The FTSE 100 is entering a strong patch according to its last 10-year seasonal pattern. In the last 10 years, the FTSE 100 has risen a total of 7 times out of 10. The largest gain was last year with a strong +7.91% increase. The largest loss was -7.84% in 2012. There are a number of factors that would support FTSE 100 gains over the coming month. The UK is expecting s strong economic bounce back with a fast vaccine roll-out programme. The Scottish National Party failed to get an overall majority, so that means the chance of a successful Scottish referendum is, although still possible, less likely. A large amount of pent up savings in the UK of around £150 billion are now poised to be released into the economy and could send the FTSE 100 higher this month.

Will the strong seasonals and fundamental outlook send the FTSE 100 in May?

FTSE

Trade Risks:

  • Over the longer term, May tends to be a weak seasonal month for stocks. However, recently FTSE 100 stocks have been quite well supported during May.

  • The main risk to this trade is from any risk-off tones which may pull equity markets lower.


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High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

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