The weaknesses of today’s widespread stock market are: FTSE 250 Index too. But I’m not worried. Rather, I think it may be a purchase opportunity.
This is the reason.
Why the stock market is weak
Recent weaknesses are due, at least in part, to recent data on the US economy. Last week’s employment report was weak and the latest inflation rate has leveled off.
As any investor knows, when the United States sneezes, the world catches a cold. And this time there is no difference. FTSE opened bearish today after the US market closed bearish yesterday.
And it’s not just for the bearish mood.many FTSE 100 Companies are globalized. This means that high inflation in the United States actually affects both the cost of the United States and domestic as a market.
Why the FTSE250 Index is in the Sweet Spot
The FTSE 250 Index, on the other hand, adds many UK-focused companies. Inflation in the United States is also an indicator of potential future trends in inflation in the United Kingdom, but so far that number has been relatively included.
In other words, inflation is less of a concern for the UK so far. By the way, I don’t think we should rule out the possibility of a big risk in the future.
But back to the point, we also see a great outlook for the UK economy. The Bank of England recently forecasts growth of 7.2% in 2021, the fastest growth rate since World War II.
The combination of controlled inflation and high growth is golden in my view. I’m still not sure if Britain can sustain it, but for now I have hope.
250 FTSE shares you want to buy
Also, in this scenario, growth is seen across sectors, which could increase the pool of investable stocks. However, there are some FTSE250 stocks that may be in a particularly favorable position, given the potential for high inflation in the future.
One of them is Wealth Manager Brew in DolphinDespite the weakness of the FTSE 250, it is rising today. This is explained by its solid six-month results. For the six months to March 31, 2021, pre-tax profits have increased significantly by 44% compared to the corresponding six months in 2020.
Except for the explosive rise in wages in the UK, I think it’s likely to be largely isolated from inflationary pressures.Also, national household savings Soared With the blockade, it’s a good omen. With strong growth prospects, personal investment will increase and wealth manager demand will be maintained.
Another option is a self-storage facility provider Safe Store Holdings, This is also up today after the transaction update. The company, which operates in the United Kingdom and the European continent, Significant increase in revenue.. There is also a powerful pipeline of new facilities. There is also a positive outlook.
I’m looking for more companies like these for my portfolio.
Manika Premusin There are no positions in any of the listed shares. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, Better investors than us.
Why buy FTSE250 shares now
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