Quote from Nick on 3rd March 2021, 10:27 am

FTSE 100 live outlook prediction analysis for 3rd March 2021

The FTSE 100  remained solidly higher yesterday and has gained further overnight, outperforming moderate gains across its European peers. Meanwhile, Wall Street cooled off from Monday’s chunky gains, with the S&P500 staying below the 3900 level.

The next FTSE reshuffle is to be announced tomorrow (coinciding with the Spring Budget), based on today's closing prices. Here are the key contenders:

• WM Morrison Supermarkets  - likely to drop out of the FTSE 100
• TUI  - set to cast off pandemic woes and climb back into FTSE 100
• Engineering firm Weir Group – also likely to re-enter FTSE 100 as its mining refocus pays off
• South West water owner Pennon Group  - likely relegation from FTSE 100
• Dr Martens and The Bytes Group – set to enter the FTSE 250 after successful IPOs

Changes are effective after close on March 19.

Too Optimistic

Asian stocks looked set for a muted start after their U.S. peers retreated on concerns about excessive investor optimism. Treasuries climbed and the dollar weakened. Futures were little changed in Japan and Australia. Technology shares led losses in the S&P 500 Index as Apple and Tesla dragged down the Nasdaq 100. Benchmark Treasury yields dipped amid comments from Federal Reserve Governor Lael Brainard that bond-market volatility may further delay a pullback in the central bank’s massive asset purchases. Oil fell further below $60 a barrel.

Bubble Trouble

China's cheap and plentiful debt has given already fretting investors another reason to worry. China's top banking regulator jolted markets on Tuesday, warning investors there is a need to reduce the amount of debt on the books or the bubble could burst. China’s largest stock has lost more than $100 billion in nine days. Central banks around the world are facing the challenge of how and when to step back stimulus measures that have been used to support economic recovery amid the pandemic. Bubble warnings around the world just keep getting louder.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks climbed with U.S. and European equity futures Wednesday amid easing concerns that markets are too stretched and as the focus turned back to the stimulus-fueled recovery from the pandemic. Treasury yields edged up.

Indexes in Hong Kong and China outperformed. Shares rose in Australia, where data showed the economy maintained its rapid recovery in the final three months of 2020. S&P 500 and Nasdaq 100 futures advanced after technology shares led overnight losses in the benchmarks. The dollar was little changed.

Treasury yields had retreated Tuesday amid comments from Federal Reserve Governor Lael Brainard that bond-market volatility may further delay any pullback in the central bank’s asset purchases.

The V-shape recovery coming into sharp relief in Australia highlighted expectations for a global rebound that boosts earnings and supports the run up in stocks. At the same time, investors remain wary of a widespread jump in inflationary pressures that could shake confidence by undercutting pledges from central banks to keep monetary policy loose.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Budget day today, with the furlough scheme set to be extended till September to keep the unemployment numbers down, along with tax rises, mostly aimed at corporation tax, and some housing support likely too.

Overnight the FTSE has consolidated its gains from yesterday and built on the bounce off the 2hour chart support at 6560. Initial resistance is at the 6688 level where we have R1 and the key fib, and then the daily level of 6701 above that. Thats also just below the top of the 10 day Raff channel, and the daily coral, at 6712, so we may well see a bearish reaction here. The bears had a go at the 6650 level yesterday and there was a bit of a slide from it, but overnight strength has pushed through that level.

Above 6712 then there is R2 at 6728 and R3 at 6794, and not a lot else! As such if the bulls where to break the 6712 then it does look good for further upside. The S&P also continues to hang on, for a potential rise towards the 3909 fib level, and possibly the R2 level at 3925. The key looks to be the bulls defending the 2 hour support at 3870 though.

For the FTSE bears, the 30m chart is pretty bullish with 6650 now becoming support, and that ties in with the green coral there and a hold of the 25ema. Lower down the 2 hour chart remains bullish with support at 6583, and the coral has now also gone green at 6575. Should we drop that low then the bulls would like to see that 6575 level hold.

I am watching the top of the 10d Raff at the 6712 level to see the reaction there as that looks fairly key to start with today. Coupled with the daily resistance at 6701 I wouldn't be surprised if we get a rise and dip and then possibly another rise play out today. Also watch the 3920ish area on S&P for resistance.

Good luck for todays session.

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