FTSE 100 live outlook prediction analysis for 21st August 2020
Here’s a short summary of yesterday’s events…
- Stock markets were in the red as worse-than-expected US jobless data underlined concerns about the outlook for the world’s biggest economy.
- Stocks fell on the news that just over 1.1m people in the US filed new claims for jobless benefits last week, a much steeper rise than expected.
- The news came a day after the US Federal Reserve underlined the vulnerability of the economy while the coronavirus pandemic rages on.
- European stock markets ended the session lower, pulled down by the losses on Wall Street.
The FTSE 100 has finished 1.61pc lower Thursday to 6,013.34 – its weakest close since July. 31 – while the FTSE 250 fell 0.49pc to 17,496.43.
Apple
With a $2 trillion market cap under its belt, Apple has a new milestone in its sights: becoming worth more than the entire FTSE 100. The iPhone maker is worth £1.5 trillion in sterling terms, versus the FTSE 100’s total market capitalisation of £1.7 trillion. Apple – which nabbed the title of world’s largest company last month – has rapidly closed the gap with London’s blue-chip index over recent years as its share price undergoes a meteoric rise. Shares in the Cupertino, California-headquartered group have soared almost 60pc this year despite the pandemic. In contrast, the FTSE 100 is down by a fifth, leaving it as one of the biggest laggards across the main global indices.[Bloomberg]
Welcome Home (or Else)
U.S. President Donald Trump is threatening to impose tariffs on American companies that refuse to move jobs back to the country from overseas, if he’s re-elected. “We will give tax credits to companies to bring jobs back to America, and if they don’t do it, we will put tariffs on those companies, and they will have to pay us a lot of money,” Trump said during a campaign event. He offered no explanation about how such a system of tax credits and tariffs would work, and it isn’t clear if the White House is developing such a policy. Meanwhile, China confirmed plans for talks with the U.S. on their preliminary trade deal, even as relations between the two countries deteriorate. Commerce Ministry spokesman Gao Feng didn’t announce an exact date but said the two nations will be in touch in the near term. U.S. oil exports to China are set to reach a record next month in a sign that Beijing is stepping up purchases to meet its commitments under a landmark trade deal reached earlier this year. Roughly 37 million barrels of oil will be sent to China in September, according to provisional tanker fixtures, surpassing the 35.2 million barrel record set in May. [Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks, U.S. and European equity futures climbed Friday as technology shares continued to drive gains, tempering concern over a bumpy economic recovery. The dollar edged lower. Stocks saw a modest advance in Hong Kong, China and Japan, following a fresh Nasdaq 100 record overnight. Volumes were below average. South Korean stocks pared some of Thursday’s slump as data showed a slide in exports eased. S&P 500 futures edged higher, while the 10-year Treasury yield was steady. The offshore yuan rose to its highest level in seven months.
The S&P 500 posted a moderate climb Thursday, when a technology rally offset a slide for energy producers and banks amid light volume. The benchmark had shrugged off earlier weakness from disappointing jobs data.
Final day of the week and the FTSE is significantly weaker than the US markets at the moment, with the S&P drop off 3399 not making much more headway since getting 3345. The SPX 2 hour chart has gone bullish after the bulls bought that dip back up, and has support at 3384 for today. If we do see some strength in that today it may help the FTSE, which is being pegged back by cable at the moment. If the S&P bulls do manage to break 3399 then the 3430 level is next up as resistance.
For the FTSE today (and we have option expiry today so expect some choppiness at 10:10am) we have initial support at the recent low at 6008. Below that then S1 and the fib looks to be worth a long at around the 5990 – 5996 area, as the bulls will be keen to keep the price above 6000. Is the FTSE front running the inevitable S&P drop that is looming though? Below the 5990 level then the next daily support level is 5950 and then we start looking at the 10 day Raff channel again with support at 5900. Thats area looks key in the short term, as a break of that may well see another 100 wiped off fairly quickly. August is often a strange month and the volume should return in September – possibly just being dropped down at the moment ready for the players to pile back in during September of course, at a much better level….
For the bulls, they will need to break 6045 initially which is the overnight high. Above this then we have a cluster of resistance levels at the 6075 area, namely the 200ema on the 30min and a key fib here. This is also just above R1. As such, should we get this high then a short at this level looks to be worth taking. Above this then the bulls will likely take it up to 6100 where we again test the 25ema on the daily chart. Cable dropping, and a positive US market might just help drag it up a bit today. We shall see.
As it’s Friday then be a bit more cautious – lower stake sizes are worth doing today as many a trader has lost the weeks gains on a Friday!
So looking at 6008, 5990, 5950 as support, 6045, 6075 6100 as resistance. Have a good day, and a great weekend.
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