15th April 2019
A bumper start to earnings season on Wall Street and signs of China’s stimulus reviving its economy boosted global stocks as US markets closed in on a new record high. Banking giants JPMorgan and Wells Fargo kicked off US earnings seasons in style with expectations-smashing results, lifting hopes of companies beating analysts’ gloomy forecasts.
Amid worries over slowing global growth, analysts had delivered the biggest downgrade to estimates in three years. The S&P 500 burst through the 2,900 milestone in afternoon trade for the first time since October, propelled by JPMorgan’s record first quarter profit. At its intraday high the index was 20 points away from its all-time highest close.
Miners led stocks in London higher after a surge in Chinese lending boosted hopes of Beijing’s stimulus rebooting its struggling economy. Glencore and Antofagasta climbed 9.8p to 332.5p and 21.5p to £10.23, respectively, as copper prices rallied. Weighed down by sterling’s strength versus the dollar, the FTSE 100 lagged global stocks, pushing 19.11 points higher to 7,437.06.
IMF Meetings Wrap Up
Global finance chiefs ended talks in Washington mixing concern toward the current state of the world economy with confidence that it will soon rebound. The shift away from tighter monetary policy by central banks, recent stimulus in China and easing trade tensions were hailed as reasons to hope the slowdown will prove short-lived although nobody forecast a renewed boom. With stocks already rallying on optimism about the outlook, officials at the International Monetary Fund’s spring meetings said growth is set to “firm up.” IMF Managing Director Christine Lagarde nevertheless warned the world is at a “delicate moment,” and at risk of “self-inflicted wounds.”
Market Open
Asian equity futures are pointing to a higher open after U.S. stocks closed out another winning week on Friday. The S&P 500 gained, punching through the key 2,900 level for the first time in six months on solid bank earnings and a big deal in the energy sector. The 10-year Treasury yield pushed to the highest level in nearly a month, while the dollar and gold were both lower. Meanwhile, China’s economy will draw the eyes of investors this week amid hope that its expansion has stabilized. Data due Wednesday is set to show the world’s number two economy slowed in the first quarter to an annual pace of 6.3 percent and monthly readings of retail sales, investment and industrial output will be scrutinized for signs of renewed health. On Thursday, Korea’s central bank is forecast to keep rates steady, while a jobs report in Australia will be closely watched ahead of a May 18 election. In the U.S., the main event is the Fed’s Beige Book, which will provide an insight into how healthy central bankers feel the economy is. U.S.-Japan trade talks also get under way in Washington.
FTSE 100 Trading Signals, Forecast and Prediction
We have a four day week on the UK markets this week and the FTSE 100 is closed on Friday and next Monday. four day week next week therefore too. Dividend this week is 4.3.
The FTSE 100 held the 7420 level on Friday and that remains support for the moment, and we also have S1 at 7424 for today. With the 200ema on the 30min also at this level we should see this hold any initial test first thing as I am still thinking that we will see rise towards the daily resistance zone at 7470 to 7478, the lev el we were looking for on Friday.
If the bulls manage a rise towards this zone then a short here looks worth a go, as there are a few flags for this level and it should hold the initial test. Above this level then the bulls will be targeting the 7532 daily resistance level, though I am not convinced that we will get that high today.
We also continue with earnings season this week, and today we have IBM, Johnson & Johnson, UnitedHealth Group, Netflix, CSX, Kinder Morgan and Bank of America.
Overnight the bulls have remained in charge and we are just above the Friday close price at 7437. As such we may see an itnial dip this morning, either to close the gap with that, or just drop down a little bit further to the 7420 support area again. If the bears were to break below this the n the S3 level at 7384, coupled with daily support and just below the fib level looks likely to be tested. If we get a bull Monday and the strength remaining then we probably won’t drop this low. If we do though then its worth a long.
The 2 hour chart remains bullish for the moment, with the 7420 area as support, while the bottom of the 10 day Raff channel on the daily has support at 7375. Will be interesting to see if the bulls can break above 7477, and then 7530 after that.
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