FTSE 100 live outlook prediction analysis for 12th December 2019
This is not a fun general election for investors. Brexit has battered the pound, political uncertainty is seen as negative for businesses, and Labour’s manifesto contains a great raft of anti-enterprise proposals – from higher taxes, to nationalisations, to the seizure of shares. On top of that, stock markets are complicated beasts. The FTSE 100 is packed with global businesses earning most of their revenue overseas. By contrast the FTSE 250 is made up of smaller companies with a larger share of earnings made at home – making them more sensitive to the UK economy.
Today we will get an idea of which way it goes….. firmer results overnight/tomorrow.
Last-minute nerves ahead of the election led to widespread sell-offs yesterday, though sentiment had improved slightly by the closing bell. Traders were put on a edge by a closely watched survey released on Tuesday night, which said that the size of Boris Johnson’s projected majority had halved. That knocked the pound slightly, but it recovered during the day, recovering its losses entirely by the end of the London session.
Fed Not Budging
It looks like the Federal Reserve is set on sticking to the sidelines during an election year — it left interest rates unchanged and signaled it would keep them on hold through 2020 as long as the economic outlook doesn’t change. “The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the committee’s symmetric 2% objective,’’ the Federal Open Market Committee said in its statement Wednesday. The Treasury 10-year yields fell below 1.8%, the dollar declined and U.S. stocks edged higher as investors digested the news and comments during a post-meeting press conference by Chairman Jerome Powell, in which he said, “Both the economy and monetary policy right now are in a good place.”
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Here we are at Election Day after a few weeks of build up and the markets seemingly pricing in a Tory majority. That should see the FTSE 250 rise (this is more UK biased than the international FTSE100), cable rise, but maybe the FTSE 100 might not be quite as bullish (in theory as cable rises the FTSSE 100 drops). However there might be so much relief that Corbyn isn’t PM that everything will rise! More than £151 million has flowed into BlackRock’s iShares MSCI UK Small Cap UCITS ETF in the past three weeks, setting it on course for a record December and assets in the £343 million product have swelled by more than half this month. The bumper inflows are seen as a sign of confidence that a Tory government would benefit U.K. business through fiscal stimulus and a deal on Brexit.
Initially we have resistance at the 7252 level for R1 and yesterday’s high, but above this we have the cluster of daily resistance levels at the 7280 to 7300 area. If we do rise here we may see some money taken off the table at this point. The S&P held the lows yesterday and has risen steadily overnight to the point that the 2 hour chart is now bullish again, and a rise towards that 3165 level looks more likely.
Today is obviously going to be a little bit tricky, the exit polls data will start coming through later today, and as such a a bit of caution today is probably wise. Not that you need me to tell you that!
If the bulls were to break above the 7300 level then 7373 is the top of the 20 day Raff channel and a likely target for the bulls if they really get going.
On the support side of things, initially we have the 7215 area with the 30min coral and the 200ema, whilst below this, yesterday low at 7193, but more likely a test of the fib at 7178. Below this then it starts getting a lot more bearish looking, with that 7130 area likely to be tested. Below this then 7098 and then 7060 for the bottom of the 20 day Raff channel.
Keep watching the news today really but favouring a rise really for the FTSE 100, certainly towards the 7285 area initially.
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