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S&P 500, FTSE 100 Analysis and News
- S&P 500 | Central Bank Repricing Prompts Short Squeeze
- FTSE 100 |Rallying into Resistance
S&P 500 | Central Bank Repricing Prompts Short Squeeze
A 2% rise in the S&P 500 caps off a strong week for the index as falling commodity prices and global bond yields underpins. Alongside this, with recent data showing a slowdown in growth momentum, markets have notably repriced expectations of policy tightening by central banks, which has added further fuel to the rise in equities.
Meanwhile, on the technical front and as we highlighted at the start of last week, given the rare oversold internals within the index, the outlook looked much more constructive. That being said, bear market rallies are a common feature in the current backdrop and as such, this does not change the overall bias that rallies are to be faded. (A comprehensive table of past bear market rallies).
Source: DailyFX, , Refinitiv. T+1 = 1-Day After Sub 2% of Stocks Above 50DMA (Originally posted June 20th)
Looking ahead to next week, with little in the way of notable economic data, focus will turn towards month/quarter/half-year end. While some investment banks expect portfolio rebalancing to add to recent gains in the market, ultimately, price action will be somewhat noisey. However, as mentioned above, the broader view remains a fade on rallies.
S&P 500 Chart: Daily Time Frame
Source: IG
FTSE 100 | Rallying into Resistance
The gloomy outlook for the UK economy remains the same, consumer sentiment is at all-time lows, retail sales continue to soften and the Bank of England is stuck between a rock and a hard place when it comes to rate hikes. That said, this has not stopped the FTSE 100 from tracking broader markets higher with the index back up to prior support, now resistance at 7200. Above resistance puts 7340-50 in focus, however, a return to the YTD high is a stretch too far and would favour a move back to sub 7000.
FTSE100 Chart: Daily Time
Source: Refinitiv
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