Good morning. Welcome to CMC markets on Friday the 3rd of May and this quick look ahead at the week beginning the 6th of May It's been another decent week for equity markets The German DAX has made a new seven month high above 12,400 and the S&P 500 has managed to make a new record peak above 2940 I think what has struck me more than anything about these particular moves of these two particular indexes is the fact that We haven't really significantly broken above the previous highs particularly in the case of the S&P 500 which saw rather sharp sell-off in the wake of This week's FOMC Rate meeting and press conference from Fed Chair Jay Powell who's rather less than dovish press conference Appeared to catch investors on the hop, but I don't think really we should have been too surprised by that I think markets have been caught up way too much in the political rhetoric of people like Larry Kudlow President Trump's chief economic advisor Who's been calling for a 50 basis point rate cut and President Trump himself who's been calling for a 1%? Fed rate cut now if you actually look at the data neither of those two options is in any way credible Yet markets were pricing in a 62% probability that would see a rate cut By year end and I think press and I think chair Powell's press conference was an effort To reorientate market expectations about the likelihood of a rate cut by year into a much more realistic 50-50 outcome if you actually look at the data the direction of travel for the of the US data There's nothing to suggest that a rate cut Is in any way imminent and I think Chair Powell's press conference was an attempt to try and reorientate the Balance of probabilities now those probabilities could well change later today As we gear up for the US payrolls numbers, but certainly if adp Payrolls are any guide Then the likelihood is we're going to get a fairly decent us payrolls number or certainly Something in the region of around about 180 to 190 thousand New jobs now that could well change Obviously this video will go out post payrolls and we will know more post payrolls than we are Then we'll know now Wages are once again likely to expected to come in around about 3.2 or 3.3 percent And the likelihood of that changing Significantly is not expected to alter the calculus that much What we're also seeing is a strengthening of the dollar and we can see that here in the context of the dollar index Dollar index is up three days in a row. It's well above the 50 100 and 200 day moving averages And the trend is very much clearly your friend in the case of the dollar index So certainly dollar is still very much a case of buy dips The US economy continues to outperform relative to the rest of the world And we have seen a bearish key day reversal on the s&p 500 which might suggest That further improvements in economic data could conversely actually have A negative effect on further aggressive upside in the s&p 500 So we'll have to see how it reacts around about 29 50 29 60 area But I think it's more than likely we'll have a goldilocks scenario whereby the downside is limited to around about 2900 and we could well start to wedge higher But this key day reversal on the US markets Is a warning sign that potentially we could be right for a little bit of a correction Towards the downside, but I don't certainly don't think we'll be we'll be crashing off anytime soon Irrespective of the narrative that gets peddled out every time we come to may which is selling may and go away The trend is still clearly towards the upside. We're still making gradual new highs I expect that to continue while we remain above 2900 on the s&p And while we remain well above 12 000 on the german DAX So it's very much by the dips on equity markets in general We can see also we can also see that in the context of the footsie 100 as well So what are we looking at? For the week ahead because I think it's incumbent upon me to look Towards the week ahead given that equity markets still remain by and large fairly resilient. Well, I'm going to be looking towards UK GDP For the first quarter as well as manufacturing and trade data and that's due out on the 10th of may Due out towards the end of the week We've also got china trade data For april and that could have a significant effect on the australian dollar And it's likely to be a busy week for the australian dollar because we also have The rba Rate decision. So if we look at what i'm looking at for this week, these are the key Markets that i'm looking at for this week the uk 100 footsie 100 s and p 500 of the german DAX We've covered all of them and we're going to look at the australian dollar And the australian dollar has been looking particularly weak in the past Few weeks no pun intended there Simply on the back of slightly weaker than expected economic data And is on the cusp of a very key support level in and around 69 80 69 90 now We've had an awful lot of holidays this week. We've got golden week and china's had a couple of days off But the most recent set of china trade data for march were a little bit of a mixed bag After the weakness of the february numbers There was an improvement in the march export numbers Which improved significantly with the rise of 14.2 percent. That was well above expectations And certainly a vast improvement on the 20 percent decline in february Imports were a little bit more mixed. They were disappointing. They declined 7.6 percent And while they were better than the february numbers, they still remained in the red So i think in terms of internal demand for the chinese economy We have seen a little bit of a slipback on the pmis Which might suggest that the chinese economy maybe isn't as strong as maybe The bounce back in march suggests and that we could well see a little bit of a slipback In april So i think this week's april trade numbers are likely to determine whether the improvement in march was a post lunar new year rebound Or