FTSE 100 stock index closes at new all-time high 🌱

[Stewy]

"The index closed on Monday at 8,023.87 points to mark the new record, surpassing its previous high of 8,012.53 in February last year.

It was up 1.62% at its close, with retailers M&S, Tesco, Sainsbury's and Ocado among the big risers of the day."

https://www.bbc.co.uk/news/business-68877506

Green shoots and optimism abound in 2024. 🌱 

[reddog]

It's due to the £ going down 

[scottbeard]

5 minutes ago, reddog said:

It's due to the £ going down 

Exactly, it's just a nominal index, so should have been rising 15%pa in 2022-23 just to keep up with inflation. 

Had it kept up with inflation since 1999 it would be at about 14,000 now.

[Will!]

All the more reason to put the Bank Rate up a bit.

[Dreamcasting]

3 minutes ago, Will! said:

All the more reason to put the Bank Rate up a bit.

Not going to happen due to government debt. They're itching for the rates to come down.

It's really best just to get out of GBP if you hold significant amounts.

[jiltedjen]

Flight to safety with US stocks looking scary (small bounce today)

UK looks very cheap compared to overpriced US.

Generally markets swing to American out performance for an extended period to rest of world, we are overdue rest of world out performance.

 

[Dreamcasting]

The narrative now is rate cuts, rate cuts, rate cuts. BOE and ECB will likely be the first with a -0.25 decrease within the next 3 or 4 months. The Fed will follow a couple of months later. In case anyone has been asleep, they've been itching to do rate cuts the entire time. The governments simply can't function without them. Yes, the stock markets "look" well overpriced as a whole, particularly US tech, but nobody wants to be in cash so there's only one way they'll go.

[TenYearToGetMyMoneyBack]

3 hours ago, scottbeard said:

Exactly, it's just a nominal index, so should have been rising 15%pa in 2022-23 just to keep up with inflation. 

Had it kept up with inflation since 1999 it would be at about 14,000 now.

https://www.schroders.com/en-gb/uk/intermediary/insights/dividend-reinvestment/

6930 x 2.22 = 15384

So it has beaten inflation (just). 

It is interesting that the stocks being mentioned are low growth high dividend ones. The closest thing to a tech stock there is Ocado.

[scottbeard]

1 hour ago, Dreamcasting said:

The narrative now is rate cuts, rate cuts, rate cuts.

Is it?  I thought the narrative was "expected 7 US rate cuts in 2024 now might be 1 or 0"?

[Dreamcasting]

4 minutes ago, scottbeard said:

Is it?  I thought the narrative was "expected 7 US rate cuts in 2024 now might be 1 or 0"?

I'm hearing a couple this year and a further couple H1 2025. That is BOE and ECB. So down to 4.25% for the UK. The Fed will likely only do 1 in around November, but with US government debt, it seems inevitable that they'll have to chase down at pace in 2025.

[Locke]

Would you say this is a permanently high plateau

[Stewy]

Just now, Locke said:

Would you say this is a permanently high plateau

I'd be targetting 9,000 personally. 

[gerkin]

The headlines are that it is at an all time high but compared to all other stock markets including India FTSE has been a complete loser..it should have been at 20k at least. Major companies are planning to pull out and resist in the US. 

When ARM was listed in London it barely moved but now listed in US its worth billions more. London markets suck and I should have invested in Nasdaq instead.

[scottbeard]

58 minutes ago, Locke said:

Would you say this is a permanently high plateau

Personally - not at all.  I think if anything the UK stockmarket is currently undervalued against most long-term measures.

Unlike the 1920s that you allude to with that phrase it's not like we are at the end of a period of exponential growth, in fact it's been rather sluggish.

[Biggus]

19 hours ago, Dreamcasting said:

The narrative now is rate cuts, rate cuts, rate cuts. BOE and ECB will likely be the first with a -0.25 decrease within the next 3 or 4 months. The Fed will follow a couple of months later. In case anyone has been asleep, they've been itching to do rate cuts the entire time. The governments simply can't function without them. Yes, the stock markets "look" well overpriced as a whole, particularly US tech, but nobody wants to be in cash so there's only one way they'll go.

I agree with you. However, I would like to point out that governments could function without rate cuts. They choose not to stop spending piles of everyone's money. It is a choice they make, not an inevitable outcome.

For example look at President Harding's reaction to a massive recession, known as the Forgotten Depression as the policies worked and led a huge spike in prosperity.

'The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover—falsely characterized as a supporter of laissez-faire economics—urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of “fiscal stimulus,” Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserve’s activity, moreover, was hardly noticeable. As one economic historian puts it, “Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction.” 2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and was only 2.4 percent by 1923.'

https://isi.org/intercollegiate-review/warren-harding-and-the-forgotten-depression-of-1920/