Keith Bowman, Senior Analyst at Hargreaves Landsdown joined the Tip TV team today for the market open and to survey the landscape after yesterdays ‘Super Thursday’.
Super Thursday a let down, rate rise unlikely
When probed on his reaction, Bowman didn’t hold back, commenting that the only thing super about yesterday was the cricket, and that the Bank of England events were an anti climax. He commented that he feels that the Government is keen to normalize rates, but the backdrop wasn’t supportive yet.
Zak Mir, jabbed at Carney, noting that his commentary implies that he is willing to override the MPC which has caused disarray in the analytical world by misleading the market when supposedly providing forward guidance.
300k Nonfarm Payrolls needed to instigate Fed rate hike
When shifting to today’s Nonfarm Payrolls, Bowman believes that anything in the 200k region is consistent with economic recovery, and that it is evident that the Fed are keen to make an initial raise and test the market reaction. Mir added that likely if NFP’s are to instigate a rate rise then the number might have to be close to 300k, as the dollar is too strong and inflation too low at present.
Shifting to broker recommendations, the team note that Deutsche Bank (XETRA:DBKGn) have shifted Standard Chartered (LON: LONDON:STAN) from a sell to a hold, and Rio Tinto (LON:LONDON:RIO) has maintained a buy for them. JP Morgan are sticking with an overweight outlook, while Beaufort retain a buy recommendation. Finally, JP Morgan are overweight Marks & Spencer (LON: MKS).
FTSE 100 sentiment in line with China woes
When considering market sentiment, the team shifted to data collected from www.stocktwits.com. Looking at the FTSE 100, which is 71% Bearish according to StockTwits users, Bowman feels that there is an interesting overlay with the DAX, due to the relationship with miners in the UK, and China to whom Germany is a big exporter. He feels that the negative sentiment is justified because the instability in China has led to uncertainty in the market.
Good Nonfarm Payrolls could boost FTSE 100 close above 200D MA
Shifting to technicals, Mir starts with the FTSE 100, noting the 200DA MA at 6757. He feels a good payroll number today could see spot close for week above the 200D MA, which could be start of a good run for FTSE 100. He sees RSI at 55 above neutral, and higher lows on the chart too.
West Texas to hit $35?
WTI, according to Mir is still headed to $35 according to his long term downward trend channel. He notes that spot is capped by strong resistance at the 10D MA, which is an ultra bearish indication.
Moving to single stocks, Mir is bearish on Glencore (LON: LONDON:GLEN) which is still failing at around the 10D MA. He sees a slight bullish divergence in RSI, but believes that it is too early to catch fall. Mir sees positive moves in BHP Billiton (LON:LONDON:BLT), but prefers the RSI, currently at 47, to push through 50. He sees the 50D MA has capped the downside and is currently at 1258p, which we are miles away from that now. Aviva (LON:LONDON:AV), he feels is interesting after price gapped through the 10D MA, and held. Mir is looking at the rising 200 and 50D MA’s, which are probably a golden cross buy signal in September.