something more pronounced certainly the pmis suggests that Maybe the recovery that we saw in march may not be sustainable and if internal demand Continues to be a concern that's likely to impact on the australian dollar Now it's an rba rate decision And we've seen a surprise deterioration in recent australian economic data and that's prompted speculation That the rba could well be minded to cut rates when they meet to discuss monetary policy On the 7th of may now i think any move on monetary policy next week is highly unlikely Why do i think that because it's an election in may and central bankers by definition are a bit of a cautious bunch They will be very keen not to try and move do anything on monetary policy that could be seen to influence The political vote and that is why i think it'll be very surprising If the rba moves on rates when it meets Next week now that's not to say they won't have a dovish Outlook but certainly in the context of where we are at the moment. There is big support around about 69 80 We do remain vulnerable to a downside push But i think a rate cut at this point in time with an election upcoming Would be a very high risk and very out of character for the central bank We also have a meeting from the rbnz and again Lightly to have a fairly dovish pivot there But i think most of the dovish pivot is likely to be priced into the rba as well as being priced in to the rbnz What else are we looking at for next week services pmis for europe which are due out on the 6th of may the bank holiday monday We have seen a little bit of an improvement in the uk numbers and broadly i think in terms Of services there has been an outperformance relative to manufacturing So i'm expecting that trend to continue in april if recent flash pmis are any guide More broadly i think on terms of the stock picture We're going to be looking towards the uber ipo which is due out on the friday And we also have the latest q1 earnings from lyft and at the moment lyft have been significantly underperforming After the optimism of the post ipo bounce we've pretty much gone one way It's not been a great few weeks for lyft. We've seen heavy falls in its share price Their q1 earnings are due out on the 7th of may and in its pre-ipo prospectus lyft's latest number shows the company turned over 2.6 billion in revenues last year more than double the amount Want to see if that trend continues in the first quarter profits continue to remain elusive Do the q1 numbers suggest that that will improve over the course of the next Um the next few months in terms of the uber ipo that's due out on the friday We will be covering that extensively The big question i think for most people is will it price above its ipo of 44 to 50 dollars a share Now the company is looking to raise nine billion dollars. It values the business around about 84 billion It's below the hundred billion expectations of a month ago. I still think that seems Fairly rich but having seen beyond meat IPO rise 150 on its first day just because it's loss making doesn't necessarily mean it's not going to go up So I think uber is going to be closely watched in terms of how that comes out of the traps Probably likely to trade at a premium in the first couple of days But again, you do have to wonder as to whether or not where how long it will take before reality takes over And the market starts to take a more realistic valuation on some of these ipos that have been coming out But that's it for this week. Thank you very much for listening. It's michael hueson talking to you from cmc markets


Thank you very much. Thank you all very much. Our Republican State Chairman, Emory Palmer. And I thank you, Senator Denton, for that kind introduction, and a special thanks to the Berry High School Band, the Hewitt-Truseville High School Band, the Fayette County High School Band, and the Cleveland High School Band. I can't help but see the young people here in the audience, and I have a special message for all of you from my roommate. She said, when it comes to drugs, please, for yourselves, for your families, for your future and your country, just say no. Well, it's great to be here with Bill McFarland. Bill will make Alabama a great congressman in the mold of Bill Dickinson and Sonny Callahan. And I hope you'll help him. And having been a governor myself for some time, I think I recognize good governor material when I see it. And believe me, Guy Hunt is the best. You send him and his teammate, Don McGriff, to the state capitol. And that brings me to today's star, and one of the all-star players in the U.S. Senate, a true American hero and a national treasure, Jerry Denton.  You probably know I couldn't do this much traveling when Congress was in session, as Jerry Denton will tell you. That's because some of those folks need watching. Now I'm not attacking the institution of the Congress, but among the members of the Congress, there are some that they remind me in their actions and their outlook on government of the three fellows that came out of a building one day and found they'd locked themselves out of their car. And the first one said, well, if somebody will get me a wire coat hanger, I'll straighten that out, and I know how to trip the handle, and I can get the car open. And the second one says we can't do that. Someone will think we're stealing the car. And the third one said, well, we better do something pretty quick because it's starting to rain and the top's down. That story says so much about how the tax and tax and spend and spend policies left our country just a few years ago. Negative growth, double-digit inflation, the highest interest rates since, get ready, the war between the states. And so as a part of that 1980 cleanup crew for the worst economic mess since the Great Depression, Jerry Denton and I headed for Washington. We cut government growth slash regulations and cut income taxes almost 25 percent. Today, and today we're