FTSE 100 live outlook prediction analysis for 28th April 2021
The FTSE 100 index at the close was down 18.15 or 0.26pc at 6944.97, while the FTSE 250 ended down 144.26 or 0.64pc at 22433.08. Was a pretty lack lustre day as we await the Fed minutes today from their two day meeting, along with Biden addressing Congress.
The Nasdaq was stuck lower as traders prepare for a big week of tech earnings, while the Dow and the S&P 500 were mostly flat – as investors await a monetary policy update from the Fed.
Vaccine Diplomacy
India’s neighbors are increasingly looking to China to fill the vaccine gapas New Delhi battles a devastating Covid-19 wave at home. In a blow to India’s vaccine diplomacy efforts, China’s Foreign Minister Wang Yi told his counterparts from Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka on Tuesday that Beijing is willing to provide them with supplies. Under mounting criticism for dominating resources, U.S. President Joe Biden said he intends to send vaccines to India, but did not specify timing. The moves show how vaccine nationalism has the potential to backfire, prolonging the global pandemic. Stockpiling has left supplies running short in places like India, where the virus has run wild. Some scientists have linked the nation of 1.3 billion people’s second wave to a more virulent strain.
Tech Drop
Asia stocks are set for a muted open as investors consider a raft of earnings from U.S. technology heavyweights. The dollar rose with Treasury yields. Futures were flat in Japan and rose in Australia and Hong Kong. The Nasdaq 100 dropped for the first time in three sessions, weighed down by declines in tech heavyweights including Tesla and Microsoft. Alphabet shares rallied in postmarket trade on stronger-than-expected quarterly sales. The S&P 500 Index closed little changed after swinging between gains and losses throughout the day. Bonds declined, with benchmark 10-year Treasury yields advancing back above 1.6% as the Federal Reserve holds its policy meeting.
Europe Versus China
The European Commission is seeking powers to levy fines or block deals by foreign state-owned companies in a thinly veiled response to the growing economic threat posed by China. The proposed new rules, obtained by Bloomberg, don’t mention China directly but try to answer complaints from European businesses that the nation’s firms get support they can’t match. Chinese business groups have already complained about the plans, which will need support from EU governments before they become final. The move adds to signs of increasing protectionism in Europe amid the steepest recession in almost a century. Meanwhile, European nations are looking to create their own “national champions.”[Bloomberg]
US & Asia Overnight from Bloomberg
Asian stocks held tight ranges Wednesday and U.S. equity futures edged up as Treasuries steadied from overnight declines ahead of the Federal Reserve’s policy decision.
Shares rose modestly in Japan, fell in South Korea and fluctuated in China. European and U.S. equity futures inched up as investors digested the latest earnings reports, after weakness in heavyweights like Tesla Inc. weighed on U.S. stock gauges.
Treasuries held losses that sent benchmark 10-year yields back above 1.6%. A surge in commodities including copper and wheat paused, but is fanning concerns about price pressures. Goldman Sachs Group Inc. analysts predicted commodities will extend their scorching rally over the next six months as the global economy rebounds from the pandemic.
The U.S. dollar extended an advance, while the Australian dollar fell after weaker-than-expected inflation data reinforced the view that monetary policy normalization will lag behind the Fed.
Bond yields are rising again as markets await updates on government and central bank stimulus, with U.S. President Joe Biden set to address Congress and the Fed delivering its policy statement Wednesday. Investors are watching for any signs of the central bank pulling back on asset purchases as the economy gathers strength, amid concerns that any withdrawal of support could trigger volatility in global rates and risk assets.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We may well see more of the rise and dip (buy the rumour sell the news) play out today ahead of the Fed later (19:00 for the rate decision, 19:30 for the press conference) though rates are unlikely to change. The S&P still looks like it has the potential to head towards 4200 and possibly past that and with R2 at 4212 and R3 at 4224 we may well see these tested. R1 is at 4200. Of course, the bulls need to hold the support though which is at the daily pivot to start with at 4188 and then the 2h coral at 4175 below that. Tentative long worth a go off this level.
For the FTSE, if the US does play ball we may well see us push up again and try for the 7000 level. 6995 is however initial resistance above the R1 level at 6978, and we have the top of the 10 day Raff channel at 7028 above that timing in with R3. I am thinking that the 6995 might see a reaction though, especially if it’s a slow drift up to that level.
The 2hour chart is weakening initially today though but the green coral is the line in the sand at 6930 for support – the bulls will need to defend this as a break below that will likely see the bears take it down to 6903 where we have S2 and the next round number. A move below that and we are back looking at the bottom of the 20d Raff channel at 6880. We also have the 25ema on the daily here so it would be a good level to hold. We are also coming into month end before the “sell in May and go away” mantra starts getting touted around. We may well see some more chop next month as well.
If the bulls were able to break above the 7030 level though then we should get a rise towards 7100 and possibly just past as the top of the 20d Raff channel is in this area as you can see from the daily chart.
So watching 6930 for support this morning, and 6980 and 6995 for resistance and a possible small dip, rise, bigger dip to play out. Good luck today.
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