FTSE 100
FTSE 100 continues to underperform the major global indices as the Brexit negotiations deadlock weighs on investors sentiment. Despite the record highs closing in Wall Street FTSE 100 is trapped below the 50-day moving average.
Traders expect to be a quiet day until the Jerome Powell speech in Jackson Hole. The expectations are that Powell will announce higher average inflation target, between 2.25% and 2.5%, which points to lower interest rates and weaker USD. If that is the case, we might see further strength in equities.
Rolls-Royce reported a drop of 26% in revenue to £5.8 billion and a loss of £1.7 billion including £1.2 billion in one-off charges related to the coronavirus outbreak. The company will not pay any dividend and will seek to sell assets up to £2 billion in an attempt to clean and strengthen its balance sheet.
WPP reported a £2.6bn loss in the first half as the company wrote down £2.7 billion for the reduced value of its assets during the coronavirus crisis. The WPP share jumped higher after the company surprised positive keeping the dividend at 10p a share.
FTSE 100 is 0.34% lower at 6,025 as the bears continue to control the index after the failure yesterday to return above the 100-day moving average. On Tuesday FTSE run-up to the 50-day moving average but met strong sellers, and failed to break above.
Support for FTSE 100 stands 6,014 the daily low. A break below would open the way for 5,996 the low from yesterday’s trading session. Below 5,996 the next support would be met at 5,947 the low from August 21.
On the upside, intraday resistance for the index is at 6,049 the daily high. More sellers expected at 6,061 the 100-day moving average. Next level to watch on the upside is the strong 50-day moving average at 6,141.
