FTSE 100 live outlook prediction analysis for 13th December 2019
It was a historic night. Boris Johnson and the Conservatives have recorded a landslide victory in the 2019 general election. The party is on course for their best result since Thatcher and Mr Johnson has welcomed a “powerful new mandate to get Brexit done”.
In contrast, Jeremy Corbyn has announced he will quit as Labour leader after a miserable night for the opposition, who are set for their worst performance since 1935. And it has been no better for the Liberal Democrats, whose leader, Jo Swinson, endured the indignity of losing her seat.
Global shares touched an all-time high on Thursday after Donald Trump wrote online the US and China were “VERY close” to a “big deal” on trade. The US President’s intervention boosted equities markets, pushing MSCI’s broad All-Country Global Index over its previous peak, from January 2018. Investors were given extra encouragement by a Wall Street Journal report released shortly after Mr Trump’s tweet, which said US negotiators had offered to cut tariffs by as much as half on $360bn (£275bn) of Chinese-made imports, and cancel tariffs due for introduction on Sunday.
That all drove global markets higher, pushing European indices into a rally that lost some steam towards the end of the session.
Cable rises
The pound has enjoyed its biggest surge in a decade as the City cheered predictions of a strong Conservative majority that would finally end the Brexit deadlock. Investors piled into sterling after the exit poll suggested Boris Johnson would be given a majority strong enough to put to bed the uncertainty plaguing businesses and the economy. After sinking during nervy trading in the run-up to the exit poll, the pound erased early losses to soar more than 3pc against the dollar in just half an hour, breaking past the $1.35 milestone to its highest level in 19 months. It broke above €1.20 against the euro, hitting its highest level since the aftermath of the EU referendum.
Done Deal
President Donald Trump signed off on a so-called phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter. The deal presented to Trump by trade advisers Thursday included a promise by the Chinese to buy more U.S. agricultural goods, according to the people. Officials also discussed possible reductions of existing duties on Chinese products, they said. The terms have been agreed but the legal text has not yet been finalised, the people said. A White House spokesperson declined to comment.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Going to be interesting with that result, though I expect markets will be breathing a sigh of relief and we continue to build on the FTSE 100 rise from 7200. Cable shot up with the Tory majority result as expected, which kept a lid on the FTSE 100 futures for a bit, though a test of an overnight high at 7375 bodes well for further upside today. I expect we will retest that level and also probably the top of the 10 day Raff channel at the 7415 level.
Cable may well hover around the 135/136 level now, and as such that will help the FTSE 100 bulls to drive that up further. We should still be on course for the bullish year end we have been expecting. Still thinking 7700 is possible for the end of the year.
Friday the 13th after the election so again, stay nimble and cautious, though buying the dips is still my preferred pattern for today. The S&P has pushed on to 3180 and I wouldn’t be surprised to see 3200 sometime soon.
All that said, it’s not going to be a straight line rise, so I am watching the 7375 level as initial resistance. For the support side of things, the 30min chart has 7290 first up, with the fib at 7270 below that. This level should hold but if not then 7240 is the 200ema and would probably get tested, though there are a few other supports around this area. if cable were to continue to rise past the 13500 area then that will limit the FTSE int he short term.
A day of watching things pan out as the market absorbs the news and watching 7375 and 7415 as resistance. 7270 and 7240 as support. I am expecting a positive day overall today for the FTSE 100. Have a good weekend.
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