 Okay, very good morning to you. It is Wednesday the 10th of November. I hope you're doing well and Gonna kick things off by talking about the heat map for the S&P 500 and how Wall Street closed last night because we did have a lower finish The S&P and the Dow Jones industrial average both finishing down about a third of 1% Then as that down 0.6 of 1% so looking at the heat map here Importantly then the decline in the S&P was the first time it's fallen in 9 sessions and that ends that multi-year Kind of consecutive incline that we had been seeing the decline was led by financials You can see here on the heat map it breaks it down by top-level sectors and finance here was under the most pressure It came after US 10-year-old slump to its lowest level in several weeks On the flip side in the green you can see and the way generally heat map works It's the bigger the square the bigger the market weighted cap is in Categorized in those sectors and Amazon a really nice green spot yesterday They were up around 2.5% And that came after PayPal announced that users of its payments app Venmo will be able to buy products on Amazon with the app starting from next year being received very positively for the Stop price on the other side if we go down to the bottom here Let me just bump this up a little bit so you can see it right down here in the bottom You've got Tesla of course and Tesla finished down yesterday about 12% They're one of the largest declineers and hence the reason and subsequently why the Nasdaq by a ratio of 2 to 1 Underperformed those other major US indices and the headline of course They're always going to be made Super sensational and Tesla erases Then 199 billion in its worst two-day route in 14 months and you know what goes up must come down But I think a lot of this needs to be taken in context because just check out the Tesla chart I mean their shares still up the good part of 45% on the year And they're still holding a one trillion dollar market cap It's just the fact that they've come off 200 billion given the Meteoric rise that we've seen of nearly 40% alone in just the last fortnight So yeah as much as the the papers will be talking a lot about this and obviously it comes in the context of the The poll that must been out the weekend which we talked about his brother as well offloading shares and other things as well In the mix but more so the behavioural aspects of just coming off after that You know wicked acceleration that we had had in their stock price. So Yeah, we'll keep an eye on that and certainly from the heat map perspective That was a bit of an eyesore on the red side of things Amazon the outperformer yesterday Move before I move on though. I just wanted to mention that we've got our latest Free market simulation happening today Later on this evening London time. So all you need to do is just go to amplify me.com and just click book free simulation or Alternatively, if you want to access our Content community hub that you can see here Again, absolutely free to get the last latest market analysis careers advice and help and insights from industry leaders Then all you need to do is just sign up for free here Again, this is very much focused on students looking to find their their path in finance and for sure We'd love to have you part of the community as well Just another shout that if you scroll down to the very bottom You can also access then a subscription to our free daily market maker newsletter Which I write at the end of every European trading day Just kind of deconstructing the three-minute breakdown of major market topic And it did come yesterday after I had a really great talk with the former global head of research at Deutsche Nimora Bilal Hafiz about Ethereum specifically yesterday and in the context of some of those crypto moves was a really interesting chat So you can check that out on the on the YouTube channel But back to the news and what have we got so let's let's pivot over to to China and Gonna talk about inflation as per the consensus Well the actual focus of the market will absolutely be on inflation today Namely because we've got the US CPI where the headline year-on-year reading is expected to be higher since 1990 we'll get to that in a moment because inflation is a global Issue at the moment and China's inflation risks of building as producers pass on higher costs is the headline One of the things here is vegetable prices now jump after weather related supply disruptions And what what does this look like? This is looking at a bit of a breakdown here And you can see three different things the black line is produced producer prices in China the pink line is CPI consumer prices and the blue reading corn as you can see there has always been In the aftermath of the pandemic at growing divergence between producer prices and CPI, so that's not particularly new PPI though is now at its highest or rising this fastest pace in 26 years CPI this is the one thing that people are looking at is as you can see it has seen a slight uptick So it's still massive golf between the two but CPI rising now. It's fastest pace in sep of 2020 and producer prices in China been rapidly rising as you can see in for several months first due to global Commodity price rallies that we've been seeing and then output curves caused by a power crunch that was very much a domestic issue Consumer inflation is also starting to pick up as I mentioned vegetable prices in particular whether related supply problems are pushing up food prices and as these Producer prices continue the manufacturing costs to go up Some of them are now passing on higher costs to retailers and subsequently consumer prices are going higher So definitely keeping an eye on this and this is that balance as well between the general perception Whether or not just given some of the economic slowdown that we're seeing the COVID Complications that China continues to confront as they lock down large-scale provinces given their zero tolerance policies Whether or not the central bank will have to Acting kind to kind of continue to support the economy now whether that comes in triple R cuts The reserve required ratio or as it has been of late further large-scale liquidity injections because one thing is as we go into Q4 in the beginning of the year There's also Chinese new year as well And so typically a season where you get a lot of front loading of demand and whether or not that starts to also filter through into price pressures are going to have to be watched sticking with the The area and talking about China and US relations as you can see here Biden and the G All-looking very smiley and happy at this point in time, but actually some more kind of positive Concillatory tone to some of the latest news as a virtual meeting Apparently is being planned between the two leaders and that could be held as soon as next week According to people briefed on the matter. So not official, but that generally means that that probably is the case in the most recent letter Xi yesterday in It's kind of sending to the US negotiators negotiators had said that China is ready to work with the US to manage differences So yeah, despite You know a few days ago They were kind of in the desert in China Mapping out US warships as to do military exercises We're now also now saying yeah, we're willing to work out our differences. So this is just the art