The stock market looks bullish today, but there’s much more to come for US and UK stocks according to a growing chorus of commentators.
Image source: Getty Images
There’s a growing chorus of voices predicting a further rally for US stocks in November and beyond. And wherever the US market goes, UK stocks often follow.
Bullish commentators over the past few days include CNBC’s Jim Cramer, analysts at JP Morgan, and analysts at Bank of America. But there are still some bearish voices out there too, such as BlackRock‘s chief investment strategist.
To put things in context, we’ve already seen a strong rally for US stocks during October. The Dow Jones Industrial Average gained almost 14% to score its best month since 1976. And the S&P 500 increased by around 8% in October.
Here in the UK, the FTSE 100 delivered an increase of around 3% last month and the FTSE 250 mid-cap index rose by just over 4%. But many individual UK stocks have done even better than that. However, not all of them have risen.
Jim Cramer thinks that technical charts are indicating there is further potential for increases this year. However, I’d be the first to admit that relying on charts as a guide is perhaps not the best way to proceed. A better approach for me is to analyze the fundamentals and valuations of businesses.
Nevertheless, Cramer has been following renowned US technical analyst Larry Williams. And Williams apparently used charts to predict the rally in October. According to Cramer, Williams reckons the market is likely to deliver more upside through to the end of the year.
“Bulls be prepared, bears beware,” said Cramer on his popular TV show. And I can see that the period heading into Christmas and the New Year has often produced bullish sentiment among investors in previous years.
Meanwhile, most of the optimistic commentators have been focusing on an expectation that inflation will ease soon, causing central banks to back-off from aggressive raising of interest rates. And investors have more money in cash than at any time over the past couple of decades, apparently. So, the theory goes, improving general economic conditions could cause a flood of money back into stocks and shares thus prompting a sustained rally.
Bearish voices have been saying things like the markets have already gone too far too fast. And the reality of a global recession will likely take stocks and shares lower.
However, none of these opinions should make any difference to my investment programme in shares. I’m concentrating on the prospects, valuations, and quality of the businesses underlying the shares that interest me. If those things add up to an attractive long-term investment opportunity, I’m pulling the trigger and buying. And that’s regardless of whether the general stock market moves up, down, or sideways.
Meanwhile, today’s weaker stock market offers an opportunity if I focus on the long term. After all, billionaire investor Warren Buffett once said, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”.
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 considered so you should consider taking independent financial advice.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Kevin Godbold 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.
1 November, 2022 | Christopher Ruane
Our writer has been considering adding this well-known growth stock into his portfolio after it shed over a third of…
Read more »
1 November, 2022 | Royston Wild
It’s true that the Lloyds share price looks terrifically cheap on paper. But I still consider the bank far too…
Read more »
1 November, 2022 | James J. McCombie
I’m looking at value, consumer staples, and healthcare stocks, as well as banks and insurers, for long-term buys as interest…
Read more »
1 November, 2022 | Edward Sheldon, CFA
The Cineworld share price just rose from around 2.4p to near 9p in the blink of an eye. Edward Sheldon…
Read more »
1 November, 2022 | Harvey Jones
This FTSE 100 stock has fallen out of favour in recent years but I think today’s low valuation and high…
Read more »
1 November, 2022 | Roland Head
BP shares are up, but the company’s dividend is still well below 2019 levels. Roland Head explains what’s happening and…
Read more »
1 November, 2022 | Royston Wild
These dividend-paying UK shares both look undervalued by the market today. Here’s why I think they could be unmissable buys.
Read more »
1 November, 2022 | Andrew Mackie
As the BP share price continues its march higher, this Fool argues its shares still offer tremendous potential in the…
Read more »
View All
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 considered so you should consider taking independent financial advice.
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >
We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are both trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FCA) (FRN: 422737). We publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2022 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.
