 Hi there, I'm Anthony Chung and I'm the Head of Market Analysis here at Amplify Trading. Every weekday morning I'll deliver a fundamental rundown ahead of the European Open, but if you subscribe to the channel, you'll also get content from the rest of the team. So let's begin. Okay, a very good morning to you. It is Tuesday the 13th of October. I hope everything is going well. As you can see, you're going to start with an absolute sea of green that was seen yesterday after all three of the major US indices moved into positive firm territory. We were looking at, in yesterday's briefing, some key upside levels and they got absolutely obliterated yesterday as the technology large cap names, as you can see here, the biggest size of bore and brightest green squares. Amazon was up nearly 5%. Apple was up 6.35%. Do bear in mind though with Apple, they have got their event today where they're going to unveil their latest suite of iPhone 12 phones with 5G connection and it is, although this move was brought a context for an upward move across all markets and our performance in big tech, Apple often sees this type of movement in terms of by the rumors sell the facts. So it'll be interesting to see how they perform given the context of yesterday's general price movement. But as you can see, Facebook, Google, Microsoft and when those guys are higher, we know what happens. The whole market is dragged up and that's that 100 typically outperforms and in fact, this is a quick chart to show you here of the NASDAQ 100 posted yesterday. In fact, with a gain of just short of 3.1%, it was the biggest gain we've had since April and you'll remember what the market looked like in April. This was after we'd come off the most severe sell-off in March and then the Fed had come out, made unprecedented monetary easing and the market was already starting to powerfully rally back up in a kind of V-shaped recovery from that initial move that we had under the onset of the pandemic. So one of the biggest rallies we've had in a while there and before I get into some of the other overnight news, there's a particular big story about Johnson & Johnson, the farm sucecal company that's broken overnight. But I wanted to talk, let's just bookmark the end of a lot of reasoning of why this rally inequities is happening at the moment. And I just want to talk about the US elections and of course this is a big vocal point coming up for financial markets. Something that has seen a distinct sea change of late, particularly this month in the month of October and really it was initiated after that first presidential debate that they had. Remember the one where Trump was kind of barking and wouldn't let Biden get a word in sideways but one thing is Biden didn't perform as badly perhaps as some had feared. It's not that he really dominated, it just wasn't so clear-cut as people expected and as such then what we've been seeing really since that point in time is a couple of things which I'm going to show you. The first of which is then a continued divergence in the average poll of polls. Now the resource that we look at is the same one which is looked at by the broader market and that's the real clear politics average. What that does is it encapsulates all of the major polls that come out in the United States across all the different networks. So the Hill, YouGov, Reuters, CNBC, Rasmussen and so on and it calculates then an average of which at the moment Biden is ahead by 10.2 points. Now as you can see here that's quite a significant divergence that we had where Trump had narrowed prior to the actual first presidential debate to just around six points. So things have got worse for Trump and certainly hasn't been reflective here of any sympathy for the fact that he contracted the COVID-19 virus only around a week or so ago either. Now what does this mean for markets? Because initially I think a lot of people had been a little bit apprehensive about what a Biden presidency might mean for US equities. Given the fact that US equities have been on this phenomenal surge of course under the stewardship of Trump and people were thinking well if Biden comes in perhaps the tax rate gets bumped back up from 21 to 28 percent you know there's some other sectors which are going to suffer perhaps which are already beaten down like the energy sector because of the particularly low oil price that we've had in the prior quarter and that in this earning season is going to really come to fruition. But a couple of things here so investors if you actually look at it have rotated towards value stocks away from growth companies as investors are preparing for the likelihood of a big fiscal package coming if by way of what we get what people are calling is a blue wave remember that pyramid of power if you like on Capitol Hill if Biden wins the presidency that's not the be on end all but it could be for the Democrats if they can secure not just the House but also the Senate which is looking increasingly likely at this point in time. Now the prevailing market narrative a few months ago was that a blue election outcome would be a negative generally for equities because it would result as I said in higher corporate taxes more regulation in particular but in the past couple of weeks and really since we've moved into October that narrative has completely flipped on itself. Biden's widening lead then as we're seeing in the polls here and also in prediction markets and when we talk about prediction markets we look at the betting market. Now what was really interesting was only about I'd say a month ago it really was a toy cost 50-50 of what the betting market was seeing comparative to what still was quite a clear lead in the polls for Biden. Now Biden's not only increased the lead in the polls but the betting markets have shifted significantly in Biden's favor and this is reflective of where market sentiment is and underpins really why equity markets directionally although we've had fluctuation continue to push higher irrespective of the will they or won't they provide a fiscal stimulus in terms of the current negotiations that are happening. The market's looking at this big event of course coming in you know little over three weeks time and the outcome that that could be if there is in