FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Stocks in Asia and US equity futures declined Tuesday as investors debated whether fresh Chinese stimulus can help counter the impact of lockdowns on the economy.
An MSCI Inc. gauge slipped as Hong Kong retreated after the government said it was unlikely to scrap hotel quarantine before July. Chinese shares fell with investment banks cutting their growth forecasts.
Nasdaq 100 futures underperformed after Snapchat owner Snap Inc. warned of deteriorating macroeconomic trends and said it’s unlikely to meet revenue and profit forecasts for the second quarter. US shares had closed higher. The dollar and Treasuries edged higher.
Traders shrugged off China’s latest measures to shore up flagging growth. UBS Group AG and JPMorgan Chase & Co. downgraded their forecasts for the nation’s economic growth this year.
Vladimir Putin’s blockade of Ukrainian ports “is a declaration of war on global food security,” a top UN official has warned, as 43m people are “knocking on starvation’s door” without exports from Europe’s breadbasket. David Beasley, head of the UN’s World Food Programme, said the world was facing “the worst humanitarian crisis since World War Two”, with tragic shortages already engulfing countries including Ethiopia and Afghanistan even before Russia invaded its neighbour with catastrophic consequences for grain exports.
Biden’s Gaffe
Oops, Biden did it again. When asked at a Tokyo press conference if the US would intervene militarily to defend Taiwan in the event of an attack from China, the president answered: “Yes. It’s a commitment we made.” (Watch that here). However, his comment was later walked back by White House officials, who said he simply meant the US would provide military aid to Taiwan, not send in troops. Biden has repeatedly used language about Taiwan that appeared to alter long-standing policy. Last year, he or his aides needed to clarify remarks on Taiwan on at least four separate occasions. And it’s not just Taiwan. In late March aides were forced to deny the US was seeking regime change in Russia when Biden went off script during a speech on war in Ukraine and said of Vladimir Putin: “For God’s sake, this man cannot remain in power.”
Tax Relief
China will offer more than 140 billion yuan ($21 billion) in additional tax relief mainly aimed at businesses as it seeks to offset the heavy impact of coronavirus lockdowns on the economy. The measures include additional tax rebates to companies and cuts of 60 billion yuan on passenger-car purchase taxes, China National Radio reported, citing a decision from a meeting of China’s State Council, a top government body chaired by Premier Li Keqiang. Bloomberg Economics last week slashed its forecast for China’s growth to 2% due to lockdown impacts, estimating that the U.S. economy may grow faster than China’s for the first time since 1976. Beijing yesterday reported a record number of Covid cases, fueling fears that a widespread lockdown there is coming.
FTSE 100 live outlook prediction analysis for 24th May 2022
A decent bull Monday yesterday and a bit of a short squeeze in the end as expected as we went towards the close, which predictably has tailed off overnight and set up a potential bear Tuesday. The bulls failed to hold 7500 overnight and there is the potential for a drop down to the 7425 level again to test the 30m 200ema and the S1 level for today. We also have the key fib here, so in theory this should be decent support to start with today.
If that does hold then we should get a rise towards the 7500 level again, and then possibly 7530 where we have R1 and the key fib resistance this time. If the bears reappear here then a drop back down to end the day below 7500 would probably fit quite well, probably back at 7450 where its looking at starting the day!
If the bears break 7425 then we will likely see a slide towards 7415 initially where we have the green 2h coral, but more likely the S2 level at 7367. That is also the mid point of the 20d Raff channel. Below that then S3 and the daily 200ema is at 7320 so would be the ultimate target though I am not expecting us to get that low today.
For the bulls, a break above the 7500 level would lead to 7530 as mentioned, but they would be looking to break that and pull away from 7500 really, to target the 7575 level where we have R2 and has been a key level previously. The FTSE100 has actually been quite resilient recently, even with cable climbing back over the past few sessions towards the 12500 level.
S&P500
Nice climb off the Hull MA yesterday at 3910 and that line has dropped down to 3906 for today with a potential second test of that this morning. S1 is at 3909 so the bulls would certainly be keen to defend this area. The pivot looks like playing the resistance part today at 3947, so the bulls will need to break that to get a rise towards the 3984 level for R1 and also the high yesterday. A break of that and we would likely see 4000 tested with 4022 R2 the key level to watch up there.
A break of 3909 and 3871 would probably be seen. Let’s see if they defend 3909 today if it gets that low, but also 3925 for the key fib support to start with!
Dax40
14006 is support to start with as we have the key fib and S1 level here, combined with the round number. If the bears break below this then 13911 is next up though a slide (and pretty bearish day!) towards 13800 may play out to test the S3 and bottom of the 10d Raff. For the bulls they will be looking to break above the 14150 level as we have the red 30m coral here, with 14206 key fib resistance above that. A fib to fib testing day would be good with a bounce off both of them.
Good luck today.
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