Good morning. Well the long off the pivot finally managed to get some points in the end – it looked a little dubious for a while. I fully closed it last night just before the 9pm US close at 6770. Overnight it hasn’t really done much, though there is some good support where we currently are – the bottom of the 10 day Bianca at 6771 and the daily pivot at 6770, so if they hold we might well get another leg up to 6790. The US raced ahead yesterday, as did the Dax, but the FTSE was seriously lagging. Will the FTSE catch up today or will the others drop back?
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for a two-week advance, after reports from U.S. housing to manufacturing showed the world’s largest economy is strengthening.
The MSCI Asia Pacific Index added 0.2 percent to 148.72 as of 11:58 a.m. in Hong Kong, on course for a second week of gains. The gauge has risen 0.5 percent this week and is trading within 1 percent of a six-year high as investors await clues on the timing of U.S. interest-rate increases from Federal Reserve Chair Janet Yellen, who speaks today at a Kansas City Fed conference inJackson Hole, Wyoming.
“Data was solid,” said Evan Lucas, a Melbourne-based markets strategist at IG Ltd. “U.S. home sales smashed estimates and held true month-on-month, while the Philly Fed manufacturing index also was stronger than estimated. This all gave the market another reason to continue to leg up.”
Hong Kong’s Hang Seng Index (HSI) rose 0.4 percent. The Hang Seng China Enterprises Index and South Korea’s Kospi index gained 0.6 percent. China’s Shanghai Composite Index climbed 0.2 percent. New Zealand’s NZX 50 Index rose 0.3 percent and Singapore’s Straits Times Index added 0.2 percent.
Australia’s S&P/ASX 200 Index (AS51) advanced 0.3 percent as Iluka climbed 3.4 percent to A$8.88 and Santos rose 3.8 percent to A$15.14. Taiwan’s Taiex index rallied 1.2 percent. Japan’s Nikkei 225 Stock Average and the Topix index both slipped 0.3 percent.
Record Close
Futures on the Standard & Poor’s 500 Index added 0.1 percent today after the gauge yesterday closed at a record high. After beginning August with the worst weekly decline in more than two years, U.S. equities have since recouped almost $900 billion in value, bolstered by easing tensions in Ukraine and speculation that central banks will keep interest rates low even as the economy shows signs of recovery.
While a report in the U.S. yesterday showed fewer Americans than forecast applied forunemployment benefits last week, tepid wage growth and slow inflation have given the Fed room to hold interest rates near zero.
U.S. Manufacturing
Data yesterday also showed existing home sales rose last month to the most since September, while the Conference Board’s gauge of the economic outlook for the next three to six months increased 0.9 percent. The Markit Economics preliminary index of U.S. manufacturing in August jumped to the highest level since April 2010.
FTSE Outlook
We are not far off opening right on a couple of supports – the daily pivot at 6770 and the bottom of the 10 day Bianca at 6771. I can see a rise to 6791 today, but if the bulls do go for it, most likely fuelled by Yellens speech later to maybe push the S&P past 2000, then we could reach the top of the 20 day Bianca area at 6822. Above that, and the next resistance levels are 6839 then 6900. The S&P might stutter at 2003 if it were to break 2000. The trend is up though its a bit concerning that the FTSE was so laggy yesterday. If the FTSE were to break below 6770 today and that fairly key support, then 6740 and 6720 are the next supports.