FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 rallied on Friday to erase weekly losses, aided by gains in defensive stocks, although concerns over stubborn inflation and economic slowdown kept sentiment in check. The blue-chip index added 2.6% to 7,418. Banks and defensive sectors including consumer staples and healthcare stocks that tend to be less sensitive to the economic climate boosted the benchmark index.
US equity futures fell and stocks wavered Monday as poor Chinese economic data fueled concerns about the global outlook.
An Asia-Pacific share index came off sessions highs, the dollar firmed, Treasuries rose and oil slid, pointing to a fresh bout of investor caution.
The Chinese figures showed that industrial output and consumer spending slid to the worst levels since the pandemic began, hurt by Covid lockdowns.
Officials are taking measured steps to help the economy: China effectively cut the interest rate for new mortgages over the weekend to bolster an ailing housing market, but the one-year policy loan rate was left unchanged Monday.
In the bond market, the 10-year US yield dropped below 2.90%. A key question now is whether economic worries will help stem this year’s Treasury selloff, which has been driven by inflation and tightening US monetary settings.
Cryptocurrencies dipped as the mood in stocks weakened. That took Bitcoin back toward the $30,000 level.
What to watch this week:
- New York Fed President John Williams speaks Monday
- Fed Chair Jerome Powell among slate of Fed speakers. Tuesday
- Reserve Bank of Australia releases minutes of its May policy meeting. Tuesday
- G-7 finance ministers and central bankers meeting. Wednesday
- Eurozone, UK CPI. Wednesday
- Philadelphia Fed President Patrick Harker speaks. Wednesday
- China loan prime rates. Friday
‘Very High Risk’
Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to prepare for a US recession, saying it’s a “very, very high risk.” Blankfein’s comments came as the firm’s economists cut their U.S. growth forecasts for this year to 2.4% from 2.6%, and reducing its 2023 growth estimate to 1.6% from 2.2%. A monthly survey of economists by Bloomberg put the probability of a recession over the next 12 months at 30% — double the odds predicted just three months ago.
FTSE 100 live outlook prediction analysis for 16th May 2022
Well we certainly got the relief rally on Friday and the potential exists for the S&P500 to push up towards the 4100 before too long. Poor Chinese data overnight has upset the apple cart a little bit but we may well see a bullish Monday today, especially if the FTSE100 bulls can defend the daily pivot initially at the 7363 level. The S&P bulls will be looking to defend the green 30m coral at the 3990 level and also to keep the price above the 4000 (and pull away from).
Cable has bounced back a bit (which will weigh on the FTSE100) with the 120 level being the next key support. There is also the potential for a rise towards the daily coral at the 128 level though as well.
Back to the FTSE100 and as mentioned the initial support is at the daily pivot 7363, though a move lower will likely get as low at the 7315 level where we have the 200ema on the 30m. That would be a retrace of Fridays move, and could act as a decent springboard for the next leg up. The 2h Hull MA is rising steadily and could meet any price drop around the 7315 level as well as today plays out. The coral on the 2h has also gone green for the first time in a while (shows an uptrend).
Initial resistance is at the 7500 level where we would have the first test of the now red daily coral, along with the R1 level and also the top of the 20d Raff channel. The bulls will be keen to break above this though it being over 100 points from where we are as I write this it maybe a big ask, especially after the rally on Friday. Fear and caution are still loitering in the background. Stagflation, shrinkflation, recession and a few other buzzwords all still being bandied around!
Prior to the 7500 level then Fridays high at 7440 (though we gap opened above that last night) and the 7476 being the overnight high are the other two resistance levels to look for. Above 7500 then 7557 is and 7579 are the other 2 – don’t expect to see them today but then again…..
Looking therefore like a bit of a dip and rise may well play out today – just need the US bulls to play ball and push the S&P up and away from 4000.
S&P500
A potential rise towards the 4100 level for this week to start with, though also a drop down to test the 2h support at the 3940 level! Those are the 2 main levels to look for in the short term
Dax40
Again a dip and rise may well play out on this with a move down to the S1/200ema and key fib around the 13800 area. The daily pivot offers some initial support at the 13934 level as well, but a break of that will likely get the bears going. The 2h coral has gone green and rising steadily with the 13700 approx area coinciding with a price drop. Overnight its just tested the top of the 2 Raff channels at the 14125 level and hence we are dropping back from there first thing. Up to the bulls to defend today!
Good luck today!
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First support level tested and held for the #ftse #ftse100 at 7365. Nice bounce. Bulls need to break 7450 to target 7497 now
Decent hold of the 3990 S&P500 as well