Wren Sterling, chief investment officer of financial firm Wren Sterling, said British stocks looked particularly attractive after a new round of market volatility. Global stock markets have recovered from a turbulent start to the month that saw stocks slump blamed on worries about a U.S. recession, signs of weakness in the artificial intelligence trade and the rapid unwinding of yen-funded “carry trades.” The rebound has lured some investors back into shares of U.S. tech giants, even as strategists warned the market may remain vulnerable to further volatility. It is against this backdrop that Wren Sterling’s Rory McPherson believes UK stocks look “cheap” and “underowned”. Macpherson told CNBC’s “Squawk Box Europe” on Tuesday that he described the UK market as “dividend-ripe”, having posted some “outstanding” earnings in the lead-up to the sell-off in early August. He pointed to the bank as one of those that exceeded expectations. Asked whether investors should consider British stocks as part of a move away from U.S. tech companies, Macpherson responded: “Well, we think so. I mean, you look at a market like the U.K., which is It’s 12 times earnings, it’s cheap, and surprisingly, data released last week showed UK equity funds had outflows for 37 consecutive months, so it’s still an outflow. “You look at the economy, it’s growing,” he added. Strong. Consumers are saving over 11%, companies are buying back shares, they are trading at unchallenging valuations and we are on track to have the FTSE 100’s first positive quarter of earnings growth this year.” P/E ratios are still quite challenging… and trading remains very concentrated. Analysts have recently become bullish on British stocks, which have been out of favor for years. BlackRock Investment Institute, a unit of U.S. investment firm BlackRock, said in early July that it believed Britain There could be a “tactical case” for the stock market as Britain’s center-left Labor Party won a landslide election victory on July 4, replacing the center-right Conservative Party after 14 years. Looking ahead, Macpherson told CNBC that consumer prices are up. It may reach 2.5% by the end of the year, well above the Bank of England’s 2% target, but such an outlook should not prevent the central bank from cutting interest rates. Data released on Wednesday showed that UK inflation in July was 2.2%, slightly lower than expected, but higher. 2% data in May and June. Earlier this month, the Bank of England cut interest rates for the first time in more than four years, lowering the key interest rate to 5%.
CIO backs UK stocks despite US rally | Real Time Headlines
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