Quote from Nick on 30th April 2020, 8:42 am

FTSE 100 live outlook prediction analysis for 30th April 2020

• The US economy shrunk by 4.8pc in the first quarter, its fastest contraction since the 2008 financial crisis
• Despite that, markets pushed higher with the FTSE 100 entering  a technical bull market
• Gilead said its experimental drug to treat coronavirus helped patients recover faster, which boosted equity bourses.
• Barclays took a £2.1bn hit from bad-loan charge, offsetting strong trade performance
• Next sales fell 41pc in first quarter, as the retailer warned of challenges ahead

The FTSE 100 broke back into bull market territory on Wednesday amid a wave of optimism that the coronavirus crisis may be nearing an end, up 20pc from the lows hit during last month’s global share price collapse. Hopes of a treatment for Covid-19 and a slew of better-than-expected results for London-listed businesses pushed the blue-chip index up by 2.6pc, putting it back above 6,000 points for the first time since March 11.The rise brings to an end a bear market that lasted only seven weeks - but analysts have cautioned the ride may not be over as fears grow over a long-lasting recession.

The FTSE 100 closed at 6123.30, up 2.77%, or 164.8 points.

An extraordinary worldwide wave of policy action by governments and central banks appears to have been enough to stifle an explosion of chaos on global markets, which collapsed in March and sent the FTSE 100 down as much as a third.  The British market has lagged peers in rejoining the bulls. Continental Europe's Stoxx 600 passed the threshold more than a week ago, while the S&P 500 did the same in early April.

Gilead said early results from a US-government-run study showed its experimental drug to treat coronavirus helped patients recover more quickly than standard care, suggesting it could become the first effective treatment for the infection.

Recovery illusion
Perhaps this rally is just a brief rise in the middle of a larger, longer overall market crash. Maybe it is unique as it is fuelled not by market demand and consumer spending but rather by governments and central banks flooding economies with cash.

Drug Rush
The Trump administration is planning “Operation Warp Speed,” a Manhattan Project-style effort pulling together private pharmaceutical companies, government agencies and the military to try to cut the development time for a vaccine by as much as eight months, according to two people familiar with the matter. As part of the arrangement, taxpayers will shoulder much of the financial risk associated with failed vaccine candidates, instead of drug companies. Meanwhile, Gilead said its experimental treatment remdesivir helped patients recover faster, sending stocks higher. It also prompted Anthony Fauci, the U.S. government’s top infectious-disease expert, to call the result “quite good news”. New York reported a fourth day of declining deaths, and elsewhere, France and Spain took cautious steps toward lifting restrictions. New cases rose for the first time in three days in Germany as the government weighs removing more curbs. Around the world, cases have now topped 3.1 million, with deaths surpassing 226,000.[Bloomberg]

Trade-Off Time
The world economy is entering a new stage of the coronavirus crisis as governments inch toward easing restrictions. It’s a phase that entails stark trade-offs between economic growth and risking another wave of infections and death. Some countries, like China and South Korea, are firing up their economic engines already, having contained the virus — for now at least. Others, including hard-hit Italy and the U.S., are preparing to reopen their wounded economies even as they fight to get a lid on infections. It’s clear that the longer the lockdowns endure, the steeper the economic blow. But China’s experience demonstrates reopening won’t happen overnight — March data showed production was recovering but consumers remain wary. Meantime, Singapore presents a cautionary tale for those reopening. The city-state has seen a second wave that’s prompted stricter and extended restrictions, with an accompanying deeper blow to the economy anticipated. [Bloomberg]

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

Asian stocks rose on the final day of the month amid optimism from corporate results and signs of progress in treating the coronavirus. The dollar recouped some of this week’s retreat.

Was a fantastic bounce off the 5959 support level yesterday and despite poor data later in the day with US GDP being the worst since the greta depression, we saw a large rise across the board, and in fact the FTSE futures have tested the 6200 top of the 10 day Raff Channel overnight. The S&P has also got up to its higher resistance zone at 2970-3005 overnight, and may start to falter soon. Is this all just a massive dead cat bounce and we get another leg down? The UK lockdown looks set to continue for longer, with the associated economic impact continuing.

For today the bulls will need to break above 6205 (quite nice to be back in the six thousand levels again) as that opens up a test of the daily resistance above the Raff channels at 6285, but we may well see a stutter here. We also have R2 at 6319 should they push on a bit further. The ASX200 had a bullish session after the rises yesterday here and in the US and the bulls here might have a bit more left in the tank. They have certainly managed to pull away from the 6000 level!

Yesterdays close provides the first support level at 6125 so we may well see a gap dip down to there repeating yesterdays pattern before some more upside towards the 6285 level. Just depends if the bulls still have some appetite left, but it will pay to start being a bit more cautious if you are bullish as we are at or near some pretty key resistance levels. I expect the S&P will want 3000, just for positive headlines and psychological reasons (and probably to suck in some more "mom and pop" investors who will be buying at the top. Again.)

So for today I am looking at initial resistance at the 6205 level then 6285, with an outside chance of R2 at 6319. For support I am looking at 6125 initially, with 6042 below that then 5950.  Good luck today.

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