FTSE 100 live outlook prediction analysis for 22nd September 2020
Well that was a bit more bearish than I thought it was going to be! Panicked traders wiped more than £50bn off Britain’s blue chip companies on Monday as pub and restaurant chiefs begged for more support ahead of a fresh Covid crackdown. The FTSE 100 dropped 3.4pc, with £51bn knocked off its vale on the index’s worst day since mid-June. The fall was part of a market rout across Europe after rising coronavirus cases sparked fears that politicians will impose another round of economically crippling lockdowns.
Airlines, pub chains, housebuilders and banks all fell sharply as investors bet that Britain will be hit by tough new rules to minimise social contact, wrecking a rebound in activity following the deepest recession for decades.
Prime Minister Boris Johnson is expected to order pubs to shut from 10pm each night as part of a package of measures to be announced on Tuesday.
A fortnight-long “circuit break” lockdown could also be introduced in coming days to slow transmission.
Industry chiefs pleaded with the Government to offer fresh help so battered pubs and restaurants can survive. They warned that mass job losses are inevitable without an extension to the taxpayer-funded furlough scheme, which is still supporting 900,000 roles in hospitality.
Vaccine Advance
An $18 billion initiative to deploy future Covid-19 vaccines around the world is moving into the next phase with 156 countries and regions taking part in the program — but China and the U.S. are staying on the sidelines, at least for now. Thirty-eight governments are expected to sign up to the Covid-19 Vaccines Global Access Facility, or Covax, in the coming days. The goal of the program is to have 2 billion doses available by the end of 2021. Countries that have already snapped up future supplies will have an opportunity to hedge the risk of backing unsuccessful vaccine candidates, while the program offers a lifeline for poorer nations that can’t otherwise afford vaccines. Beijing has focused on cutting one-on-one deals for vaccine doses and a number of other countries including the U.S. are crafting their own deals to obtain vaccines, sparking concern that poorer regions will be left behind.
Long and Uncertain
Federal Reserve Chair Jerome Powell said the U.S. economy is improving but has a long way to go before fully recovering from the coronavirus pandemic. “Many economic indicators show marked improvement,” Powell said Monday in the text of testimony he’s scheduled to deliver before the House Financial Services Committee on Tuesday. “Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain,” he said. In his testimony, Powell repeated earlier remarks that more is required from both fiscal and monetary policy to prevent the pandemic from causing long-term damage to the economy.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks dipped on Tuesday after U.S. equities slid on concerns over coronavirus restrictions and prospects for economic stimulus. The dollar was steady after posting the biggest gain in three months.
Benchmarks fell in Australia and South Korea, while Hong Kong and China pared declines. S&P 500 futures fluctuated. Financials as a group were the second-biggest contributors to losses on the MSCI Asia Pacific ex Japan Index following a report about suspicious worldwide banking transactions.
After the significant falls yesterday on further lock down fears, we may see a bit of consolidation today and a possible rise towards the pivot at 5875, and the fib at 5911. The S&P broke though the bottom of the 10 day Raff channel yesterday at 3260, and tested the longer term suport at 3230 which held well and saw a decent bounce back to the 3300 level overnight. The bulls will need to break above 3295 today to target 3337 on that next, and if they do so that should help pull the FTSE 100 up with it. That higher resistance is the 2 hour coral (and its falling but we may well get to the 3330 level today – and a 100 points up from yesterdays low) so a rise to this looks possible.
Further measures in the UK also include a 10pm curfew but the markets were spooked by the economic damage that remains in the future from these measures. The measures are almost worse than the virus!
For the FTSE, we have initial support at 5814 from the key fib level , with the 30min coral just below that. It is still red for the moment,but we are above it so any strength today and that should turn green and become support. Bodes well for a swing back up. Below the 5800 level then the next fib is at 5792, and I am thinking that if we get an initial dip down to this 5800 area we may well see a slow climb during today from that level. Certainly towards the pivot at 5875, and then possibly a bit higher. Should the bears break below 5790 though and we are back testing the 10 day Raff at 5780, then S1 at 5740 looks pretty likely to be tested. A possible long at this area is probably worth taking.
For the bulls, if we do rise, then as mentioned 5875 and 5911 are the main levels to break initially, but we do have the red coral on the 2 hour at 6011 (but dropping) as a possible upside target. At the end of the day the markets needed to pull back a bit to enable them to push higher, reduce the overbought conditions and also wipe out a few bulls in the process. Cycles and waves as always!
Above 6011 then the daily coral is at 6061 now, and then 6106 R2 above that. Might be a big ask for today though to push much past 6000.
Looking at a bit of a slight bullish consolidation day today really and a rise during most of it. Good luck today.
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