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After the FTSE 100 breaks records in April, can it soar even higher in May?

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On 30 April, the FTSE 100 hit a brand new report of 8,200 factors. It beat the earlier excessive of 8,189 factors, set only a day earlier.

Has investor confidence lastly returned to the UK inventory market? We’re nonetheless in early days. However the newest outcomes we’ve been seeing from prime firms have been largely constructive.

I wish to take a look at two of the UK’s favorite Footsie shares.

Financial institution on Barclays?

Q1 income from the financial institution sector have been down, as anticipated, however not too dangerous. And the outlook appears more and more vibrant.

I’ll decide Barclays (LSE: BARC) for a couple of causes. Not least as a result of the share value has climbed 33% to this point in 2024.

There’s one primary motive I feel Barclays is likely to be a greater barometer of UK market sentiment than, say, Lloyds Banking Group. And that’s as a result of it nonetheless retains its worldwide funding banking arm, working within the US.

Worldwide focus

A fast take a look at the S&P 500 and the Nasdaq exhibits simply how bullish the US market is getting. With most of our FTSE 100 shares being actually worldwide in nature, I feel we have to look extra on the world image.

Even after the share value rise to this point in 2024, the Barclays valuation nonetheless doesn’t take a look at all stretched. A minimum of, not on fundamentals. Forecasts put the inventory on a price-to-earnings (P/E) ratio of 6.5, with a 4% dividend yield.

Have traders forgotten the dangers nonetheless confronted by banks this 12 months, hard-pressed by rates of interest? Possibly, however the bullishness does appear to be right here.

Rolls-Royce nonetheless rolling

The opposite standard inventory I wish to take a look at is Rolls-Royce Holdings (LSE: RR.)

The Rolls share value has multiplied five-fold prior to now two years. And, simply when it appeared prefer it is likely to be going off the boil in early April and set to fall, it picked again up once more.

A few of us have been ready for a share value correction after such a surge. And I actually did anticipate to see shareholders taking some revenue off the desk now.

They’re nonetheless shopping for

Nevertheless it seems just like the demand remains to be there. And that lends extra help to a key thought. That robust investor confidence may ship the FTSE 100 a good bit larger but in 2024.

What is going to occur to the Rolls-Royce share value subsequent? On the one hand, the large positive factors made prior to now couple of years may counsel falls in Could and past.

However I feel we may additionally make a case {that a} 2024 P/E of 28 remains to be good worth, with the expansion expectations that Rolls now enjoys.

FTSE 100 in Could?

So, the place would possibly the FTSE 100 go in Could, and in June, and…?

Month-by-month actions don’t imply loads to a long-term investor. And we must always make our purchase selections primarily based on particular person inventory valuations.

However loads of these nonetheless look low to me. Add in that rising investor sentiment, and I see probability of extra inventory market positive factors in Could and past.


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