fact a blue wave which no one really gave too much tangible prospect of occurring only a month ago. So here you can see Biden it's almost 70 30 in his favor which is a big shift in his direction over recent weeks. So this is definitely something to to be aware of I definitely think that you know one of the biggest things to understand here is that something the market was particularly apprehensive about was a contested election. Now the closer the potential outcome would have been then the more higher the probability of it being contested by Trump. He's already said he wouldn't kind of go down without a fight in that respect hence the big tussle they had over the Supreme Court which would be a particularly important court in order to settle these types of matters. But here if the divergence becomes so wide well then all the more conclusive actually the election could get wrapped up and rather than having this protracted long unknown uncertain period of potentially that could have ran all the way up to the end of November of Thanksgiving perhaps then a more definitive and clear Biden win and a blue sweep wraps things up and eliminates that uncertainty and that's how markets are feeling at the moment and likelihood explains in a lot of this reasoning when we continue to punch on higher. The one thing I would stress though is that that markets don't move in a uniform fashion and just go up 3% in the NASDAQ every single day you know the quicker it rises it that will have its fairly violent but perhaps short-term pullbacks on what otherwise is a trend higher back up to even all-time highs. So don't just come into the market blindly you've got to pick your spots and also keep into context the severity of the rally that was seen on the prior day because without a fresh renewed catalyst it can be difficult for the market just to continue going higher bearing in mind there has been an update on another news story this morning which is this one. You've probably read about it already but Johnson & Johnson one of the world's largest pharmaceutical companies has said its COVID-19 vaccine study was temporarily halted at trial or clinical trial as a participant experienced an unexplained illness no real other details more than that at the moment but of course this move follows what we saw from that temporary halt to phase 3 trial testing in the US and it is still halted in the US only at the moment for AstraZeneca. This isn't too uncommon we've covered this ground before with AstraZeneca of course that late-stage testing it's quite routine to see pauses at this point in time but keep in mind the developmental process which would normally take really several years to bring a vaccine to market is being accelerated to the period of just a few months so perhaps that explains the relative calm nature of why markets have not seen too much reaction this morning because of the fact that look they are trying to push these things at a you know an incredibly fast pace so it's you'd say it's probably anticipated at some point there's going to be pauses but one thing I would say is that there's obviously multiple drugs in these phases Pfizer have said they could provide data to support an application for an emergency authorization as soon as this month and Moderna the other key company to keep an eye on doesn't expect to have such data until late November but if we start to see a recurring pattern here of delays across all of these as we go into the cold of winter months and as we're seeing at the moment in the UK mainland Europe and potentially in the US naturally COVID rates start to go up as transmission rates as where they keep people indoors and things like this starts to increase then this could be problematic later on down the line so definitely warrants watching at the moment and given the context of the sharpness of the rally yesterday I don't think the markets would need too much of an excuse to at least see a bit of short-term profit taking not to say though that once we come lower down then the move higher might not continue from a trend or more multiple-day scenario basis the other thing from overnight I just wanted to mention was this China's trade data came out and quite positive actually giving you the top-level summary China's imports grew at the fastest pace this year in September while exports extended strong gains as trading partners lifted coronavirus restrictions in a further boost to the world's second biggest economy so by the numbers their imports grew at the fastest pace this year actually in September so quite positive sign on the domestic front while exports extended strong gains as more trading partners as I just said lifted coronavirus restrictions how long that can last though is questionable I would say just given what's happening with the increased restrictions happening in certain pockets of the world at the moment exports in September were up 9.9% from a year earlier that was broadly in line with market expectations and up from a solid 9.5% we saw in the prime month in August a few other points from the overnight session I guess just to be aware of while I'm talking about that geographic region you've probably seen the Australian dollar got hit overnight now technically it broke out the bottom side of the trading range it was trading yesterday and it dropped straight through its S1 to its S2 and daily pivots now that came on the back of reports that China has suspended purchases of Australian coal so part of this whole situation at the moment where for various different matters a number of countries have been taking a somewhat anti-China stance China has been retaliating and as far as Australia is concerned China of course is the key trading partner and particularly the types of goods is natural resources that Australia would export to China so this kind of tweaking and suspension of purchase of Australian coal we've seen this sort of thing before and it does have a very short-term negative impact on the Aussie so a lot of that already has been priced in it really is a little bit counterbalanced by the fact that that's a negative but the fact that Chinese trade data and economy is performing okay at the moment is a positive doesn't make me feel particularly comfortable about reasserting a short at