The FTSE 100- It looks like we're not the only one's who believe it offers value.

TPP Weekend Musings:

Just in case you missed it: France’s largest bank told its clients to ditch the Eurozone and back UK stocks.

The investment bank BNP Paribas has told its clients to move their cash into British stocks.

The bank has switched its preferred allocation to the UK, encouraging investors to follow suit and move their money into UK stock exchange listed companies.

The cheap pound means it’s a good time for foreign investment and this often gives the FTSE 100 a boost.

The UK’s combination of sectors and the economy’s impressive performance have also been cited as factors for the changeover.

London’s stock market has been plagued with fears of losing its dominance due to companies leaving post-Brexit. However, the bank’s decision to back Britain could bolster London’s stock exchange and ease their fears.

The bank’s head of credit research Viktor Hjort said: “The outlook for UK equities is not bad at all. The FTSE is a value market. It has lots of energy and materials and a lot of banks. You can look at the oil price to see where energy is going.”

Oil prices have risen heavily since June, reaching a 10-month high this week due to Saudi Arabia and Russia reducing the supply.

Energy giants BP and Shell will benefit from the increase in prices. The combined weighting of the companies accounts for around 13 per cent of the FTSE 100’s value.

Banks are also benefiting from a rise in interest rates, which has boosted financial institutions’ profit margins. We’ve seen record-breaking profits from high street banks who can make money from the larger spread between interest on deposits, and lending.

Hjort said: “We think this kind of environment is quite favourable to value investing in general as opposed to growth. The UK is a pretty good example of that.”

Companies in the UK were some of the cheapest in the world due to a “gloomy” sentiment towards the UK post-Brexit, according to JP Morgan.

However, sentiments have begun to change since JP Morgan's analysis, and now experts predict that the UK economy will prosper more than the Eurozone.

BNP’s chief European economist Paul Hollingsworth said there had been an environment of “pessimism” surrounding the UK after Liz Truss’ time in office.

He said: “There was a lot of caution about UK assets. Things have moved on since then. As we saw, the economy did perform a lot better than people expected.

“When we speak to people, they agree that there is some weakness ahead but it’s not going to be a severe downturn, partly because some of that underlying resilience is there.”

Morgan Stanley posted a similar report in July. While UK assets have been offering relatively attractive valuations for some time, in the context of the last 20 years, UK equities and corporate bonds are the cheapest global assets, according to one of the US’s other biggest investment banks.

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The FTSE 100 is trading on a forward price-to-earnings (P/E) ratio of 10.8x for 2024 compared to around 20x for the S&P 500. The forward P/E ratio provides an indication of growth expectations for a stock but can also give an idea of whether a stock is over- or undervalued.

UK equities are the?worst performers?among major European and developed-market stocks this year and there is no indication that the tide will turn just yet, but it will turn, and when it does it could do so very quickly.

Investors tend to move in herds, and large funds worry about missing out on the next opportunity. There is still a lot of cash out there after major stock outflows this year and asset reallocation now that fixed income actually yields a return.

However, that has happened. What’s next? Well, according to a few of the largest investment banks in the world, it could be time to finally look at the UK.

Last week the London stock market saw a flurry of analyst recommendations, with several FTSE 100 and FTSE 250 companies receiving revised price targets and ratings. Leading financial institutions such as Goldman Sachs, HSBC, and Barclays were at the forefront of these changes, altering their stance on key players in the market.

HSBC revised its rating for NatWest to 'hold', setting a new price target at 260 pence. Stifel upgraded Computacenter to 'hold', raising its price target to 3,025 pence from the previous 2,400 pence mark.

Goldman Sachs made several adjustments among FTSE 100 companies. The firm raised the price target for United Utilities to 1,143 pence from 947 pence while maintaining a 'neutral' rating. It also increased the price target for Severn Trent to 2,364 pence from 2,184 pence.

Conversely, they lowered Smiths Group's price target to 2,180 pence from 2,240 pence but retained a 'buy' rating.

Barclays also joined the fray with several amendments. The bank lifted Mondi's price target to 1,485 pence from 1,300 pence and maintained an 'equal weight' rating.

They also described Lloyds Banking Group as ‘simply too cheap’. Barclays rates Lloyds ‘overweight’ with a 70p price target (currently trading 44p).

While nobody knows what’s going to happen in the short term, rising long-term targets and getting the backing of France’s largest investment bank is a good indication that the FTSE 100 might have a little life in it. We certainly hope so, as the UK’s flagship index has trailed its peers for a number of years.

If the tide starts to turn, we could break 8000 again in no time.

Closing Comments:

Many of the strategies on TPP have profited on the FTSE 100 over the last couple of months. After it's fall all the way to 7200- most strategies built some exposure.

Two weeks ago as the FTSE?homed in on 7800- many took their profits. A couple are still holding, and if we can witness a further pullback in the short term- we would expect many more entries.

Right now, it does seem like the TPP strategies are?looking to take advantage of some of the recent 'value' in the?market.

Over the two weeks, global markets have fallen and?we have witnessed BUY positions entered across our strategies.?In short- our traders are BUYING INTO A FALLING MARKET.

Why merely track a market, when?opportunities can be taken advantage of in the short and mid term?

Adding small increments as the markets fall?is one of many ways our strategies make modifications to?consistently beat the markets.

If you're frustrated with what many?believe is a stale and outdated wealth management model- then consider arranging a call with our team.

We are also of the opinion that the industry needs revamped, and that wealth and asset managers have no excuses for failing to beat their benchmarks most years.

Investors want more than 4, 5, or?6% per annum, without taking on excessive risk.

Investors are frustrated with the poor performance and excessive fees.

Ladies/Gents -?this is the very reason why we built TPP.

TPP has been built for frustrated investors globally. It's time to empower yourself, and start to beat your benchmark. At TPP we offer a multitude of different strategies and trading techniques- they all have one thing in common. They are all designed to beat their market benchmark. Their track records suggest they will do exactly that.? It's time for change. No more exposure to underperforming?funds, and their inflated fees.

Change how you invest, work with TPP. Don't just hear about the revolution: Join it. Welcome to the future of investing.?