FTSE 100 live outlook prediction analysis for 11th January 2021
Boris Johnson has appointed Kwasi Kwarteng as the new business secretary, replacing Alok Sharma. Mr Sharma will become the full-time president of the COP26 United Nations climate summit, where he “will solely focus on driving forward coordinated global action to tackle climate change”, according to a statement from the Prime Minister’s office.
Friday recap:
- US non-farm payrolls fell 140,000 last month
- America’s unemployment rate holds at 6.7pc
- FTSE 100 underperforms, flat after four-day rally
- No Christmas joy for Marks & Spencer as sales slide
- German industrial production rises more than expected
- House price growth slows to six-month low
- Pets at Home jumps after profit upgrade
More To Come
Banned from social media and abandoned by some staff after inciting a riot at the U.S. Capitol, President Donald Trump and a dwindling circle of advisers plan a defiant final week in office, according to people familiar with the matter. Trump is confident Vice President Mike Pence and members of his cabinet won’t attempt to remove him under the 25th Amendment, they say. The president and some allies also believe Democrats are overreaching by trying to once again impeach him, and think Senate conviction would be unlikely. Senator Pat Toomey, a former Trump ally, said the president had “spiraled down into a kind of madness,” while Arnold Schwarzenegger offered Trump his trademark parting message. “You are terminated, Mr. President,” he told Germany’s Bild am Sonntag newspaper.
Bubble Warnings
Throw a dart, hit a winner, so it has lately seemed in the stock market. Emboldened by Federal Reserve stimulus, vaccines and the psychological conditioning that arises when no bad patch lasts, everyone from retail newbies to institutional managers is rushing to cash in on the 10-month-old meltup. Of course, it’s possible that all of this could continue for weeks, if not months, without so much of even a little reversal. But bubble warnings are starting to blare from every corner. Meanwhile, emerging-market equities are on fire, with caution creeping into other risk assets as rising U.S. Treasury yields keep investors on edge.[Bloomberg]
US & Asia Overnight from Bloomberg
The dollar rose Monday and Asian stocks were mixed as traders weighed the implications of higher U.S. Treasury yields amid President-elect Joe Biden’s push for huge fiscal aid to fight the impact of the pandemic.
The dollar climbed a third day against major peers and Treasury futures were flat. Japan’s equity market is shut for a holiday and cash Treasuries won’t trade until the London open. An Asian share gauge fluctuated as South Korea turned lower after earlier rising as much as 3.6%. S&P 500 futures dipped.
U.S. stocks hit a record Friday after Biden said he’ll lay out proposals this week for trillions of dollars in fiscal support to fight the economic toll of surging virus cases. Oil pared some of last week’s jump and gold fell further.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We got the late Friday pump on the US markets which took the FTSE 100 up to the 6905 level and a double top with the 6am price. That also tallied with a test of the 100 Hull MA and the subsequent drop from there could see us have a bit more downside this morning. The S&P has also gapped down to 3800, after hitting 3830 on that late rise on Friday. The bulls will be keen to defend the 3800 level this morning as we have S1 and the fib level at 3795, whilst the 200ema is lower at 3774 as the next support area.
For the FTSE we are on S1 as I write this at 6850 and also the key fib here. As such we may well see an initial bounce up to the 6880 resistance level where we have the daily pivot and just above the red 30min coral and 25ema 30min. The bulls may struggle to break this area initially as the news flow is getting more negative though. Once last push up higher is possible as we head towards the Presidential inauguration on the 26th. Howreer, it does feel like markets are getting a bit toppy. One of the most widely used metrics to assess market valuations is a measure developed by the economist Robert Shiller. It averages corporate earnings over the 10 preceding years and compares the resulting number with the price of stocks. The Cyclically Adjusted Price Earnings ratio (CAPE) is higher now than it was at its peak in 1929 and not far off the record levels registered in 2000, just before the dotcom crash. So the warning lights are flashing.
Above the 6880 level then the 6928 level is next up where we have the 100 Hull MA on the 2 hour chart for today. That would also mean. break of the 6905 level which held twice on Friday – will the bulls have enough strength to break that high today? 7000 does remain as a target though – nice round number and the top of the 20 day Raff channel.
For the bears, initial support below 6850 is at 6830 where we have the 2h coral line (green) and they will need to break that to get the 6805 S2 level. The 200ema on the 30min is rising steadily and could well coincide with this level shortly hence thinking that if we do dip down to that then a rise from there may well kick in.
So, looking like a rise and dip initially, and we may well see the US buy their dip up later – 3800 and 3775 on the S&P being the key levels to watch. 6850 6805 are the main FTSE supports, 6880, 6926 for the FTSE 100 resistance.
Good luck today.
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