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The FTSE 100 closed lower Tuesday as investors fretted over risks associated with the Covid omicron variant, while a takeover deal at a significant premium and news of a stake change weighed on pest contol firm Rentokil and telecoms company BT Group. The blue-chip index eased 0.2pc to mark its fourth consecutive decline. Rentokil was the top drag on the index, down 12.3pc, marking its worst day in 13 years.
Asian stocks were mixed Wednesday and U.S. equity futures were steady as traders braced for a faster withdrawal of Federal Reserve stimulus and evaluated signs of slowing Chinese economic growth.
Japanese shares gained while China and Hong Kong fluctuated. Chinese data ranging from new home prices to investment and retail sales suggested slowing growth amid a deepening property market slump and Covid disruptions.
Meanwhile, initial lab findings indicated that China’s Sinovac shot — one of the most widely used in the world — doesn’t provide sufficient antibodies to neutralize the omicron virus variant. Some 2.3 billion doses of the vaccine have been administered, mostly in China and the developing world.
S&P 500, Nasdaq 100 and European futures edged up. Treasury yields and the dollar pared gains. Technology shares led a Wall Street drop Tuesday as investors soured on more richly valued stocks ahead of the Fed policy decision.
Rapid Spread
Omicron now makes up 3% of all Covid-19 cases in the U.S. While that figure sounds low — delta remains the dominant variant at 96% — it’s up from 0.1% early in the month, highlighting the speed of its spread. In South Africa, studies show the Pfizer and Johnson & Johnson vaccines, and Pfizer’s Covid pill, all offer significant protection against being hospitalizedwith the variant. That’s positive news for Singapore as it further loosens workplace restrictions, accepting that an “omicron wave” is likely on the way. In other covid news, vaccine passports that restrict access to places like restaurants and museums are found to boost vaccination rates; the risk of heart inflammation after a Covid shot is lower than that from the virus itself; and a no-needle vaccine is undergoing trials in the U.K., where Prime Minister Boris Johnson is facing his biggest Tory rebellion over new Covid curbs.
FTSE 100 live outlook prediction analysis for 15th December 2021
Well that got a bit bearish yesterday and the S&P tested the 4605 10 day Raff channel bottom, but then saw a decent bounce. The Covid back drop plus the start of this week traditionally being weaker both paying their part, along with the Fed news later today and then OPEX on Friday writhing things down.
With the FTSE100 breaking below the 7230 area then we may well see the next major support at 7188 tested where we have the key fib and the S1 level today. That’s also just below the 10 day Raff channel support at 7200 so in theory an overshoot of that and then snap back would make sense. The bulls would be keen to defend the 7200 level. At least you would expect them too anyway!
If the S&P bulls can build on the bounce from 4605 and break through the overnight level at 4645, then we should see a rise to test the previous support at 4665. Above that then the bulls can start to regain control and we get a run in to Christmas then. That said the S&P 2 hr chart is quite bearish with 4698 now showing a red coral, and as such looking like key resistance that the bulls will need to break. Can they do it?
For the FTSE, I am looking at an initial dip down from this 7220 level to test that 7188 area and then a bounce to play out as we head towards the Fed later (7pm UK time). A rise towards the 7240 level where we have the daily pivot would fit quite well and then above that I would be looking for 7263 200ema, then the 7300 area where we have the red 2h coral. The daily moving averages remain bullish, just about anyway, and with the price at the bottom of the 10 day Raff channel a climb back would fit. Its really going to be all about the Fed today.
If the bears were to break below the 7188 level then a slide down to 7161, and probably lower will play out. Lower down we have the 7115 S3 level as support. Would be quite bearish if we got that low though. I am not expecting a slide down to there and thinking more buy the rumour/sell the news is likely today, especially if the S&P500 continues to climb from the 4600 level.
So, once again external influences playing their part. Boris got a bloody nose in the HoC yesterday as now not getting the carte blanche mandate to impose restrictions – MPs realising that people just want to live their lives, be sensible and take the risk.
Watch for the Fed later and lets see if we get a decent bounce from the 7188 level. Good luck today.
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