this point in the Aussie when it's already come down a decent amount overnight session so that ship might have potentially sailed on that point I guess one thing to keep an arm today will be performance of the dollar the Dixie's currently flat-ish at the moment up just 0.05 percent if the dollar really starts to firm up if equities do start to pull back in a kind of risk-off type move across assets then perhaps then there could be a short opportunity from a fundamental perspective in the Aussie given that news from China overnight on the the suspension of coal imports quick look then at some other things just to wrap up this was an exclusive story I saw last night on Reuters and a lot of people of course talking about the ECB and whether or not they're going to follow the Federal Reserve which of course has kind of led the way with the adoption of average inflation targeting away from this kind of fixed two percent format which has been adopted for many years in developed market Western central banks and it's quite interesting read actually I mean it's nothing really to I'd say create a trade opportunity in European assets this morning but it certainly is something to be aware of because it will have a significant impact later on down the line and that is that sources say there is reluctance among ECB policymakers to follow the Fed the fearing that that could tie their hands the fear is that going down the route of AIT could risk encouraging financial markets to jump to the wrong conclusions about future policy decisions based simply on where the average happened to be at any given point in time so they're kind of saying well the world's changed and inflation perhaps isn't the best singular metric and what they are if they draw too much emphasis on averaging inflation then they feel as though it could be and this is apparently shared as a view between the hawks and the doves on the council that the market might just hang on every single inflation reading where that average number resides as to then what the ECB is going to do in future and they don't want to be so shackled in that way so it's interesting the actual review I think off the top of my head from the ECB's monetary policy is not really due until next summer I think it is so this is all early kind of conversation at the moment quite interesting in the context of what the Fed have done okay the other thing to mention today is you do have a couple of earnings it really kicks off with some of the big banks and actually you've got Johnson and Johnson tough time for their for their board of course that that COVID-19 vaccine halt coming the day of which they released their corporate earnings but JNJ are coming but from the bank side you get JP Morgan City Group and BlackRock reporting earnings and these will all be prior to the market open another thing to be aware of today and it could be interesting to track their numbers if they start releasing very early preliminary results both today and tomorrow is Amazon Prime Day so it's Amazon Prime Day today and tomorrow so I love the way retailers work they call it Amazon Prime Day and it's two days actually but that could be quite interesting and also you've got that Apple event which kicks off at six o'clock London time this evening as well to see how their share price reacts but again with Apple events there's nothing really new or shocking that's going to come we know what's going to happen given a lot of the source reports we've had of length otherwise quick look at the calendar then in terms of UK economic data we've already had the UK average earnings numbers come out X bonus 0.8% against expected 0.6 still keeping an eye of course on the Brexit situation nothing to comment on this morning that's new in in the national press but again it's a situation in flux and obviously that that soft deadline is due for this Thursday not that we're expecting anything conclusive other than a commitment to continue talking and open dialogue going beyond that point ahead of the EU meeting on Thursday and Friday otherwise you've got the German ZEW numbers as I said yesterday it's the first time we get to have a little bit of a sense check of how analysts are feeling about current and future expectations over the next six months for now October so good chance to see where sentiment resides on that side of things the IMF world economic outlook is published as well later on this afternoon and you've got US CPI data which is expected to slightly tick up but again should really create too much in the way of uncertainties or market movement just given where it is against the the general average at this moment in time so yeah that pretty much is it so I know it's been mainly me talking and not too much on the charts but equity index futures are a relatively flat the the futures are pulled back a little bit as I said mark is a little bit tentative just given the run-up yesterday the severity of it and now layer in the fact that you've had this J and J COVID temporary halt and of course the timeliness of a vaccine coming to market it's going to be particularly important for the shape and speed of the economic recovery so that does impede some of that perhaps positivity from yesterday and t-notes are pretty flat gold top right here it was down in the overnight session as Asia just followed suit in Germany positive movements that were seen also with that overlay of Chinese positive trade data we dipped lower got to the s2 in the futures and you can see now we're just managing a quite a key technical level here I definitely keep an eye on which is around 1923 and a half here in the gold future as you've come back up to having broke that now as an area of resistance otherwise in the currency pairs as I said the dollar index is pretty flat that's generally mimicked by some of the major pairs URI and sterling down about 10 pips each respectively with some minor dollar strength up about 0.1 in the Dixie then oil just recovering a touch after a fairly heavy down day yesterday having broken down through the the $40 handle okay guys that is it from me so i'm going to wish you a good day ahead if i can help at all just let me know drop a comment into the chat and yeah subscribe to the channel more videos coming tomorrow have a good day