FTSE 100 live outlook prediction analysis for 28th May 2020
- Stock markets rose on the back of more easing of coronavirus lockdowns
- Adding to optimism was a proposal by European Union chief Ursula von der Leyen for a €750bn post-virus recovery fund for Europe
- German airline Lufthansa’s shares fell sharply on reports that the board couldn’t agree to accept certain parts of the German government bailout plan
- Supermarket food sales surged at a record pace over the last quarter compared to a year earlier rising over 14pc
- The pound slipped after Sir David Frost, the UK’s Chief Brexit negotiator, said that the current EU mandate for talks would make it difficult to arrive at an agreement the UK can accept
- Crude oil prices have slipped back from their recent 2-month highs
London’s benchmark index rose 1.26pc yesterday as more easing of coronavirus lockdowns created a positive buzz on trading floors, analysts said. The FTSE 250 closed 1.24pc higher. Investors on both sides of the Atlantic mostly brushed aside deteriorating China-US relations and the impact of Hong Kong protests.
Autonomy Gone
“Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997.” So said U.S. Secretary of State Michael Pompeo in a statement Wednesday, and his words could trigger sanctions and have far-reaching consequences for the former British colony’s special trading status with the U.S. The announcement comes after the government in Beijing declared its intention to pass a national security law curtailing the rights and freedoms of Hong Kong citizens. Further ratcheting up Beijing-Washington tensions, the House voted later Wednesday to authorize sanctions against Chinese officials for human rights abuses against Muslim minorities. The moves come as tensions between the world’s two largest economies continue to escalate, fueled by U.S. President Donald Trump’s accusations that China was slow to disclose the peril of coronavirus as well as China’s steps to assert more control over Hong Kong. Meanwhile, in the first major test of Hong Kong’s protest movement in 2020, it became clear that demonstrators face a more formidablechallenge in reigniting their street power — and that could inspire a shift toward more radical views.
100,000 Deaths in America
American coronavirus deaths topped the 100,000 mark on Wednesday evening local time, according to John Hopkins data. In better news, Anthony Fauci, the U.S. government’s top infectious-disease expert, said there’s a “good chance” a vaccine may be deployable by November or December and the U.S. Centers for Disease Control and Prevention issued guidelines for reopening office buildings. New York Governor Andrew Cuomo again appealed for Congress to provide aid for cash-strapped states, while New York Mayor Bill de Blasio said the city faces a $9 billion budget hole. New Jersey is “well past the peak” of the outbreak, its governor said. Elsewhere, though, cases are soaring in Brazil, and police opened an investigation into Rio de Janeiro’s handling of the crisis, while Mexico had its deadliest day yet. The European Union will propose a fiscal package worth more than $800 billion, and Japan is planning new economic stimulus valued in excess of $1 trillion. Around the world cases surpassed 5.6 million, with deaths exceeding 353,000.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks were mixed on Thursday, with Hong Kong shares tumbling amid deteriorating U.S.-China ties, while some other markets showed resilience. The Hang Seng Index flirted with the lowest level since global strains peaked in March, and the offshore yuan dipped after the U.S. said it could no longer certify Hong Kong’s political autonomy, a move that could have far-reaching consequences.
Well the bulls certainly gained the upper hand yesterday and I am thinking that we will see a rise and dip play out today. The S&P did an overshoot of the 3030 then fell back but has since climbed and broken above with more conviction. Can’t beat stimulus to push the markets higher. As such the FTSE looks to be on a path towards the 6285 daily resistance level today. I am expecting a stutter here and we may well see a pull back from here back down to test the 6186 previous resistance. The longer time frame charts remain bullish so buying the dip is still the preferred play for the moment. Can the S&P push towards the 3137 20d Raff channel top now?
Above the 6285 resistance level then R3 at 6359, and also the top of the 10 day Raff channel at 6380 are the next key areas to watch though can we add that much today? Probably not and I think that 6285 is probably going to hold. It is also just above R2 which is at 6270.
For support today initially we have the 6186 level turning into support now we have moved above that. Below this then the daily pivot and 2 hour moving average at 6135 both tally, and should the bears take it that low then this level may well hold. If the bears really go for it though then the 200ema and fib level at 6100 would be the next key level to watch.
The ASX200 (Australia) had a rise and dip play out today, and with the S&P breaking through 3030 with a bit more conviction overnight, I think that we will also get a bullish morning, and then a possible dip later. As I write this we are just at the recent high at 6214, however overnight we did manage to get as high as 6244 so I wouldn’t be rushing to short off this level initially. The bulls remain in charge for the moment and with the markets performing a V, lets see if the global economies do the same.
Good luck today.
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