The FTSE 100 is back testing the 6,000 level and data out from the U.K. economy should decide the fate of the index. Yesterday saw a negative close in the Dow Jones with a lower close of 400 points. The U.S. bellwether index has bounced 100 points in the futures market today but the latest bearish move is a further sign that markets are starting to wobble after a strong run of recent gains.
Weighing on U.S. stocks yesterday was a slight rise in jobless claims. The economy still seems to be seeing strong hiring, but the number of workers on employment remains stubborn. In the U.K. Chancellor Rishi Sunal is seeing pressure to extend the furlough scheme to companies that look able to survive the lockdowns.
U.K. Economic Data
The FTSE will get a boost this morning from U.K. economic data, with manufacturing and industrial production for July coming in better than expected. This afternoon also sees a GDP estimate from the National Institute of Economic and Social Research (NIESR). The number gives an estimate for the three months to August and comes out a month before the official release.
Data from the U.S. economy this afternoon sees the release of inflation data via the CPI and this could have a bearing on the path for stocks into the close. The Federal Reserve has indicated their desire to stick to a 2% inflation rate and a higher number would imply a strong economy but could also imply that stimulus will not be extended.
FTSE Technical Outlook
The FTSE 100 has been trading between the 5,800-6,000 levels and is seeking a breakout above the 6,000 price. The 50-day moving average is ahead at 6,100 and would be the first target. Above there would open up a test of the 6,250-6,300 level. The Investing Cube team are available for Trading Coaching. Please find more details here.
FTSE 100 Daily Chart