What could be in store for FTSE shares for the rest of 2024?

FTSE shares have been on a tear this year. Here this Fool breaks down what could impact their performance for the rest of the year.

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FTSE shares have had an awesome start to the year. But will they keep it up for the remainder of 2024? What could be in store for the UK stock market? Let’s explore.

What’s ahead?

There are two main factors that I see impacting markets in the months ahead. The first is interest rates. Since August 2023, the UK base rate has remained at 5.25%. In the months ahead, it’s expected we’ll begin to see rate cuts.

Many market spectators are predicting the first cut to occur in August. And in the latest Bank of England meeting, Governor Andrew Bailey hinted that we could be close to seeing the Bank make its first move in nearly a year. As rates fall, the market should be provided with a boost. Lower rates reduce the cost of borrowing for businesses.

There’s also the UK General Election to consider. Last month the Prime Minister announced that we’ll be taking to the polls on 4 July. If the race is tight and there’s uncertainty over who will be in power leading up to the day, this could produce spells of volatility.

As such, I reckon the rest of 2024 could be choppy. But even with any potential complications, I think there are plenty of opportunities on the stock market right now for savvy investors who have their sights set on the long term.

One to watch

One stock I’ve been watching closely lately is Marks & Spencer (LSE: MKS). The stock climbed just shy of 100% last year. So far in 2024, while it has not quite kept up that pace, it has still risen a healthy 9.6%.

Marks & Spencer has always been a business associated with high-end goods and quality products. But in years gone by, it seemed to struggle to keep up with the times.

However, that has now changed. After implementing its new strategy, which has seen it modernise and become a more serious player in the online space, the business is thriving.

Its share price shot up nearly 10% after its latest earnings release on 22 May. For the 52 weeks ended 30 March, revenue rose 9.4% to £13.1bn while profit before tax jumped 41.4% to £672.5m. Clearly, investors are bullish.

But it’s not just investors who think the stock could keep rising. Many brokers do too. JP Morgan recently lifted its price target to 330p, representing a 9.1% premium from the current price (302.5p). Deutsche Bank also raised its target price from 315p to 350p, representing a 15.7% premium.

Of course, those are just predictions. And despite its meteoric rise, the business still faces challenges. For example, as a higher-end retailer, it could feel the squeeze as inflation continues to eat away at consumers’ pockets. It has also over £2bn of debt on its books.

Value for money

Even so, the stock looks like good value for money, trading on 14.6 times earnings. With rate cuts expected this year, that should also provide an uptick in spending, which will help Marks & Spencer.

With that, I think plenty of FTSE shares present buying opportunities today. While we may face further hurdles in the months ahead, I’m confident they can keep delivering in the long run.

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.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has 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.

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