5th January 2017
Markets continued their strong start to 2018 yesterday with rises across the board, though the FTSE 100 lagged a little bit compared the strength of the rises in the US and on the Dax. Long at 7675 worked out well though.
The private ADP report showed U.S. employment strengthening yesterday. The Dow surpassed 25,000 for the first time, while the S&P500 Index and the Nasdaq reached all-time highs. Trading in S&P 500 stocks wasn’t slowed by the storm lashing the U.S. East Coast, with volumes above their 30-day average.
The focus today is on the NFP payrolls out at 1330 – likely to beat estimates if yesterdays ADP news is any guide. The US economy probably added 2.11 million jobs in 2017, including an estimated 190,000 workers in December.
FTSE Outlook and Prediction
NFP Friday at the end of the first weeks trading so a bit of caution required as it usually is on NFP days. I expect the news is going to beat the forecast of 190k, as ADP was positive yesterday. Unemployment in the US is likely to stay at 4.1% while wage growth might have slipped a bit. Continuing good jobs news means that the jobless rate is below what the Federal Reserve regards as sustainable and employers are struggling to find quality applicants to fill openings, which is worth bearing in mind going forward.
Asia has ended the week strongly, and the ASX200 has managed to hold on to its gains above 6100, though wasn’t able to reach R1. The FTSE has been a bit lacklustre compared to the other markets, so resistance levels for today are relatively close – 7707 which is the recent high, then 7722 above that. There is a chance that we see buy the rumour, sell the news and a move up to 7739 where we have a key fib level for today.
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