FTSE 100 live outlook prediction analysis for 1st October 2020
A good bounce on the FTSE yesterday from the 5855 support level and the bulls managed to get all the way to 5935 before we dropped back. The S&P remains choppy though, as the bulls pushed for the 3395 level before a 50% retrace. Still looks like it will manage the top of the Raff, around 3420 today, possibly helped by some new month money along with further US stimulus hopes. The main points from yesterday:
- US private payrolls rose by 749,000 last month
- Second quarter GDP slumped 19.8pc – slightly better than feared
- European stocks fall after US presidential debate descends into acrimony
- Shell plans to cut 7,000 to 9,000 jobs by the end of 2022
- William Hill accepts takeover offer from Caesars
- TSB closes hundreds of branches
- UK house prices hit new high as rebound continues
The FTSE 100 has lost ground in the last half hour of trading to end about 0.5pc lower at 5,870 points. Rolls-Royce took the wooden spoon with another 7.4pc slide to a new record low of 130p, valuing the company at just £2.5bn. British Airways owner IAG made up a little bit of ground to be the biggest riser, up almost 4pc. The mid-cap index had a better day than its blue-chip counterpart, ending 0.8pc higher at 17,315 points.
Cut Loose
Goldman Sachs is resuming job cuts as the pandemic outlasts the financial industry’s resolve to offer jittery employees stability. The firm plans to eliminate about 1% of its workforce, or roughly 400 positions, according to people with knowledge of the matter. The move comes even as the firm’s core trading and dealmaking businesses are booming. Persistent coronavirus outbreaks in the U.S. are forcing the nation’s biggest banks to re-examine plans to wait out the turmoil, with Wells Fargo and Citigroup among the first to restart cuts after their stock prices slumped and they face looming souring loans. The Goldman layoffs are among tens of thousands of job cuts announced by blue-chip companies in a 24-hour period — a warning sign for the world’s economic recovery.
The Real Work Begins
The best is already over for the global economic recovery. That’s the warning from Wall Street economists heading into the final months of a traumatic year. Some $20 trillion of stimulus from governments and central banks has pulled the world’s economies almost back to pre-pandemic levels. But the last stretch is set to be the hardest. Policy makers could dial back the fiscal support that’s been key to recovery — as they’ve already done in the U.S. — and temporary job cuts may harden into permanent ones. And the virus itself is spreading, forcing governments to reimpose lockdowns. The risks have made investors less bullish than they’ve been since the early weeks of the coronavirus crisis. The S&P 500 Index declined in September after five straight monthly advances, and Europe’s Stoxx 600 also pared gains.
Tepid Markets
Asian stocks were set for modest gains at the start of the year’s final quarter though volumes may be subdued Thursday with many markets closed for holidays. U.S. shares earlier finished higher after a volatile session. Futures in Japan and Australia climbed. The S&P 500 Index earlier climbed 0.8%, paring gains of as much as 1.7% after Treasury Secretary Steven Mnuchin said there had been no agreement on pandemic relief, though talks would continue. Speculation a deal was in the works kept the benchmark at a two-week high. The dollar declined and Treasury yields ticked higher. Markets in China, Hong Kong, Taiwan and South Korea are shut for holidays.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The dollar fell and the offshore yuan advanced as signs of potential progress in U.S. fiscal stimulus talks buoyed traders, though holidays in Asian markets risked amplifying moves. American equity futures rose after a volatile session on Wall Street.
Stock trading in Asia was hit by the worst breakdown ever in Japan that prevented trading taking place on Thursday. Shares in Australia and Singapore rose about 1.5%. China, Hong Kong, Taiwan and South Korea are shut. S&P 500 futures climbed.
Yesterday panned out well, and if the S&P can crystallise its gains we should see a rise towards the 3420 level next. As we have the start of the new month, we may get a new month kick up to help the start of the month and quarter. September’s new month money kick up was non-existant but markets looks a bit stronger now. For the FTSE I am still looking at a rise towards the 5980 level, and we have the 10 day Raff channel at 6004 so a test of this area would make sense. The bulls had the upper hand yesterday and defended against the end of month profit taking, so won’t want to see that work undone.
Initial support is at the 5879 daily pivot, though we have the 30min coral just below that at 5871. If the bulls can defend this then we should see a decent rise though they will need to break the 2 hour resistance at 5908 initially. Below the 5870 level then we will likely see a slide down to the fib and S1 level at 5825, and if we get really bearish the 5757 support level is still untested. That said, I am swinging more to a rise today, especially towards the 5935 level initially which was yesterdays high. Buy the dip today feels the better play.
For the bulls, I have already mentioned a few resistance levels but a break of the 6004 level would really get them going, and a rise towards the top of the 20 day Raff channel at the 6100 level would likely play out.
Not too much more to say really, expecting a rise really and buy the dip today. Good luck!
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