 Hello and welcome to CMC Markets on Friday the 25th of January and this quick look at the week ahead beginning the 28th of January but before we get to that I have a quick preview of the week just gone and it has been a bit of a mixed bag for C100 as had by and large a fairly disappointing week respecting the trend line from the peaks that we saw in the middle of the summer finding progress a little bit difficult to sustain anywhere above the 7000 level and we've started to drift back down again but contrast that to say for example the performance of the German DAX and it's been a slightly more positive picture despite the fact that we've seen some fairly disappointing economic data out of Germany as well as the rest of Europe I think one of the key factors thus far I think in terms of the DAX moving higher I think has been a slightly more dovish tone from the European central bank which is I think to a certain extent kept a cap on the euro and in essence I think there's also been a technical break above the 11,000 level in the DAX which is proving to be fairly supportive of the index and could well see us move back towards the 11,500 level if we also look at Asia markets there's been a slightly more positive tone there as well and a K225 is closed higher for the third week in succession and again that's on the back of a fairly dovish Bank of Japan but I also think there is a little bit more optimism about around China US just China US trade despite the fact that Wilbur Ross the US US trade secretary said that China and the US were miles away or miles apart on coming to some form of trade agreement by the end of this month and there is a meeting at the end of this month between Chinese vice-premier he and senior US officials with respect to trying to thrash out some form of agreement going forward if we look at the performance of the S&P 500 this week it's been largely unimpressive we haven't really moved significantly higher but we found the downside fairly limited and it's going to be a big week next week I think for US earnings as well been a bit of a mixed bag this week but next week we've got the big three of Apple Q1 for earnings for Q1 Facebook Q4 and Amazon Q4 and I'll cover them in a little bit more detail but there are a number of other key events coming up this week which could well dominate the headlines first of which is the Brexit debates kick off with respect to plan B and the Pounds had one of its better weeks this week on rising optimism that a no-deal Brexit is becoming much less likely now obviously I think investors think that it's becoming much less likely because of a quorum of MPs in the House of Commons are looking to pass an amendment next week that will be tacked on to a bill which says that if there is no deal approval for a plan B by February the 26th the House of Commons must vote for an extension to article 50 and that would prevent the government from running down the clock to the 29th of March now there has been some softening around the edges on some of the part on some parts of the Brexiteers that they may accept a time limited backstop but there is no evidence whatsoever that the European Union would accept that condition so we still remain where we were a week ago and that that's basically one of three options an extension to article 50 which will have to be approved by the European Union a revocation of article 50 or a no-deal all of which are in the hands of MPs in the House of Commons nonetheless the pound has moved higher we've moved above the 200-day moving average we haven't unequivocally closed above it and as such it's still likely that we could see that there's an awful lot of nervousness around about 132 anywhere near 132 in the range highs that we saw from September unless there is a significant moving of the goalpost going forward so that starts on the 29th of January we've got a Fed meeting on the 30th of January and I think this will be particularly instructive in light of recent comments from various Fed officials who've been talking about the need for a pause in the US rate hiking cycle now if we look at the way the dollars performed over the course of the last few days certainly I think the market seems a little bit unconvinced about the fact that the Fed will pause this year it's unlikely we'll get a rate rise in March but it certainly doesn't rule out a rate rise in say for example June September or December weekly jobless claims came in at the lowest level since 1969 but US data at the moment is going to be significantly unreliable because of the government shutdown so it's going to be very very difficult to get a handle on how well or how badly the US economy is going is performing over the course of the next few weeks simply because we will not have any data being collated for that now we do have non-farm payrolls coming up on Friday that's one of the few numbers that may not be affected by the US government shutdown but certainly I think some elements of data collection might be so even while we may get a number it may not be particularly instructive and I think that's going to be the key for markets going forward will we see a significant market reaction to the payrolls number given that the data may be a little bit unreliable nonetheless I think in terms of the Fed meeting and non-farm payrolls there will be two events next week that will definitely drive the direction of the dollar now US officials as I say will be hindered by the fact that they don't have visibility on US economic data and that I think will keep them with a fairly neutral bias for rate hikes going forward and ultimately I think keep them very neutral and probably mean that a March rate hike is nowhere it won't be considered now obviously the January payrolls number is going to be compared in contrast to the December 1 of 312,000 and the wage growth number of 3.2 percent that payrolls report ticked every conceivable box in terms of how well the US economy is doing this payrolls report probably won't do the same thing it's likely to come in much lower than that but as long as wages hold up fairly well I think it's quite likely that the dollar will remain fairly well supported we also have the latest European Union CPI numbers now in the wake of the ECB rate meeting and the dovish change to guidance by the European Central Bank in terms of the growth risks have shifted to the downside I think the inflation numbers are going to reinforce the fact that core inflation within the euro area remains very weak we've broken below this trend line from the lows in euro on euro dollar from the lows in the end of last year but we haven't as yet broken below the 112 80 level I think as long as we hold below 114 then I think it's quite likely that we will still maintain the downside bias and revisit these lows of around about 112 111 85 we've also got manufacturing PMIs out on January on on for January on the 1st of February on Friday we've got a whole host of data out on the Friday so it's going to be quite busy from that point of view but the Fed meeting will be instructive as will the US employment report so I said I would move on to Apple Amazon and Facebook and with that I will do I will certainly do that and if we look at Apple's share price that's been on a significant downward slant for quite some time now one of the main reasons for the underperformance in the apple share price was a decision at the beginning of this month to downgrade the outlook for the quarter from 92 billion dollars of revenue to 84 now that's still a healthy chunk of change but ultimately I think there's concerns about the slowdown in China lower demands for its iPhones you look at the Q4 revenues of 63 billion I think Apple's had a slightly poor quarter I think they're overreaching in terms of price point and that would suggest that it's quite likely that unless the Apple's share price gets back above this 160 level here that I'm highlighting here these peaks from the beginning of the month through here there's the profit warning we pulled back some of that we filled the gap but we haven't moved back above 160 if we can't get back above 160 there's a good chance we could trend lower through the lows that we saw the beginning of the month and down to levels last seen back in 2017 if we also look at Facebook again we've seen some significant declines and a bit of a rebound there as well but they've been the last 18 months again have been hard going for Facebook and again here big big resistance level again around about the 160 level for Facebook and that's going to make it I think very very difficult for the share price to recover going forward and last but not least it's our old favorite Amazon we look at the share price here again we've seen a decent rebound and in particular I think with respect to the sales of all the revenues numbers are going to be of particular interest because Apple's return Apple Amazon has had a fairly decent performance over the past 12 months turning out some really decent profits largely as a result of its cloud and advertising business its share price did plunge in q4 along with the rest of the tech sector and it did issue a little bit of a downbeat q3 earnings update which means that despite the really strong performance that it posted in its holiday period where it sold a record number of items I think in terms of the revenue number that's going to be particularly key in terms of did it achieve those sales as a result of heavy discounting or did it achieve some decent numbers as a result of some fairly decent turnover so again here big resistance around about $1800 $1800 there if we can get through there then we could go quite a bit higher but again what's instructive about all three of these is significant resistance areas from the peaks that we saw October and November we haven't been able to get back above them if we get a decent earnings performance from the tech sector next week then the S&P can resume its output move if we can't then we could roll over and head back towards the downside so a lot is resting on next week's tech earnings numbers from Apple Facebook and Amazon 29th of January 30th of January 31st of January so that's it for this week thank you very much for listening Michael Houston talking to you from CMC Markets