Image source: Getty Images
The stock market rises one day and falls the next day. As I write, the FTSE 100 It stands at some points above 7,500. Is he just waiting to be released?
Even if share prices do not move much, private investors are showing interest again. stock market companies report increasing signs of optimism.
So is everyone really waiting for the starting flag to wave before accumulating their favorite stocks?
<h2 class="wp-block-heading" id="h-finance-stocks“>Financial actions
Investment services company. AJ Bell (LSE: AJB) has seen a 60% increase in capital inflows and there is talk of increased investor confidence.
The firm produces quarterly reports, its Dividend panel. They gather the feelings of city officers and seem positive.
Forecasts suggest a big rise in earnings for FTSE 100 shares in 2023, with the financial sector far ahead. You know, those downtrodden banks with their super-low price-to-earnings (P/E) valuations and big dividend yields.
Hmmm, makes me think that investment firms themselves, like AJ Bell, could be good buys for the next bull run. Earnings forecasts look good and the share price has only risen a little.
The P/E looks modest, especially if we are in for a bull run. Yes, AJ Bell is on my list for more research.
The beginning?
Then, fiscal year reporting season could begin. But we could also get a big sign, and it could be soon.
I keep seeing FTSE 100 headlines like “stocks uncertain as traders await interest rate decision“.
Will UK shares rise when the Bank of England makes its first interest rate cut? Note that I say “when,” not “if,” since no one really doubts that it will happen one day.
I think so. A rate cut should make cash and bond investments less attractive, and make stock market dividends look a little better. So why wait?
Inflation again
All that said, we bulls may still have to wait a little longer. Inflation increased slightly in December, up to 4%.
But it is not an exact measurement. And I think a busy Christmas period might have had something to do with it.
Overall, looking ahead to next year, I see a few reasons why the stock market could start to shine a little.
Inflation continues to decline overall and is much better than last year. The real estate market is also showing green shoots and homebuilders are optimistic about the start of the year.
The Bears
Now, there are some commentators who think that 2024 will bring another stock market crash. In fact, today I saw someone report a drop of 20% or more.
This refers to the US, where stocks could see a bit of upside. I don't see UK stocks, with lower valuations, falling like that. Still, a US crisis would almost certainly hit the FTSE too.
Anyway, what counts is not when the stock market might rise, but whether UK shares are cheap. And if we think they are, we should buy them, right? And surely not wait for someone to give the starting signal.
