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"It's great to see the forgotten FTSE is a hair's breadth from all-time highs once again"

Journalist: John Choong (Head of Markets and Research), Newspage

ended 15. August 2024

After a rout earlier this month that saw global markets crash, including the FTSE 100, which plunged 4.3%, markets have rebounded since. Britain's benchmark index is now only approximately 1% off its all-time high after positive UK and US macro data. Key inflation metrics have been falling while both economies continue to flex their muscles.

This morning, UK GDP continued to grow strongly, recording 0.6% of growth in Q2 and could be end up being the G7's strongest economy by the end of the year if the current rate of growth continues. Meanwhile, US retail spending smashed estimates. Economists alike were only expecting July's retail sales to rise by a mere 0.3%, but were pleasantly surprised with a 1% print instead.

Stock markets have reacted favouralby on that note, and now have the potential to rebound to their all-time highs, especially the FTSE. However, risks remain as the Bank of Japan's monetary policy could still present a spanner in the works, as any further hikes to the Bank Rate in Japan could trigger another sell-off.

Newspage asked experts for their views, below.

4 responses from the Newspage community

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Wes WilkesVerified
CEO at IronMarket Wealth
It's great to see the forgotten FTSE is a hair's breadth from all-time highs once again. The UK market is exhaustively known as ‘cheap’ or ‘value’ but let’s hope the second quarter GDP print is good enough for all of those allocators who have been waiting in the wings to invest more in, and bet bigger on, the UK stock market.
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John ChoongVerified
Head of Equities and Markets at Interpretiv
Britain's blue-chip index may have been knocked down after this month's market tantrum, but it has staged a remarkable comeback since and is now eyeing the championship belt. The UK's economic resilience is fueling this resurgence, as macroeconomic data this week was positive. With GDP growth outpaced expectations and the more concering elements of inflation finally saw further cooling, the FTSE 100 is strutting with renewed confidence. However, it's not all clear skies ahead. The Bank of Japan's monetary policy remains a wild card as the Land of the Rising Sun continues to battle inflation. Any hawkish surprises could send global markets into another tailspin, potentially derailing the FTSE's ascent. Yet, for the patient investor, the UK market looks like a bargain basement in a luxury mall. With British stocks among Europe's cheapest and the economy showing its mettle, the medium-term outlook for UK equities is looking far more promising.
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Chris BarryVerified
Director at Thomas Legal
The FTSE 100 has been hovering between 6 & 7000 points for decades and, prior to April this year, had always failed to break above 8000 due to sluggish growth post-Global Financial Crisis and subsequent nervousness following Brexit, Covid and the war in Ukraine. With a large number of companies making up the FTSE 100 not performing as expected over recent years, we could well see a break out to the upside and 9000 would be the next significant target for the end of this year.
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Andrew MontlakeVerified
Managing Director at Coreco
Sentiment is everything in the markets, and the fact that the FTSE has recovered strongly from its recent wobble sets a scene of future hope and prosperity. Of course, one swallow does not make a summer, but the UK seems to be on a positive course and let’s hope that this continues, rather than hitting another iceberg out of the blue, of which there have been too many in recent years. In order for the FTSE 100 to sustain its rally, however, the Halloween budget needs to be thrilling, and not scary.