Good morning. Well it looks like we are on track for a Tory majority, the SNP have hit a home run in Scotland with 58 out of the 59 seats, Labour, Lib Dem have taken a mauling, and UKIP have faded away. The FTSE started reacting positive around 10pm as results started, rising to 6994 this morning – where I have 25ema on the daily resistance. However, its also NFP Friday today (non Farm Payrolls, USA), so could be all over the place. A Tory majority should be good for stock prices and the economy in general as the fiscal policies of the last 5 years can continue. Yesterday was interesting as we had a sharp decline in the morning, 100 off the highs set at 7am, as it looked like Labour where stealing a march on the other parties, then a decent recovery in the afternoon. I was a bit too early with my 2 longs in the end.
US & Asia Overnight from Bloomberg
Asian stocks rose, after the regional benchmark index closed Thursday at its lowest in a month, as investors awaited U.S. labor data.
The MSCI Asia Pacific Index gained 0.1 percent to 150.49 as of 9:45 a.m. in Tokyo after ending yesterday at its lowest since April 7. The measure is poised for a 1.6 percent slide this week, its second straight weekly decline.
“There’s very little to drive the markets ahead of the macro data,” said Andrew Sullivan, head of sales trading at Haitong International Securities Group Ltd. in Hong Kong. “We may see some caution into the close. The wage levels will probably be more closely watched for signs of inflation.”
Japan’s Topix index added 0.5 percent. Australia’s S&P/ASX 200 Index gained 0.6 percent, while New Zealand’s NZX 50 Index increased 0.3 percent. South Korea’s Kospi index lost 0.1 percent. Markets in Hong Kong and China are yet to open.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying equity measure rose 0.4 percent on Thursday in New York as Yahoo! Inc. led a rebound in technology shares.
U.S. employers probably added 228,000 workers to nonfarm payrolls in April, after a 126,000 increase in March, according to economists surveyed by Bloomberg. Federal Reserve policy makers are monitoring labor data to determine the timing of higher borrowing costs after economic growth slowed in the first quarter for reasons the central bank called “transitory.”
David Cameron is on course to remain prime minister at the head of a minority government after the U.K. general election, an exit poll indicated. The Conservatives were forecast to win 316 of Parliament’s 650 seats, with the Labour Party trailing on 239 seats, according to the survey of voters published as polling stations closed at 10 p.m. Thursday. The pound jumped.
Energy shares led losses on the MSCI Asia Pacific Index Friday as oil in New York headed for its first weekly decline since March. [Ref]
FTSE Outlook
An updated BBC forecast at 6 a.m. put the Conservatives at 325 seats of Parliament’s 650 seats, more than in the last election in 2010, with Ed Miliband’s Labour Party trailing on 232 seats. The Liberal Democrats were forecast to win 12 seats, a fifth of their 2010 total.
We have had a decent overnight rise as the results have started to come through, however the daily chart has 25ema resistance at 6994 and we have in fact dropped off that level since hitting it just after 6am. I am going to go against the initial grain and actually expect a bit of a drop from this resistance to 6910 where we have the daily pivot before the bulls step in. I imagine that a lot of bulls will have missed that rise so far, waiting till the results of the election where confirmed before entering. The market will aim to stop out those early bulls, before the big fish can enter lower down. Just a hunch mind! We have also pushed above the top of the 10 day Bianca channel at 6946 so a dip to back test that channel is also likely. Just above the 6994 resistance we have the top of a 30min PRT channel with resistance at 7007, and then the top of the 20 day Bianca at 7030. Support below the pivot is 6892, then 6860 for the bottom of the 20 day Bianca and then 6824 for the 10 day Bianca though I would be surprised if we went that low today. Don’t forget we have NFP jobs news at 13:30 which is a market mover.