S&P 500, DAX 30, FTSE 100 Analysis and News

  • S&P 500 | Irrational Exuberance Faces a Reality Check
  • FTSE 100 | BoE to Top Up QE

S&P 500 and FTSE 100 Forecasts for the Week Ahead

Source: DailyFX

S&P 500 | Irrational Exuberance Faces a Reality Check

In a week that saw bankrupt companies spiking to pre-COVID 19 levels, and an unrelenting bid in tech stocks that saw a new record high despite the economic uncertainty, the term ‘irrational exuberance’ coined by former Fed Chair Alan Greenspan springs to mind. However, this exuberance faced a reality check amid Thursday’s sell-off in which the global equities posted their largest one day drop since mid-March. As we closed out the week, the equity market has posted a modest bounce back, which isn’t unusual following a 5% drop. That said,Thursday’s session will provide a stark reminder to market participants that downside risks remain, particularly as second wave concerns mount. As we look to next week, eyes will on Fed Chair Powell’s Testimony (Tues 16th).

Change in Longs Shorts OI

S&P 500 Price Chart: Daily Time Frame

S&P 500 price chart

Source: IG Charts

FTSE 100 | BoE to Top Up QE

Brexit is once again on the agenda with high-level talks scheduled between UK PM Johnson and EC President Von Der Leyen on June 15th. Given that the UK have reiterated that they do not plan on asking for a transition period extension before the July 1st deadline, no deal fears will continue to pick up in the run-up to October 31st, in the absence of notable progress. Elsewhere, the BoE is expected to increase its asset purchase facility by £100bln, however, risks are skewed towards more QE purchases.

Change in Longs Shorts OI

FTSE 100 Price Chart: Daily Time Frame

FTSE 100 price chart

Source: IG Charts


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— Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

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