FTSE 100 live outlook prediction analysis for 7th October 2020
We had the rise and dip play out, till the S&P hit 3430, and Trump fired up Twitter to announce that no more stimulus talks would take place till after the election – leading to a 90 point drop on the S&P to 3340. Since that low the bulls have fought back though and the futures are around the 3367 level now.
Federal Reserve chair Jerome Powell has warned the US’s economic recovery may be weak if America’s government can’t provide sufficient fiscal aid. Mr Powell’s comment during a speech for a virtual conference, comes as Congress remains in a stalemate over relief spending.
Despite a moderate rise across Europe, the FTSE 100 closed fairly flat. Here are some of the day’s top stories:
- Premier Oil and Chrysaor to create North Sea giant: Two of the largest North Sea oil explorers are set to merge in a deal that will create one of the largest independent oil and gas companies on the London Stock Exchange.
- Construction sector surges after growth spurt: Britain’s builders enjoyed their best month since Covid-19 struck during September after a surge in projects delayed by the pandemic.
- Out-of-town sites boom for Wagamama owner: Wagamama owner The Restaurant Group (TRG) hailed a sales revival at its suburban pubs and restaurants after the cornavirus pandemic caused its half-year losses to almost triple.
- More pain for cinemas as Warner delays The Batman: Warner Bros blockbuster The Batman has been postponed as the pandemic continues to play havoc with the blockbuster release schedule.
- Don’t turn off funding taps yet, warns Lagarde: Christine Lagarde warned that measures to contain coronavirus threatened Europe’s economic recovery and urged governments not to turn off the fiscal taps too soon.
Stimulus package
President Donald Trump ended talks with Democratic leaders on a new stimulus package, hours after Federal Reserve Chair Jerome Powell”s strongest call yet for greater spending to avoid damaging the economic recovery. “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump said Tuesday in a tweet. Stocks tumbled after Trump’s posting called an end to months of hard-fought negotiations between the administration and Congress. Democrats had most recently pushed a $2.2 trillion package that failed to garner Republican support in the House, while the White House had endorsed $1.6 trillion.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The dollar extended gains and U.S. equity futures fluctuated as investors weighed the impact of President Donald Trump’s decision to end stimulus talks until after next month’s election. Asian equities were mixed.
S&P 500 futures were little changed after the benchmark fell more than 1% overnight. Fresh comments from Trump calling for support for airlines and the Paycheck Protection Program helped reverse earlier losses. Shares saw modest gains in Hong Kong and South Korea and fluctuated in Japan. Treasury yields held overnight declines. Nasdaq contracts earlier retreated after a House panel proposed a series of far-reaching antitrust reforms to curb the power of U.S. technology giants.
After that dip last night we have had the bulls fight back, and the S&P still looks primed for a decent push higher during October. They need to break 3385 initially this morning as we have the 30min coral there, and then 3393 as 2 hour resistance above that – so a couple of hurdles to jump. The ASX200 had a bullish session today and it feels like the FTSE may well follow suit as we once again target a rise towards the 6000 area – we do have the R2 level here for today and I think we may well reach that level. The key will be defending any initial dip, and we have initial support at, once again, the 5920 area.
5920 looks key as we have the daily pivot and the 200ema on the 30m here, and as such we may well see this level hold again. If the bears were to break below this then a drop down to S1 at 5870 would probably happen though, and we also have the key fib at 5877. That said, it feels bullish, and the bulls moving the S&P price back above the 3375 level will definitely help.
If the bulls do show up today then above the 6004 R2 level we have R3 at 6036. I am thinking that the 200ema/daily pivot combo at 5920 will provide decent support though.
Generally it looks bullish today though and once again I am thinking that buying the dip is the best play. Good luck today.
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