UK FTSE All Share (.FTAS) How the last two years have impacted the economy
Pound sterling dropped dramatically when the results came in on 23 June 2016, and it has failed to regain lost ground since then.
Two years have passed since the UK voted to leave the EU, and the uncertainty the referendum result unleashed has only intensified the closer we get to Brexit.
Politically, negotiators still have not managed to reach agreement on some of the most important issues involved, such as membership of the customs union, and the Irish border.
The impact of this lack of clarity on UK business over the past two years is clear to see, with companies, markets and workers all feeling the effects.
The first sign of how dramatic an effect Brexit would have on the UK economy was the nosedive in the value of sterling overnight after the vote two years ago.
The pound plummeted to a 31-year low, dropping 10 per cent against the dollar to hit $1.33, and it has failed to regain any ground since then, instead falling even lower at various points. This week, sterling hovered around $1.32.
“The pound has become the main lightning conductor for market sentiment and in general a ‘hard’ Brexit or ‘no deal’ have been greeted with dismay by sterling. The prospect of a ‘soft’ Brexit has tended to receive a warmer welcome from the currency markets,” said Russ Mould, investment director at AJ Bell.
The stock market
The FTSE has benefited somewhat from that dramatic decline in sterling, rising 30 per cent in the time since the Brexit vote. This is largely because companies making their money overseas have been boosted as their earnings are now more valuable in sterling terms. Exporters have seen a bump in sales as foreign buyers see their products coming down in price.
Meanwhile, the drop in the pound has also attracted deal-hungry companies to British firms, such as US group Vantiv, which paid $10.4bn for the UK’s Worldpay last year, which helps keep the stock market buoyant.
However, while the FTSE has risen over the past two years, when compared with markets elsewhere around the globe, including the rest of Europe, its 30 per cent return is behind most rival regions. For example, the financial markets in Asia-Pacific have returned 56.8 per cent in that time, while the US rose 53 per cent. This is also put down to the fact that overseas holdings have become more valuable in the wake of sterling’s fall from grace.
And to top it off, firms are still considering their options when it comes to leaving the City. While it’s unlikely to result in a complete desertion, the number of businesses setting up shop elsewhere is not insignificant; some of the world’s biggest banks have begun moving jobs out of London, and several other companies have threatened to jump ship if it looks like Brexit will not pay off.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 4,315.17.
The projected lower bound is: 4,155.24.
The projected closing price is: 4,235.20.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 32 white candles and 18 black candles for a net of 14 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with FTSE-A ALL SHARE). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 33.9588. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 52.32. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 21 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -64. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 20 period(s) ago.
Rex Takasugi – TD Profile
FTSE-A ALL SHARE closed up 65.440 at 4,230.430. Volume was 4% below average (neutral) and Bollinger Bands were 51% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 4,224.93 4,182.50 4,093.85
Volatility: 16 12 12
Volume: 147,194,784 140,193,296 130,561,144
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FTSE-A ALL SHARE is currently 3.3% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .FTAS at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .FTAS and have had this outlook for the last 13 periods.
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