FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 has closed higher driven by strong earnings updates from companies including Whitbread and Standard Chartered, although Sainsbury hit the bottom of the index after warning of a drop in annual profit due to the cost-of-living crisis. The blue-chip index ended 1.1% higher at 7,509, recording its strongest session in nearly three weeks.
The US economy unexpectedly shrank in the first three months of 2022, raising the prospect of a recession in a blow for Joe Biden. Output fell at an annualised rate of 1.4pc in its first contraction since Covid first hit two years ago. The fall confounded economists’ forecasts of a 1.1pc rise and will pile pressure on President Biden as he gears up for midterm elections in which the Democrats are expected to lose seats.
Asian shares pushed higher Friday on a jump in Chinese technology stocks, while U.S. equity futures fell after post-earnings slumps in Amazon.com Inc. and Apple Inc.
Speculation of a possible near-term easing in China’s crackdown on internet companies spurred a surge of about 10% in the Hang Seng Tech Index. China vowed to support the health of so-called platform firms.
There were also signs of progress toward tackling the threat of delisting from the U.S. that hangs over some Chinese companies. Meanwhile, officials urged efforts to meet growth targets as lockdowns hamper the nation’s economy.
European futures were in the green. But contracts on the S&P 500 and technology-heavy Nasdaq 100 retreated after Amazon projected sluggish sales growth and Apple flagged supply constraints. Both slid in extended trading Thursday, clouding the S&P 500’s best climb since early March.
Volatility in the currency markets moderated compared with the upheavals of a day earlier. The yen pared a tumble while staying near 20-year lows. The dollar was set for its best week since 2021 amid investor caution and as the Federal Reserve readies sharp interest-rate hikes to slow inflation.
Oil was near $105 a barrel. Traders are evaluating the prospect of a European Union ban on Russian crude in retaliation for the invasion of Ukraine.
Markets continue to be whipsawed by the corporate earnings outlook, tightening U.S. monetary policy, the war in Ukraine and China’s Covid outbreak. All those factors herald more challenges for investors.
China Ties
Russia’s war on Ukraine has triggered a profound reassessment in European capitals of their individual and collective relations with China. Confronted by the need to rapidly unwind a dependence on Russian energy built up over decades, government officials from Rome to Prague are re-evaluating the extent of their economic and political ties to Beijing. Meanwhile, U.S. President Joe Biden is seeking another $33 billlion from Congress for aid to Ukraine; Germany is preparing for Russia to turn off the gas and Kyiv was hit by two missiles.
FTSE 100 live outlook prediction analysis for 29th April 2022
The bulls fought back well yesterday, especially the USA from the 4200 level on the S&P500 and managed to get 4300 despite the poor data and results. Recession fears were shaken off, and despite Amazon’s 10% drop on results the bulls hung onto the gains.
That also helped to underpin the FTSE100 and we are nearly back at the 7600 level this morning. As such, buy the dip today should play out again, though as its Friday its worth being a bit more cautious. Initial resistance is at the 7578 level which was yesterday after hours high, and then R1 at 7595. Above that then the 7645 level is the next level of note. We are also testing the top of the 10d Raff channel at the 7580 level to start with, which is why we may well get an initial drop down to the daily pivot at the 7515 level.
Above the 7645 level then R2 would be the next one to watch for at 7657 though I am not expecting us to get that high today. Especially as we are going into a long weekend in the UK with Monday bank holiday.
Below the 7515 level the bears would be looking to the daily support at 7470 and then 7435 below that. I don’t think we will see either of these today as the bulls will be keen to hold onto the 7500 level today.
S&P500
The S&P500 seems to be setting up for a range play for a while between 4200 and 4300 and its worth keeping an eye on those two levels. We may well get a breakout (probably up) in early May. 4310 is R1 for today so should we see that we could see the bears have a go here. Both the Raff channels are heading down though so the trend remains bearish, though the bulls are fighting back a bit at the moment. 4249 is the daily pivot and the initial support for today. As with the FTSE we may well see a dip to the pivot and then a bounce. Will we get the late Friday pump yet again today?
Dax40
Similar story for this. It’s on R1 as I write this and we may well see drop down to the pivot at 13965 to start with. The bulls will be keen to defend the 14000 area I expect so we could then a decent bounce back towards the R1 level. Again the Raffs are heading down and the Dax does seem to be mirroring the S&P500 quite well at the moment. The daily pivot also coincides with the 30m 200ema as in theory if that is tested then it should get a decent reaction. 13878 is the key fib below that as the next main support. Above R1 then R2 and the 10d Raff channel coincide at 14325 so worth keeping an eye out for that as well.
Good luck today and have a great long weekend – no email on Monday due to the bank holiday. As its Friday it can be a bit of a weird one so be a bit more cautious today.
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