Surprise! The FTSE 100 could be on track to reach 10,000

Upcoming interest rate cuts could send the FTSE 100 to over 10,000 by as early as February 2025. Here’s what investors need to know.

| More on:

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.

Middle-aged white man pulling an aggrieved face while looking at a screen

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.

2024 has been a terrific year so far for the FTSE 100. The UK’s flagship index is up by double digits after including dividends. And with inflation only a few points away from falling in line with economic targets, businesses are starting to thrive again.

We’ve already seen impressive growth figures start to emerge from leading businesses like AstraZeneca, Rolls-Royce, and Compass Group (LSE:CPG), among others. And providing the macroeconomic landscape continues to improve, some analyst forecasts have become increasingly bullish.

In fact, there’s a chance the FTSE 100 could reach 10,000 points this time next year! But it may not, of course.

Should you invest £1,000 in Tesco right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Tesco made the list?

See the 6 stocks

Hitting a new high

According to the latest outlook from The Economy Forecast Agency, the FTSE 100’s expected to reach as high as 9,907 by December. But this upward trajectory may continue breaking through the 10,000 point threshold for the first time in history as early as February 2025.

If that turns out to be the case, then investors may be set to enjoy yet another bout of double-digit growth. After all, compared to today’s level of around 8,200, that’s a 22% increase.

Of course, investors should always take forecasts with a pinch of salt. There are a lot of assumptions that go into these figures, and a lot has to go right in order for the FTSE 100 to break a new record.

It’s worth pointing out that 10,000 is the most optimistic forecast, with 8,854 the least. That still signals potential growth, but investors may end up with considerably less than expected.

Nevertheless, this bullish prediction is a welcome sight, given the pessimistic nature of the stock market over the last few years. There’s no guarantee of what will happen over the next 12 months. But interest rate cuts could provide a powerful catalyst for sparking share price growth, especially given that so many stocks continue to trade at relatively cheap multiples.

What to buy?

Now that we’re seemingly at the start of a new bull market, snapping up terrific companies at a good price could lead to immense wealth creation in the long run. That’s especially true if it ends up lasting as long as the last one. And the first place I’d start my search is actually among the companies that are already delivering.

Take Compass Group as an example. The contract caterer recently published its interim results, which once again displayed double-digit sales and earnings growth. As such, profits came in higher than expected, and management’s outlook suggests this trend will continue throughout the rest of 2024.

Despite this encouraging turn of events, the shares are still flat compared to a year ago. There may be some cause for concern given that capital expenditures have increased as a proportion of revenue, placing pressure on profit margins. Yet that hasn’t stopped operating profitability from returning to near-pre-pandemic levels. So it’s a firm that merits a closer look, to my mind.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

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.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Compass Group Plc. 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

US Stock

Apple stock is close to 52-week lows. Should I snap it up now?

Jon Smith discusses the double-digit percentage fall in Apple stock last week and weighs up whether now's the time to…

Read more »

Investing For Beginners

2 FTSE 100 gems that rallied last week as the stock market tumbled

Jon Smith flags up a couple of FTSE 100 shares that actually jumped at a time when most of the…

Read more »

Investing Articles

Glencore’s share price is 53% off its 52-week highs. Is it time to consider buying?

Glencore’s share price has tanked due to concerns over an economic slowdown. Is this an amazing buying opportunity for long-term…

Read more »

Investing Articles

Forecast: in 1 year, the Marks and Spencer share price could be…

The Marks and Spencer share price has hit its highest point since 2016 after more than doubling under the new…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 34%, does IAG’s share price look an unmissable bargain to me now?

IAG’s share price had fallen a long way even before the latest market rout, but this may mean a bargain-basement…

Read more »

Investing Articles

Forecast: in 1 year, the HSBC share price could be…

The HSBC share price is approaching a 20-year high under its new CEO as he targets $1.5bn of savings. Here…

Read more »

Investing Articles

Forecast: in 1 year, the Barclays share price could be…

Barclays’ share price has more than tripled in the last five years as higher interest rates push up margins. But…

Read more »

Investing Articles

This FTSE 100 heavyweight’s yield is forecast to rise to 8% by 2027 and it looks 60%+ undervalued to me too!

This FTSE financial gem looks very undervalued to me and its yield is projected to rise to well over my…

Read more »