of Negotiating right you just kind of flex your muscles particularly given the the large-scale Government meetings that are happening throughout the week At the moment for the Communist Party and so that's not unusual to be showing those sorts of science and then going into these more high-level negotiations Few a few individual stock stories. I thought I just mentioned a lot of these are kind of Trending names rather than in large market cap from a more index-weighted perspective But three nonetheless that I thought were quite meaningful one was Coinbase Coinbase shares were down the best part of 15 percent after market last night The cryptocurrency exchange reported really disappointing revenue for the third quarter and importantly shrinking number of active users So those shares were heavily lower after market Door dash This was out yesterday talking about buying Finnish food delivery startup Walt Enterprises for about eight billion US dollars More consolidation happening in the food delivery market as they all try to keep pace in In the competitive area given what we've had with the pandemic Door dashes shares actually were up 24% in extended trading in New York after news of the deal but also as well their third quarter results exceeded expectations and then the other one is Rivian They are the electric electric vehicle makers price. It's initial public offering at 78 dollars a share and that is Significantly above market expectations and that sets the stage for one of the largest US stock market debuts In fact of the past decade So yeah, definitely a big individual stock story there as well to be aware of Sticking with equities. The other thing is just gonna jump over to the UK Brexit aside One of the things here that came out from yesterday was JP Morgan analysts and they've made quite a meaningful shift Because essentially what they've done is turn bullish on UK stocks for the first time since essentially the Brexit vote Which was obviously the summer of 2016 They've had a long-standing kind of cautious call on the UK since that point in time But their aggregated data shows that the UK is open at a record discount versus other regions both on the price to earnings And a price to book basis I have tweeted the full article from the amplify me Twitter account If you want to check out the full article But I just thought it was quite interesting because this is a first change in obviously multiple years as we just mentioned All right calendar for today We've already had the Chinese data the UK European morning is super quiet the main focal point of course is US CPI coming out 130 alongside initial jobless claims now US CPI Obviously is going to grab a lot of headline attention because the year-on-year is expected to go up to 5.8% And that would mark then an acceleration from the previous reading of 5.4% and also the highest reading since 1990 So the press are going to have a field day with that later on this afternoon Core CPI is expected to rise a slightly more modest pace of 4.3% on an annual basis up from 4% in the September reading Economists policy makers everyone's going to be closely scrutinizing this of course for further science of inflationary pressures Perhaps broadening and looking for evidence of broadening beyond sectors most sensitive to pandemic related disruptions So one word of advice and I'll definitely make sure that I'm sharing some information on Twitter and so on at the time At 130 is look at the underlying report. So when you go on to the actual Well, let's just do that as an exercise together now So just jump on Google US CPI and then you want to get the Bureau of Labor statistics so the actual The people who construct the data point and when that when the actual data comes out you can go on here It'll you won't need to look far because it will be the main headline piece that they'll actually have on their home page So you wouldn't even need to go on the CPI section and then actually so let's look at the last report Go into the report scroll down And this is the table that you really need to look at and it's looking at the line by line item of where are these inflationary pressures coming from And therefore trying to identify whether or not we're seeing a broadening beyond sectors most related to the pandemic disruptions And so things like used car and trucks for example, which was that big solely transitory factor Exing that out. What are some of the other underlying areas looking like at that point in time? And so that's that's what I'll be trying to help you guys with later on But something I'd suggest that you be mindful of if you're looking to trade that event later on today Um, one of the things here then is what's the overall market reaction? Likely to be to CPI But one thing I would say is that I'm just referring to my notes here the Fed Acknowledged more directly. Of course last week when we had the Fed meeting That the risk that inflation will continue rising And but highlighted the severe supply chain disruptions that are fueling today's price pressures Now this was echoed by Fed president Mary Daley He was a voter on the FMC last night and she said she expected I popping inflation to subside next year as pandemic related supply chain snarls abate And so I think she's right that comment As she said echoes what the Fed said last week and you remember one of the not surprises But one of the things that they did stick to was their party line that yes inflation is going to move higher But they still foresee it as transitory And so as much as today's number is going to be shock or nor and how high it is from a historical perspective the highest in fact in 21 years Um, or excuse me 31 years um The actual market impact to that. I'm not sure how large that would be given Um, the fact that the market's been on advanced notice about this for some time And we know what the Fed stance is is that even if it's high It's not going to be an immediate kind of responsive reaction to what they're going to do. They've already set out their stall now. So it's only to bear in mind other things for today uh, you have got the oil infantry data coming out later, of course, we had the apis last night. We saw a drawdown surprise against consensus estimate of two and a half million and let's be looking for a build of 1.6 million gasoline a draw of half a million to still a build of the opposite Um, we also have on the calendar today from a speaker perspective is pretty quiet. However, the eu's brexit negotiator Sevkovich will brief european ambassadors today on the status of negotiations with london Comes in the context of course of the uk wanting to renegotiate the northern island protocol And the eu particularly led from the irish contingency talking about the potential of retaliatory measures if the uk were to Inaction article 16. So what's the latest there? And then from a fixed income perspective, we've got german auction 20-year bond and tenured tips announcement out the u.s. This afternoon with 25 billion dollar 30-year bond auction at 6 p.m European earnings of note. You do have some larger german firms eon Specifically, but alleyons. You've also got adidas and credit agriculture and france reporting today Um, but that is it. So i'm going to leave it there. Let you guys get on with the day Hopefully that was useful and i will see you the same time tomorrow. All right. Take care