US declines on economy worries | Crude declines | Resistance 7092 7125 | Support 7080 7067

FTSE 100 Support 7080 7067 7065 7051 6973
FTSE 100 Resistance 7088 7089 7093 7109 7125 7155 7198

Good morning. Bit of a drop back yesterday, moreso on the US indices with the Dow stopping just 20 points shy of the 20k level. The S&P 500 Index fell the most since October as data showed a decline in pending U.S. home sales. The US was/is nervous about the economic future with new Trump policies. It was the fastest rate of selling yesterday since Trump’s election victory. The FTSE 100 couldn’t hold onto the 7100 level, despite the index hitting a new all-time closing high in the first day of trading since the Christmas break driven by strong gains in the mining sector.

US & Asia Overnight from Bloomberg

• Drop in crude halts longest winning streak since 2010
• Trading remains light as financial markets approach year-end

The dollar dropped the most in two weeks while oil retreated from its highest close in 17 months as investors prepared to close out a volatile year for financial markets. Asian stocks were mixed, with Japanese shares slumping while Chinese equities erased earlier declines.

The Bloomberg Dollar Spot Index fell for the first time in four days, with the U.S. currency declining against almost all its major peers. Crude futures slipped for the first time in nine days, halting the longest winning streak since 2010. Japan’s Topix headed toward its biggest drop in more than a month, after the S&P 500 Index fell the most since October as data showed a decline in pending U.S. home sales. Gold extended gains to a fourth day and government bonds advanced. Indonesian stocks rallied for a third day.

Trading has been thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average. Investors sold U.S. equities at the fastest rate since before Donald Trump’s surprise election, trimming a post-election rally that took major indexes to all-time highs. The dollar rose to the highest level in more than a decade on speculation the incoming president will boost public spending.“A market riding on expectations toward a Trump presidency is coming to a close, and we’re starting to focus on reality,” said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co. in Tokyo. “I expect investors to take a more nervous stance toward U.S. economic indicators from here on.”

Currencies

The yen rose 0.4 percent to 116.77 per dollar. The Australian dollar climbed 0.4 percent and the New Zealand dollar strengthened 0.2 percent.
The Bloomberg Dollar Spot Index slipped 0.3 percent after trading Wednesday at the highest level in more than a decade.

Stocks

The MSCI Asia Pacific Index was down less than 0.1 percent as of 2:48 p.m. in Tokyo after breaking a string of six consecutive losses on Wednesday with a 0.2 percent gain.
Japan’s Topix slid 1.1 percent. The benchmark is heading toward a loss of 1.8 percent for the year, its first annual decline in five years. The Nikkei 225 Stock Average pared its gain for 2016 to 0.7 percent.
The Shanghai Composite Index was steady after declining as much as 0.5 percent earlier, and Hong Kong’s Hang Seng Index pared losses to 0.1 percent from 0.8 percent.
The Jakarta Composite Index jumped 1.2 percent, bringing its three-day rally to 4.8 percent and erasing most of a two-week selloff.
Australia’s S&P/ASX 200 advanced 0.3 percent, reversing an earlier decline to trade at the highest level in more than a year. New Zealand’s S&P/NZX 50 added 0.2 percent, while South Korea’s Kospi Index was little changed.
Futures on the S&P 500 gained less than 0.1 percent. The benchmark index fell 0.8 percent on Wednesday. It’s up 10 percent in 2016 after adding 2.3 percent so far this month.

Commodities

Crude futures slid 0.6 percent to $53.75 a barrel as an industry report was said to show U.S. stockpiles climbed last week. Crude settled at $54.06 on Wednesday in New York, the highest close since July 2015.
Gold rose for a fourth session, adding 0.6 percent to $1,148.03. The metal has been rebounding from an 11-month low.

Bonds

Australia’s 10-year yield slid eight basis points to 2.78 percent, while the New Zealand rate was down nine basis points at 3.38 percent.
The yield on 10-year Treasuries dropped two basis points to 2.49 percent, extending Wednesday’s decline of five basis points.
[Bloomberg]

FTSE 100 Outlook and Prediction

The bulls will need to break the initial resistance at 7090 today if they want to push back above the 7100 area and hold there. We had a new all time high for the close yesterday but they couldn’t hold the gains, dragged down by the US. There is a lot of resistance at 7090 now, so will take quite an effort to push above that. If they do then the top of the 10 day Bianca is 7125, with 7155 resistance above that.

Support wise, we have the 7065 level to start with, then 7051 below that. Its still possible that we see a bit more bull to close out the year on these last 2 trading days. S&P might see some buying come in at the 2240 level if it drops further.