FTSE 100 near record high, DAX 40 and S&P 500 also higher on Fed Chair Powell speech
Outlook on FTSE 100, DAX 40 and S&P 500 post less hawkish than anticipated Jerome Powell speech.
FTSE 100 trades close to new all-time highs
The FTSE 100 rallied to a new all-time high overnight following Wednesday evening’s less hawkish than anticipated speech by the Federal Reserve (Fed) chair Jerome Powell, even though he explained that more rate hikes would be needed if the US labour market remains strong but also mentioned that disinflation had begun.
A continued advance in the UK blue chip index could have the psychological 8,000 mark in focus, if further record highs were to be seen.
Slips should find support around the 7,876 January peak and further down at Tuesday’s 7,843 low. While it underpins, immediate upside pressure should be maintained.
DAX 40 recovers on back of stronger US equity markets
On Tuesday, the DAX 40 revisited its Monday low but then recovered off it amid stronger US equity markets which positively interpreted comments by Fed chair Jerome Powell, even though he mentioned that inflation may last “quite a bit of time.”
Following Tuesday’s Hammer formation on the daily candlestick chart, the DAX 40 may once more be heading towards its 15,553 early February high, provided that Tuesday’s low at 15,272 underpins on a daily chart closing basis.
Above it the 2023 uptrend line at 15,318 may offer support as well.
S&P 500 rallies post Fed chair Powell’s speech
The S&P 500 saw some volatile trading on Tuesday, rising in anticipation of Fed chair Jerome Powell’s speech and then rapidly dropping during his speech before finally rallying as the market interpreted his comments to be less hawkish than previously anticipated.
A swift rise off Tuesday’s 4,088 low took the index back above the 4,155 mid-September high while targeting last week’s six-month high at 4,195 which hasn’t been reached yet, though. If overcome, however, the late August high at 4,215 would be next in line.
A bullish bias will be maintained while no bearish reversal takes the S&P 500 below Tuesday’s 4,088 low. If so, a top may be forming which could take the index back to the 55- and 200-day simple moving averages (SMAs) at 3,966 to 3,938.
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