FTSE 100 live outlook prediction analysis for 28th October 2020
- CBI survey shows retail sales dropping at fastest pace since June – Retail sales fell in October as the second wave shut down demand for clothes shops and department stores again
- European markets extend losses after Monday’s drop
- US stocks trade flat
- HSBC could start charging for current accounts as profits plunge
- BP returns to profit after worst quarter
- Premier Inn owner sinks to £725m loss as Covid bites
Covid-19 Fatalities
Governments across Europe are seeking to tackle rising infections while avoiding full-scale lockdowns, as the U.K. and France reported the most coronavirus deaths since May and April respectively. Italy and Greece posted record numbers of new cases. American Covid-19 hospitalizationshave risen at least 10% in the past week in 32 states and the nation’s capital. New York Governor Andrew Cuomo is seeking to keep 95% of the U.S. out of New York. Pfizer CEO Albert Bourla said the company may know by the end of October whether or not its vaccine is effective. Eli Lilly said a U.S.-run clinical trial of an antibody therapy will end.
Market Open
Stocks in Asia looked set to open lower after a retreat in U.S. equities, with lingering concern about the impact of the worsening pandemic on economic activity in some parts of the world. The dollar edged lower. Equity futures in Japan and Australia dipped, while those in Hong Kong rose. The S&P 500 Index declined modestly, though tech shares eked out gains on Advanced Micro Devices’s $35 billion takeover of another chipmaker. Treasury yields dipped and Bitcoin rose past $13,500.
‘Enormous’ Confrontations
Relations between the world’s two largest economies will deteriorate further no matter who wins the U.S. presidential election, according to Ian Bremmer, who heads the risk consultant Eurasia Group. U.S. criticism of Beijing’s detention of Uighurs as well as disagreements over Hong Kong, Taiwan, the South China Sea, intellectual property, trade and technology will escalate under the administrations of Joe Biden or President Donald Trump, he said. “There will be an enormous amount of confrontation and no trust between the U.S. and China, even if Biden becomes president,” Bremmer said in a phone interview. Meanwhile, pollsters say Trump’s reliance on rallies may only be cementing his electoral defeat.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
U.S. equity futures fell with most Asian stocks as concern lingered about the impact of the worsening pandemic on economic activity in some parts of the world. The dollar rebounded against major peers.
Shares dropped in Japan and Hong Kong, while China and Australia edged up. S&P 500 futures retreated and European contracts were down about 1.5%. Microsoft Corp. shares slipped in extended trading as a forecast for revenue in some divisions fell short of the highest analysts’ projections.
The second half of October has gone a bit bearish across the board as the second wave gathers pace and the economic impact starts to manifest itself. Coupled with the US election looming we are seeing an end to the recent bounce. To start with today the FTSE is on the daily support level at 5690 as I write this and we saw a small bounce from this level overnight. As such if this holds initially, then we may well see a rise towards the daily pivot at 5736. Above this then the bulls will be aiming for the bigger picture resistance at 5772-5785 area where we have the fib level, 200ema on the 30min and R1 for today. Above 5785 then the bulls may well regain the upper hand and we get a rise towards the top of the 10d Raff channel at 5857. I think that might be a bit optimistic for today though.
As mentioned, a break of 5690 will likely see a slide down to the 5620 level or just below as we have S2 at 5610 and also the bottom of the 10 day Raff channel here. There is also the 20day Raff channel at 5660 though so I am also watching this level for a reaction. Below this and then the bears will have full control and a slide down to the 5200 level looks possible. The virus news flow is pretty negative at the moment and we may well see more draconian lock downs across the country. An analysis of the projected course of the second wave is understood to show deaths peaking at a lower level than in the spring but remaining at that level for weeks or even months. It is understood that the projection – provided by the Scientific Advisory Group for Emergencies (Sage) – has led to intense lobbying from Sir Patrick Vallance and other Government advisers for Boris Johnson to take more drastic action.
For the S&P it’s just retesting Monday’s low as I write this at 3365 so we could see a double bottom bounce – albeit a small one on this initially today. The bulls will need to break 3400 though to start gaining control as we have 2 hour resistance here.
So looking at 5690 and 5655 (20d Raff) and 5620 as support, 5736 5775 as resistance for today. Good luck today, remember its a good week to be doing lower stakes and staying nimble.
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