Good morning, for a while yesterday it didn’t look like the bulls were going to play the game with the rise to 6600, however, it took till late afternoon for them to wake up. We even have a high so far of 6620 (including spread) which was the level I mentioned the other day. At least the Americans are happy with the final resolution for the moment with the S&P making all time highs, and remained buoyant overnight with decent Chinese data – a GDP figure of 7.8%. We are also in earnings season and Google had decent results, also contributing to the rise.
Asia Overnight from Bloomberg
Asian stocks rose, pushing the benchmark index to a five-month high, and emerging-market currencies gained with copper after China’s economic growth quickened. U.S. equity-index futures climbed as Google Inc. sales topped estimates.
The MSCI Asia Pacific Index added 0.2 percent to at 1:48 p.m. in Tokyo as Australian stocks headed for the highest close in five years. Standard & Poor’s 500 Index (SPX) futures added 0.2 percent after the measure closed at a record high in New York. South Korea’s won reached the strongest in nine months as the Chinese yuan rose to a 20-year high. Copper futures in London climbed 0.2 percent, extending biggest weekly gain in a month.
China’s gross domestic product expanded 7.8 percent last quarter, official data showed today, matching the median estimate in a Bloomberg News survey of economists and halting a two-quarter slowdown. Federal Reserve Bank of Chicago President Charles Evans said yesterday the U.S. shouldn’t reduce stimulus after some reports stopped during a 16-day government shutdown.
“China’s economic growth is stabilizing and that added more confidence into markets going into next year,” said Caroline Maurer, a Singapore-based fund manager at Henderson Global Investors, which oversees $110 billion of assets. “We are also likely to see some impact to the U.S. fourth-quarter data because of the shutdown, which could mean any Fed tapering is likely to be put off a bit later.”
Company Earnings
Gains in the S&P 500 futures suggest the gauge will add to yesterday’s 0.7 percent rally. President Barack Obama signed a bill yesterday to reopen the government through Jan. 15 and extend its borrowing authority to Feb. 7 next year.
General Electric Co., Honeywell International Inc. and Morgan Stanley are among 18 S&P-listed companies scheduled to report earnings today. Google rose 8.2 percent in after-hours trading in New York after third-quarter sales exceeded analysts’ estimate. Among 87 companies that have reported quarterly results so far, 72 percent exceeded profit estimates while 57 percent beat sales projections.
FTSE Outlook
Both the daily trends are up and with the daily pivot at 6560 we could find support there on any initial dips. It certainly did well reaching 6600 yesterday and even a little further. However, we are testing the top of the Bianca channels with the 50 day at 6638, and slightly above the 20 day still which is at 6603. I expect some pause for thought at 6635. We have a decent looking channel on the 30 minute chart which was tested twice yesterday, though out of hours, so should still be relevant for today. If that 6635 level breaks then it looks like the next area of interest will be 6694. I am going to try a short at 6635 but will keep the stop tights, mainly as its Friday and could do anything. We might also see some profit taking later on going into the weekend.