34803 QUOTE OF THE DAY “We know people want to be able to enjoy a Guinness when they choose not to drink alcohol without compromising on taste” Gráinne Wafer (Global Brand Director for Guinness) as he introduced the new non-alcoholic beer KEY INDEX MOVES Stoxx50 FTSE DAX FTSEMIB ▼ -0.4% ▼ -0.2% ▼ -0.4% […]
Europe is in the red today as the scent of rotation hangs in the air. We’ve seen a move into cyclicals /value/post-covid recovery names funded by profit taking in recent winners. It is now four days in a row that Cyclicals have outperformed Defensives, making a new 6m relative high. Despite the sea of red, there lacks a sense of panic given volumes have remained light. Keep an eye on the VIX – testing 30 today (key resistance we are watching, 30.33 last), next target at 40. Support levels to watch include 5778 on the FTSE 100, 12341 / 12253 on the DAX and 6500 on the IBEX. Also note a weaker dollar is helping Basic Resources stocks and the sector is the only one trading up (even if just about, +0.2%).
That’s more like it wasn’t it? Busier morning here at Redburn as we woke up to an eventful pipeline of European earnings. I was slightly worried about equities following the weakness we saw in the US overnight but today’s results did a good job of boosting the market (with most ahead of expectations). Volumes more encouraging too with all indices trading well above their 1d AVAT and some showing signs of life vs the last 20 days. Today is not even the busier day of earnings this week so we expect vols to stay healthy for the rest of the week.
I’m back after a week off and I must admit that today was a bit of a weird one to come back to! Covid news all pretty deflating across the board including Wales announcing a short national lockdown, Italy confirming stricter measures and one of UK’s scientific adviser (Jeremy Farrar) stating the UK needs an immediate three-week national lockdown over the weekend. Volumes not very encouraging either with EU indices trading 30% below their 20d AVATs. Euronext issues clearly not helping the cause! For now we have a couple of busy earnings days to look forward to so let’s hope that things pick up throughout the week.
All to play for today as European indices get back towards their 50dma. We have been stuck below for a while now so it would be nice to see them closing above ahead of the weekend. Quick summary, IBEX was above its 50dma yesterday but back testing it today (go España go!). FTSE MIB tested 19599 throughout the morning but is now trading well above it (19676 last). The UK is above though (despite a weaker MoM GDP print, 2.1% vs est. 4.6%) – FTSE 100 back above not only 5990 (50 dma) but also its long standing support of 6000. Lots of encouraging moves across the pond too. S&P Advance Decline line made a new all-time high yesterday (evidencing that the market breath is indeed good) and the Russell 2000 finally cleared the 1600 level – next target 5% higher.
We are at a slightly awkward time where earnings season is about to kick off but plenty of uncertainties are still around (US stimulus, Brexit, virus, economy). Feels like investors are in a bit of a mixed mood and are just going with the flow
More shock and less awe today as Trump’s tweet continues to reverberate. Despite his claim that there will be no further moves on the stimulus debate the fact that European indices are broadly unchanged suggests a degree of scepticism. What is clear though is that the mean reversion theme of yesterday has been put on ice for now. Volumes dead across the board with not a single country showing signs of life – how could you have conviction in these sort of markets?
What a disappointment – I’ve never seen such a woeful debate…not even at high school when we were practising to be future politicians. CBS polls show that Biden won the debate but overall I’m not sure anyone came out of it well. Next debate will be on the 15th of October but for now Trump has other matters to worry about. A bit of Tit for Tat from China this morning they are reportedly preparing to launch an antitrust probe into Google. All eyes back on Big Tech again today then?
The day has arrived! Trump and Biden are set up to have a pretty stressful day ahead of the first presidential debate this evening (2:00 am BST). They will discuss 6 key topics – the records of both, the supreme court, Covid-19, the economy, race/violence across the country and the integrity of the election – so it will definitely be a ‘hot’ one. I am sure Trumps taxes will be brought up at some point!
We’ve had a banks led sell off today with the SX7P breaking thought the 80/ 78.93 levels. The next level we are watching is March’s low of 78.93 and after that the next level would be the low from 1987 (76.81) – crazy isn’t it? I wasn’t even alive then. VGA obviously followed the trend and slipped through 3127 – our worry was them trading below 3117 and boom, 3112 last. Next level to watch it 3054 on the SX5E but 3000 area also quite likely. Relevant to point out that vols picked up on the down move (theme of high vols on down days remains). Across the pond, the KBW Bank Index will be in the spotlight this afternoon. Main level is 70 but if it breaks, it will then target 60!