beyond that it may run to resistance in around this area here Where this for the trend line comes to the play which would be in around 12,250 Taking a look now at the the Dow Jones as I said we have a few minutes mid-minute meetings next week And as I say we have a very decent sell-off in the in the Dow in recent sessions So the big picture is essentially since February the Dow has been broadly been moving higher We can draw a trend line support here between the lows Essentially between February April and also may so we're well off the lows here It wasn't that long though We're at an all-time high as you can see how just how far the Dow has fallen in recent sessions, but most importantly we actually need We're back above this red line here the truly moving average which comes into play at 25,161 Why would we remain north of that metric? It's like the outlook for the Dow could remain positive And if you do like to kind of push on higher from here We could really be heading back up towards this blue line here the 50 moving average which comes to play at just above 26,000 notice how the 50 moving average did manage to act as support Back in mid-August and they all supported the potential to become new new resistance to keep an eye on that And if you go beyond that we could have been looking any backup back up towards The the October high moves to the downside if you if you break below 25,000 We could be heading back down to that down toward this trend line which come into play in around the 24,000 340 350 mark Take a look now at dollar cat as I say we have Canadian CPI coming out next week so the broad picture essentially since Since January some sort of bulk of the year the dollar cat has a broad we've been moving higher and we're back above this Drain line here the turn the moving average which comes to play at one spot 2887 if you remain north of that is likely that the outlook is going to remain positive And if you need to push on higher from there We could be looking at target in the early September high of one spot 32 26 Move to the downside could find support from the turn the moving average And if you break below the recent October low of one spot 20 once by 2782 we could be looking heading back down towards kind of the 125 region Lastly, I'll just quickly talk about ASOS. Well the companies as they have numbers on next week as well So if you know this the stock has had a terrific run over the last number of years We have had a fairly sizable sell-off essentially since March as in a classic example of a downward trend lower lows and lower Highs we recently were back down the levels not seen since December December 2016 so 22 month lows is a steady increase in negative momentum and the active indicator and But we aren't hovering around the 50 pound mark and if you hold south of it He's got a big psychological number We could see further we could see further setting pressure And if you do look continue to kind of push it in the recent downward trend We can look headed back down towards 44 18 if it do you manage to reach a 50 pounds We could be looking heading back up towards the blitz this blue line here the fifth moving average Which comes to play at 58 62 no solid communications. It might manage to act At resistance so it could act resistance again in the near term if you've any Comments you want to make on this video or any other other videos you've made here at see emcee Marcus Please feel free to leave a review on good reviews, and that's all for me this week. Thank you very much