Stock market

After the FTSE 100 broke records in April, could it be even higher in May?

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On April 30, FTSE 100 Set a new record of 8,200 points. It beat the previous high of 8,189 points, set just a day earlier.

Has investor confidence finally returned to the UK stock market? We are still in the early days. But the latest results we’re seeing from top companies have been mostly positive.

I want to see two of Britain’s favorite footy stocks.

Bank on Barclays?

Q1 profits from the bank sector were down, as expected, but not too bad. And the outlook looks increasingly bright.

i will choose Barclays (LSE: BARC) for a few reasons. Not least because the share price is up 33% so far in 2024.

I think there is a fundamental reason why Barclays may be a better barometer of UK market sentiment than, say, Lloyds Banking Group. And that’s because it still retains its international investment banking arm, which operates in the US.

International focus

A quick look at S&P 500 And Nasdaq Shows how fast the US market is growing. With most of our FTSE 100 stocks being truly international in nature, I think we need to look more at the global picture.

Even with the share price gains so far in 2024, Barclays’ value still doesn’t look like it has grown. At least, not on the basics. Forecasts put the stock at a price-to-earnings (P/E) ratio of 6.5 with a 4% dividend yield.

Have investors forgotten the risks facing banks this year, which are under pressure from interest rates? Maybe, but the boom is visible here.

The Rolls-Royce is still rolling.

Another popular stock I like to look at. Rolls Royce Holdings (LSE: RR.)

Rolls’ share price has risen five-fold in the past two years. And, just when it looked like it was coming off the boil in early April and ready to fall, it picked up again.

Some of us were waiting for a correction in the share price after such a rally. And I really expected shareholders to take some profits off the table now.

They are still buying.

But it seems the demand is still there. And this further supports a key thought. This strong investor confidence could still send the FTSE 100 slightly higher in 2024.

What will happen to Rolls-Royce’s share price next? On the one hand, the big gains over the past two years could suggest a fall in May and beyond.

But I think we can also make a case that a 2024 P/E of 28 is still a good value, given the growth expectations that Rolls now has.

FTSE 100 in May?

So, where will the FTSE 100 go in May, and in June, and…?

Month-to-month movements don’t mean much to a long-term investor. And we should base our buying decisions on individual stock prices.

But a lot of them still seem low to me. Add to that rising investor sentiment, and I see a good chance for more stock market gains in May and beyond.

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