FTSE 100 live outlook prediction analysis for 24th September 2020
The S&P took its time but did drop off the 3330 level in the end.
- UK PMIs fall as pace of recovery slows
- Eurozone economic rebound stalls amid services slowdown – Flash PMIs indicated the eurozone’s economic recovery has stalled, with activity falling slightly compared to August. Analysts warned the UK may soon follow.
- FTSE jumps as pound weakens to touch two-month low
- JP Morgan plans to move €200bn of assets from UK to Germany due to Brexit
- HSBC and Goldman Sachs put brakes on workers returning to the office
Those months budget has been scrapped, and instead Rishi Sunak will now make an economy update statement today at around 1230. This is expected to reveal the plans for the further protection of jobs over the winter once the furlough scheme ends at the end ope October. It has been winding down since August, encouraging people to go back to work and limiting the bill to the Treasury, which currently stands at £40bn. But a resurgence in the virus means new restrictions have been introduced, so the crisis is not over yet. The problem is urgent. About a tenth of business employees were still on furlough at the start of this month, according to ONS surveys, amounting to around 2.2m people. By the end of next month their employers will either have to take them fully back on to the payroll, or make them redundant.
Market Open
Asian stocks were on course for declines after warnings from Federal Reserve officials on the need for more stimulus pushed U.S. equities to an eight-week low. The dollar extended this week’s gains. Futures in Japan and Hong Kong retreated, while S&P 500 futures opened little changed. The benchmark is now down almost 10% from its recent high and fell another 2.4% Wednesday. Treasuries were little changed. The caution comes as virus cases tick higher in the U.S. and other parts of the world. Traders are losing faith in the strength of the economic recovery, with the chances for Congressional stimulus withering ahead of a contentious election battle. Global equities are on course for the first monthly slide since March. Oil declined.
Grounded
Airlines have felt the pain of the coronavirus pandemic more than other companies. Almost overnight the bulk of their business ceased. Now, almost eight months into the pandemic, with cities reentering lockdown and a vaccine likely months away, it’s apparent there will be no quick comeback. International air traffic in July was 92% below 2019 levels, and there was little sign of improvement in August, according to the International Air Transport Association (IATA). More than 400,000 airline jobs have been cut since February, according to data compiled by Bloomberg. “This is lasting longer and is deeper than most people thought,” says Scott Kirby, chief executive officer of United Airlines. “And our view is demand is not coming back. People are not going to get back and travel like they did before until there’s a vaccine that’s been widely distributed.”[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks and European futures fell as warnings from the Federal Reserve on the need for more stimulus injected fresh jitters into an already weak September for global equities. The dollar continued its recent runup and is on course for the strongest week since April.
The markets certainly got spooked again yesterday and the S&P bulls now need to defend the 3220 level once again. A break of that will likely see the bottom of the 10 day Raff tested at 3185 if it breaks today. For the FTSE we are just testing the 2 hour support area as I write this at 5825 so if that holds, we may see an initial climb towards the daily pivot, fib level and 200ema at the 5900 area. We also have the Chancellor later outlining the next plan for job retention over the winter and during the extended virus lockdown period once the furlough shame ends.
The cluster of resistance at the 5900 area should hold on the first test, but if the bulls push past these then I am thinking that we will see a rise towards the R1 level at 5940. 5973 is above that and would be yet another test of the 25ema on the daily (we dropped off just below this line yesterday) and if the US bulls do put up some defence then that should follow through into the FTSE. That said, they need to break their 2 hour resistance at 3262 first of all.
Below the 5825 level then the FTSE would be on for S1 first up at 5809, with S2 at 5762 below that. We also have the bottom of the 20 day Raff channel at 5756 so should we get that low today then a long here is worth a go. Not expecting a massive sell off again today though.
Generally today I am expecting a bit of a rise, and the double bottom on the S&P overnight at the 3225 support level bodes well for some upside today. Yesterdays drop was a bit overdone across the board I feel, and as long as these support levels are defended initially (3225 and 5825) I think we will see some bull today. There is however a bit of news due out though with Powell and Mnuchin testifying, along with the US initial jobless claims – though maybe they will be better than expected as lockdown restrictions were eased.
Good luck today and lets see if we get a bounce from those supports.
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