The FTSE 100 index is in the red today as investors react to the $1.9 trillion stimulus package announced by Joe Biden yesterday. The index is also reacting to the relatively weak economic numbers released from the UK today. The Footsie is trading at £6,761, which is slightly below this year’s high of £6,962.
What happened: In a speech yesterday, Joe Biden unveiled a $1.9 trillion stimulus package that he hopes will help supercharge the country’s growth. The package will have funds for individuals, companies, states, and local governments. It was nonetheless smaller than what analysts were expecting. The stimulus is important for the FTSE 100 because many companies do a lot of business in the US.
The FTSE 100 is also reacting to the relatively weak economic numbers from the United Kingdom. According to the ONS, the country’s trade deficit widened from more than £13.29 billion in November to more than £16 billion in December. Also, manufacturing producton dropped to 0.7% while industrial production fell by 0.1%. The economy slumped by 2.6% in December due to the lockdowns.
Top movers in the FTSE 100: The best-performing stock in the FTSE 100 is AVEVA, whose shares are up by more than 5.5%. It is followed by Melrose Industries, Avast, NatWest, and Evraz. On the other hand, the top laggards are Just Eat Takeaway, Smith, Anglo American, Compass Group, and BHP Group.
FTSE 100 technical outlook
On the daily chart, we see that the FTSE 100 is trading at £6,761, which is slightly above the 15-day and 25-day simple moving averages. The shares are slightly above the important resistance level at £6,677. It is also forming a small bearish consolidation pattern. Therefore, in my view, the index may continue falling as bears target £6,677.
FTSE 100 technical chart
