Here’s what’s hot in the stock market right now

Jonathan Smith talks through key stocks that are hot right now in the FTSE 100 and FTSE 250, with strong stock market returns over the past month.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Man smiling and working on laptop

Image source: Getty images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

As we head towards the end of the year, I feel it’s important to look at the stocks I want to buy and hold in 2022. There’s plenty going on at the moment in financial markets. A potential China slowdown, interest rate hikes being looked at around the world, along with concerns about inflation. Despite all of this, there are pockets of the market that are doing really well now. So this is what’s hot in the stock market right now and could make good additions to my portfolio.

The travel sector

Leading the pack over the past month have been companies that benefit from international travel picking up again. This coincides with continued relaxation and simplification of travel rules both here in the UK and beyond. Moving to just a red list of countries that need quarantine, as well as future plans to allow a lateral flow test instead of a PCR test will make it easier for people to travel.

This has benefited airline stocks, such as easyJet and International Consolidated Airlines Group. Over the past month, their share prices are up 13% and 33%, respectively. Over a longer one-year period, both stocks are up at least 50%.

Others associated with this sector, such as Rolls-Royce and TUI, are also doing well. Both rank in the top 10% of stocks in either the FTSE 100 or FTSE 250 stock market for share price returns over the past month.

Personally, I think these stocks can move higher still into 2022 if things continue as planned. Obviously, the risk here is that the winter throws up higher Covid-19 infection rates that could see countries bring back some travel restrictions. 

Stock market picks from banking

Another area of the stock market that’s hot right now is banking. Within the FTSE 250, Investec shares are up 18% over the past month. This makes it one of the best performers in the index. Over a one-year period, the stock is up 117%.

In the FTSE 100, five of the top 15 stocks in the past month are banks. Over a year, the lowest return from this group is +36%. In my opinion, this area is hot in the stock market right now for two reasons.

First, expectations are really shifting on when different central banks are going to raise interest rates. In the UK, some think that the Bank of England could raise rates before this year ends. These expectations in the short term have helped to boost banks, as their profit margin is higher when interest rates are increasing.

The second reason is that the UK economy has done better than expected since the depths of the 2020 crisis. This means the banks haven’t lost as much due to loan defaults or lack of spending/payments.

Looking forward, I think that banks are a good option to include in my portfolio. However, unlike the travel sector, I don’t see as much upside into next year. This is because I think most of the good news regarding interest rates is now priced in to the current prices.

Overall, the stock market has some hot sectors right now that I can try to take advantage of.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

jonathansmith1 and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Portrait of pensive bearded senior looking on screen of laptop sitting at table with coffee cup.
Investing Articles

7.5x earnings, £80.2m in net cash, and a big yield… what’s not to like about this UK stock?

This UK stock has a really strong net cash position relative to its size and its other metrics are very…

Read more »

Two male friends are out in Tynemouth, North East UK. They are walking on a sidewalk and pushing their baby sons in strollers. They are wearing warm clothing.
Investing For Beginners

My daughter could earn a £75,000 second income because we started an ISA at birth

Earning a second income is a dream for many Britons. By leveraging time, investors could make it a reality for…

Read more »

Portrait of a boy with the map of the world painted on his face.
Investing Articles

Could this trigger a stock market crash?

Dr James Fox takes a closer look at an alarming trend in the Far East that could have consequences for…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

What’s happening with the Jet2 share price?

The Jet2 share price has lost momentum after the tour operator said that customers were leaving their bookings to the…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

Could the Chancellor’s Leeds Reforms trigger a bull market for UK stocks?

More competitive lending and greater interest in shares could help kick start growth for UK businesses. But could it also…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

I think this AI stock could double before Palantir

Palantir stock is up almost 100% this year. As a result, it now sports a market cap of $350bn meaning…

Read more »

Elevated view over city of London skyline
Investing Articles

As the FTSE 100 hits an all-time high, is it time to reconsider the S&P 500?

Christopher Ruane explains why a surging FTSE 100 has not yet made him focus more on the potential of S&P…

Read more »

GSK scientist holding lab syringe
Investing Articles

The FTSE 100 sits at a record high. But some stocks still look dirt cheap!

The usually sluggish FTSE 100 is having a surprisingly good year. But our writer feels there are still potential bargains…

Read more »