enjoying one of the longest economic expansions in history, creating over 11 and a half million new jobs in the last 47 months. More jobs than Western Europe and Japan combined have created in the past 10 years. Inflation has plummeted from more than 12 percent to 1.8 percent. The prime interest rate has fallen by two-thirds. Mortgage and auto loan rates are down. You know, all those people that were making fun of us and getting mad at us and so forth and saying that it wouldn't work, I realized it was working when they stopped calling it Reaganomics. Just days ago, we learned that the figure that represents the country's economic growth, the gross national product, and some other indicators show our economy gathering momentum for even more growth, higher take-home pay, and more new jobs. In short, we're headed for a second boom. I'm determined to see that those who still are not sharing fully in our nation's prosperity do so. And I give you my pledge, neither Jerry nor I will be satisfied until this expansion reaches every sector of our economy and until every American who wants a job has a job. Now, to broaden our expansion, I signed into law last week the most sweeping reform of the tax code in our nation's history. For more than 80 percent of Americans, it means a top tax rate of 15 percent or less. And that's why I call it tax cut two. But wouldn't you know it even before the fair share tax plan reached my desk, the Democratic leadership in Congress was saying that they wanted to break faith with the American people and turn tax reform into a tax hike. You know, the truth is those people never saw a tax they didn't like. And when it comes to spending your hard-earned money, they act like they've got your credit card in their pocket and believe me, they never leave home without it. The American people know the truth. We don't have a deficit because we're taxed too little. We have a deficit because Congress spends too much. Isn't it about time the Congress started protecting the family budget instead of fattening the federal budget? The contrast between us and the leaders of the other party is just as apparent when it comes to judicial appointments. Now, you realize that the president appoints the federal judges, but they can't be a judge unless they are approved by the Senate. Well, since I began appointing federal judges to be approved by people like Jerry Denton and the Republican Senate, the federal judiciary has become tougher, much tougher on criminals. Criminals are going to jail more often and receiving longer sentences. Over and over again, the Democratic leadership has tried in the Senate to torpedo our choices for judges. And that's where Jerry Denton can make all the difference. Without him and the Republican majority in the Senate, we'll find liberals like Joe Biden and a certain fellow from Massachusetts deciding who our judges are going to be. I just bet you'll agree, I'd rather have a judiciary committee headed by Strom Thurmond as it is than one run by Joe Biden or Teddy Kennedy. I don't know why, but around about here, I always feel like telling a story and maybe some of you've heard it, but then you got to remember that when you get past 40, you begin telling stories over and over again. This is a story about a Democratic fundraiser in a downtown hotel. And when they started coming out of the fundraiser, there was a kid outside with a bunch of puppies, and he was holding them up and he was saying, buy a puppy, a Democrat puppy, buy a Democrat puppy. Two weeks later, the Republicans held a fundraiser there. And as they started coming out, here was the same kid with the puppies and he was saying, buy a Republican puppy, buy a Republican puppy. And a newspaper man was there and had been there two weeks before. I said, wait a minute, kid, you were here two weeks ago with those puppies and you were calling them Democrat puppies. Now you're calling them Republican puppies. How come? Kid says now they got their eyes open. But ladies and gentlemen, we've come now to an issue that transcends in importance, even all the other crucial issues that I've mentioned. My most solemn duty as president is the safety of the American people and the security of these United States. Here too, because of the support of men like Jerry Denton, we've been able to restore America's strength. There's nothing I'm prouder of than the two million young men and women who make up the armed forces of the United States. Now let me tell you, if we must ever ask them to put their lives on the line for the United States of America, then they deserve to have the finest weapons and equipment that money can buy and with Jerry Denton's help, we're going to see that they get that. Because of our young men and women in uniform, things have really changed around the world. You know, America used to wear a kick me sign around its neck. We threw that sign away. Now it reads, don't tread on me. It's still a difficult and dangerous world out there. But with Jerry's help, we've made ourselves stronger and better prepared to deal with it. And I just have to believe that with Jeremiah Denton sharing the Senate subcommittee on security and terrorism, every nickel and dime tar dictator around the world knows that if he tangles with the United States of America, he will have a price to pay. Another thing I'm especially proud of after six years of this administration, not one square inch of territory has been lost to communists and one small country, Grenada, has been set free. And finally, there's another special accomplishment. We must never forget that it was our decision to move ahead with SDI, the Strategic Defense Initiative Against Ballistic Missiles, that brought the Soviet Union to the bargaining table. Now today, we're dealing with the Soviet Union from a position of strength. And let me pledge to you today, our goal is to save the West from mutual nuclear terror, to make ballistic missiles