Nick Batsford, CEO of Tip TV, and Zak Mir, technical analyst for shareprofits.com, joined Tip TV this morning to discuss the FOMC outcome and outlook for key stock market indices.
FOMC prepares way for rate rise
Mir began the show by noting that no surprises arose from the FOMC meeting last night. He commented that not raising rates in September would result in the Fed losing credibility. Batsford adds the view that the Federal Reserve remains likely to raise rates in order to achieve the goal of full employment, however, the timing remains questionable due to the current economic situation in the US and the rest of the world.
Index outlook
Mir noted that the S&P 500 has momentum conditions which remain favourable for it to achieve new all-time highs over the next few days.
Meanwhile, in terms of the FTSE 100, Mir commented how it found support at 6500, with recovery above 6800 indicating a possible test of 7100. He believes that a fall-off in export sales will weigh on Germany’s DAX, with it testing support at 11000.
Mir adds how the Shanghai Composite experienced strong buying on Wednesday’s close, with support resuming at 3800 this morning, but efforts to restore stability are likely to undermine the credibility of stock prices.
To finish, Mir noted that the Nikkei 225 is testing support at 20000, with a test of 21000 likely, breakout above this level could result in a target of 23000.