Equity Analysis and News
- FTSE 100 Posts Worst Monthly Performance Since October 2018
- S&P 500 Eyes Key Data Releases in the Form of ISM and NFP
Source: Thomson Reuters, DailyFX
FTSE 100 | The index posted its largest decline since October 2018, having underperformed its counterparts with monthly losses of 4.8%. While escalating trade tensions between the US and China weighed on the index from the beginning of the month, the recent uptick in GBP from its 2yrs lows has also pressured the FTSE 100. Looking ahead, Brexit induced volatility will once be on the rise as MPs return to parliament. Following UK PM Johnson’s move to suspend parliament from mid-September to October 14th, a backlash from opposition parties has raised the risk of a no-confidence vote in the government. That said, with the Pound expected to be the most volatile currency next week, sizeable fluctuations can be expected in the FTSE 100.
Aside from Brexit, focus will also be placed on the upcoming UK PMI survey’s in which expectations are for a marginal gain, therefore signaling a potential bottom in the recent weakness observed over Q2.
S&P 500 | Data Heavy Week as ISM and NFP are Released
Following the relatively robust regional PMI figures, risks are modestly tilted to the upside for the ISM Manufacturing PMI, in which a better than expected figure could see recessionary fears ease somewhat, thus keep the S&P 500 elevated. Topside resistance is situated at 2940-60 in which a close above could see the index on course for a test of the 3000 level. Elsewhere, while the NFP report typically garners attention, given that the Fed have placed less emphasis on the job market when providing an outlook for interest rates, the impact has been somewhat diminished in recent months with the exception of sizeable deviations from market consensus.
Regional PMI
- Chicago PMI 50.4 (Prev. 44.4)
- Richmond Fed Mfg. 1 (Prev. -12)
- Philly Fed Mfg. 16.8 (Prev. 21.8)
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--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
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