obsolete and ultimately to remove them from the face of the earth. I think it's a travesty that we should be engaged in what was called mutual assured destruction, the mad policy. And this meant that, well, we'll both have so many weapons pointed at each other and no defense against them that maybe we'll be scared to shoot at each other first. That doesn't make me sleep easier at night. In Iceland, we came closer to real arms reduction than ever before. But Mr. Gorbachev decided to make progress hostage to demands that we kill SDI. I had to remind him that SDI is America's insurance policy to protect us from accidents or some mad man who might come along as a Hitler came along or just in case the Soviets don't keep their side of the bargain. And I had to remind Mr. Gorbachev of my pledge to the American people to never abandon SDI and that in America, when you give your word, you keep your word. So that's all I did in Iceland was try to keep my word. What we need in Washington is a Congress that won't give away at the conference table what we refuse to surrender at the negotiating table in Reykjavik, Iceland. No responsible president should rely solely on a piece of paper for his country's safety. The record on Soviet Treaty violations is clear. We can either bet on American technology to keep us safe or on Soviet promises. Each has its own track record. And I'll bet on American technology anytime. Now, you know, in a crowd like this and in this place, there must be many Democrats. I want you to know that during these past six years as president, I've relied again and again upon the support of Democrats like you who are here today. And I thank you. And as you may know, I used to be a Democrat myself till I learned that the liberal leadership of that party had become completely out of step with the hardworking and patriotic men and women who make up the Democratic Party across this nation. I know how tough it can be to break with tradition. As a matter of fact, after I had decided that I could no longer follow that leadership and I began campaigning for Republican candidates, I still hadn't gotten around to re-registering. And then one night I was speaking to a Republican fundraiser and a woman stood up right in the middle of my speech out there in the audience and she said, have you re-registered? And I said, not yet, but I'm going to. She said, I'm a registrar. And she came right down the center. I'll put it on the podium and I signed up and then said, now where was I? Well, we have to remember what Winston Churchill said. He was in the British parliament and he changed parties and he was criticized for that. And he said, some men change principle for party, others change party for principle.  Will you choose the Democratic leaders who in 1980 weakened our nation and nearly brought its economy to its knees, who raised your taxes and announced their plans to do so again, who oppose our efforts to rebuild or build a defense to protect us from attack by nuclear ballistic missiles? Or will you choose to give the cleanup crew of 1980 a chance to finish the job? You know, my name will never appear on a ballot again, but if you'd like to vote for me one more time, you can do so by voting for Jerry. Look, the important as this election will be to me, it'll be even more important to you and especially to you young people because you, it's going to shape our nation's future. And every poll shows that the age group from 18 to 24 has the highest percentage of that group on our side. But every poll shows just as clearly that in that same age group, 18 to 24, you have the lowest voter turnout. So you young people here not only go out prepared to vote, but go out as missionaries and buttonhole your friends and tell them to get on the ball and vote.  It's exercise your sacred right as Americans, participate in shaping history itself. And as I say, do it by casting your vote. And you know something? I goofed a little while ago when I started in. I forgot to mention the Oak Grove High School Band. You know, you young people, and I knew a time when I was a governor of California when I couldn't have said what I'm going to say now. I've been all over the country. I've been on campuses. I've been in schools. I've been visiting with our young men and women in uniform and their military bases. Back at the beginning of World War II, General George C. Marshall was the chief of staff of our army. And someone asked him as we went into that terrible war, did we have a secret weapon? And if so, what? And George C. Marshall said, yes, we have a secret weapon. It's just the best blankety blank kids in the world. And after all that I've seen crisscrossing this country about your generation, if George Marshall was around, he'd say you're the best blankety blank kids in the world. Well, it's getting coming on time to go now. But before leaving, I'd just like to say that people my age deeply believe it's our duty to turn over to you young Americans the same freedom and opportunity that our parents and grandparents handed on to us when it came our turn. And when we look at you, when we see your openness, your enthusiasm for America and for life itself, it gives us heart. I just want to close by saying a few words about this man I'm honored to call my friend, Jerry Denton. It makes you proud to be in government when you can work with someone like Jerry. And whenever I'm with him, I can't help but think back to that time when after unimaginable suffering in a North Vietnamese prison camp, Jerry stepped from his plane onto U.S. soil for the first time in nearly eight years. And then, and I saw you, Jerry, that morning on television in Sacramento with no idea that we'd be standing together now. But today I think we can all say with you what those of us who were watching saw you say then the simplest, truest words ever spoken by a human being for all of that misery. He said, God bless America. Thank you.