British stocks are set to soar
The FTSE 100 is yielding more than double America’s S&P 500 index. But it’s not just blue-chip multinationals that are cheap. Domestically orientated British stocks are, too.
The endless fuss and uncertainty over Brexit has prompted investors to look beyond Britain over the past few months. But that, as we keep pointing out, spells opportunity. The FTSE 100 is "very cheap", as Peter Stephens notes on Motley Fool. It is yielding a juicy 4.9%, more than double America's S&P 500 index. But it's not just blue-chip multinationals that make most of their sales abroad that arein the bargain basement.
When it comes to domestically orientated stocks, says Morgan Stanley, relative valuations are also "much too low".What's more, the gloomover the economy is overdone. The outlook may be "unspectacular", but it isstill "pretty solid", saysLiam Halligan in The Sunday Telegraph. GDP is set to grow 1.2% this year, according to
the Office for Budget Responsibility. This means that we are expected to grow faster than Germany (the latter's growth is predicted to reach just 1%). "For all the doom and gloom, wages are rising at their highest rate for a decade, amid record job creation."
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Nor should investors fear a no-deal scenario. Traders and investors "who actually read documents" know that French authorities have given assurances that a "smart customs" border in Calais will keep goods flowing, and a UK-EU aviation agreement will keep planes flying. The upshot? "As and when Brexit clarity emerges, British stocks... are set to soar."
Marina has a PhD in globalisation and the media from the London School of Economics, where she worked as a teaching assistant on the MSc Global Media. In 2014 she was invited to be a visiting scholar at Columbia University's sociology department in New York.
She has written for the Economists’ Intelligent Life magazine, the Financial Times, the Times Literary Supplement, and Standpoint magazine in the UK; the New York Observer in the US; and die Bild and Frankfurter Rundschau in Germany. She is trilingual and lives in London. She writes features and is the markets editor at MoneyWeek..
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