Good morning. That was a great FTSE trade yesterday in the end , and the bulls did try and break 6710, but couldn’t hold it, before the bears dragged things back down. European stocks snapped a five-day winning streak as declines in banks outweighed a surge in miners. Greek shares slid for a second day. We have a 10 point dividend applying to the FTSE today, so bear that in mind if you have a position open at the close.
I have set up a new service looking at buying levels for FTSE 100 shares – you can read more about it here. Each day you will receive an email if you join it, giving the buy levels for particular shares that are looking good for a rise.
US & Asia Overnight from Bloomberg
Asian stocks fell as investors weighed comments from a Federal Reserve official ahead of U.S. employment data.
The MSCI Asia Pacific Index slipped 0.3 percent to 141.24 as of 9:02 a.m. in Tokyo. Interest-rate futures showed traders are raising the likelihood of an increase next month by the Federal Reserve, after Fed Bank of Atlanta President Dennis Lockhart said in an interview with the Wall Street Journal that it would take significant deterioration in economic data to convince him that a hike in September should be delayed.
“A lot of it is going to hinge on these next few data points, with the jobs report on Friday that will be important,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion, said by phone. “For all their faults, equities still seem to stack up better than a lot of other asset classes.”
Japan’s Topix index was little changed. South Korea’s Kospi added 0.1 percent. Australia’s S&P/ASX 200 Index declined 0.1 percent and New Zealand’s NZX 50 Index rose 0.2 percent.
Futures on Hong Kong’s Hang Seng Index and contracts on the Hang Seng China Enterprises Index increased 0.4 percent. Contracts on the FTSE China A50 Index, which tracks the biggest mainland Chinese shares, dropped 0.1 percent in Singapore as futures on the Shanghai Shenzhen CSI 300 Index jumped 6 percent.
Chinese stocks listed in the U.S. rallied Tuesday after a 3.7 percent climb in the Shanghai Composite Index. Chinese equities climbed for only the second time in eight days last session after local authorities imposed restrictions on short selling, their latest salvo in a bid to stem gyrations in the stock market. Some brokerages halted their short-selling businesses entirely.
U.S. payrolls probably rose by 225,000 in July, according to the median estimate of 83 analysts surveyed by Bloomberg News ahead of Friday’s government jobs report. That compares with 223,000 in June. The private ADP National Employment Report is due Wednesday.
Traders are pricing in a 48 percent probability that the Fed will raise interest rates in September. That compares with a 38 percent chance earlier Tuesday.
E-mini futures on the S&P 500 added 0.1 percent after the underlying gauge on Tuesday slipped 0.2 percent. [Ref]
FTSE Outlook and prediction
We have a 10 point divi today so that should be large enough to bring out some divi hunters at the close, probably starting about 16:15 or thereabouts. It all up to the bulls today who must break through and hold above 6700 if they are to have any hope of building on the recent gains. They got a bit of kicking yesterday being pushed back from 6720. A break of this level will put them in a safer position, certainly to start thing ink about 6740 (top of the rising 30min channel) and also the top of the 10 day Bianca and 20 day Raff at around 6780, 6790. I have put a rise in from the pivot at 6682, however a long here with a tight stop is necessary as if this level breaks then I think we will be dipping down to 6650 for the bottom of that channel, and possibly 6620 as support below that. For the moment, to start with, if the pivot holds I am feeling bullish for another charge from the bulls. Otherwise I am prepared to be fickle today and flick to bear on a break of 6682.