FTSE 100 live outlook prediction analysis for 15th April 2021
Fed chair Jerome Powell has said the US economy is entering a period of quicker economic expansion, but that risks remain from a potential spike in coronavirus cases. He added it would be wise to keep wearing masks and stay socially distanced for a while longer. The Fed has pledged to maintain aggressive monetary policy support, even as the economic recovery from the pandemic picks up speed, helping to power US stocks to fresh highs. Meanwhile, vaccinations are spreading and the economy reopening, while employers added 916,000 jobs in March.
Three of of big Wall Street banks reported their first-quarter numbers today. Here’s a round-up:
- JP Morgan sailed past Wall Street expectations by reporting a nearly 400pc increase in quarterly profit. The gains came from JPMorgan releasing more than $5bn it had set aside to cover potential coronavirus loan losses that have not materialised. JPMorgan boss Jamie Dimon (who was very scathing about Brexit last week) said individuals and businesses were ready to start spending and investing. “The consumer has so much money to pay down their credit card loan, which is good,” he said. Its shares fell 1.1pc.
- Goldman Sachs shares rose 3.3pc after it reported a massive jump in first-quarter profit, capitalizing on record levels of global dealmaking activity. Unlike JPMorgan, Goldman’s results did not benefit from a release from its loan-loss reserves of any significant amount.
- Wells Fargo bounced back to a profit of almost $5bn in the first quarter of 2021, ahead of estimates as it reduced bad loan provisions and got a grip on costs. The fourth-largest US lender cut its allowance for credit losses by $1.6bn.
Fed Direction
The Federal Reserve will likely taper off its bond purchases before considering raising interest rates, Chair Jerome Powell said. “We will reach the time at which we will taper asset purchases when we’ve made substantial further progress toward our goals from last December, when we announced that guidance,” Powell said Wednesday. “That would in all likelihood be before — well before — the time we consider raising interest rates.” Policy makers will wait until inflation has reached 2% sustainably and the labor-market recovery is complete before considering lifting rates, and the combination is unlikely to happen before 2022, he said. Their forecasts last month signaled rates being held near zero through 2023.[Bloomberg]
US & Asia Overnight from Bloomberg
Most Asian equities dipped Thursday after U.S. indexes eased from all-time peaks, with the drop in cryptocurrency exchange Coinbase Global Inc. overshadowing strong bank earnings. Oil trimmed earlier gains.
Shares fell in Hong Kong and China as the central bank effectively drained cash from the financial system, adding to concerns about tightening liquidity. Tech stocks also struggled. Japan and South Korea edged higher. U.S. futures fluctuated after Coinbase traded down in its Nasdaq debut. Bank stocks gained overnight on revenue windfalls for the likes of Goldman Sachs Group Inc.
The dollar inched upward after three straight days of losses, and the benchmark 10-year Treasury yield held around 1.63%.
In Asia’s session, investors are also watching for further tremors from the sharp selloff in the bonds of distressed-debt enterprise China Huarong Asset Management Co., which has pushed investment-grade spreads higher.
With equities hovering around record levels, traders are watching the earnings season for further catalysts. Expectations for a strong profit rebound have buoyed indexes, setting the bar high as reporting gets underway. More broadly, investors are alert to any setbacks to the economic recovery from spikes in Covid-19 infections and troubled vaccine rollouts.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Decent rise from the 6885 level yesterday and the bulls managed to push as high as 6945 before it stalled. Overnight the bears haven’t really done anything and with the ASX200 putting in a strong Thursday we may well see another leg up. The risk is that its all quite overbought, but we all know how strong “missy-out-itus” is (or FOMO!) and it can stay overnight/sold for a while before a turn. The said the S&P didnt quite manage the 4160 level, dropping off 4152 instead but has only dropped to the 4130 level. Again, a high RSI on this so more cautious with the bull stance on that at the moment.
For today we may well see a push towards the 7003 resistance level but could stall just shy as we have a fib at 6992. R2 is at 6978, while R3 is at 7013 so a rise to this area could well play out. Would certainly generate some more positive headlines. That said I am still thinking that the S&P is in a “short the rally” mode as the 2 hour chart has gone bearish and has resistance at 4149 for today. A rise to that and then another dip could well play out well. The bears will need to break 4122 though as we have the 200ema here on the 30m timeframe.
For the FTSE, the initial support is at the 6917 level where we have the daily pivot, and then S1 below this at 6892. However the 2 hour chart is bullish after the rise yesterday and has Hull moving average support at the 6912 level – will we see any dip down to here defended? The Raff channels are now both heading up again, and the bottom of the 10d Raff is at 6885 for today – yesterdays low as well.
So for today I am thinking that we will get a rise and then a dip, especially if the S&P were to manage 4148 (though there is an outside chance that it manages to get towards the 4165 R2 level still). Good luck today.
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