Extremely, the FTSE 100 simply accomplished 11 days of optimistic positive factors. This was the blue-chip index‘s greatest run since 2019!

The Footsie tanked in early April when President Trump’s sweeping tariffs announcement threatened to ship the worldwide financial system right into a tailspin. Since then although, there have been rowbacks and pauses from the US administration. This has calmed markets, at the least for now.

Particularly for the FTSE 100, it means the index has almost clawed again all of the losses following Trump’s announcement. I actually didn’t count on 11 days of positive factors, proving as soon as once more how totally unpredictable markets will be within the brief time period.

Injury would possibly already be completed

However we’re not out of the woods simply but. The 90-day pause on most ‘reciprocal’ tariffs ends in July. Relying on what occurs then (or earlier than), the index might pull again sharply or preserve climbing to notch new report highs. It’s a little bit of a coin toss.

Furthermore, there’ll already harm completed to international development from all of the uncertainty. How a lot harm we don’t know but, however the 10% blanket tariff continues to be in place, as is the extraordinary 145% obligation on items from China.

Based on a ballot carried out by Reuters, 60% of economists (from greater than 300) mentioned the possibility of a worldwide recession this yr is now excessive or very excessive. So it’s attainable this FTSE 100 rally proves to be short-lived.

On my radar

If that is so and the FTSE 100 retreats, I’m going to contemplate shopping for shares of Experian (LSE: EXPN). They’re down 9.1% for the reason that finish of January, however have nonetheless returned round 200% in a decade (excluding dividends).

The corporate gathers and shares details about credit score historical past, serving to lenders determine which individuals and companies to provide loans or credit score to. It additionally helps corporations stop fraud and identification theft.

Whereas Experian isn’t essentially a high-growth agency today, it nonetheless posts respectable numbers. In its final monetary yr, which resulted in March, income is predicted to have elevated by round 6% to $7.5bn. The forecast is for that to rise above $8.1bn this yr.

Experian is a capital-light enterprise that makes cash by means of knowledge and analytics companies. Consequently, it’s very worthwhile, with a wholesome 24% working margin. Regular worthwhile compounders like this have the potential to supply stable long-term returns.

My solely downside right here is the valuation. Proper now, the inventory’s price-to-earnings (P/E) ratio is round 38. Whereas I don’t thoughts paying up for high-quality international companies, that P/E a number of seems to be slightly excessive for my liking.

Plus, in a recession, fewer people and companies would possibly apply for loans, bank cards, or financing, which might cut back the necessity for Experian’s core credit-checking companies. This danger doesn’t seem priced in at current.

That mentioned, lenders additionally develop into extra cautious about who they lend to in robust instances. So I’d count on Experian to carry up higher than many different corporations.

The corporate sits on the centre of huge international shifts in the direction of digital lending, cybersecurity, and knowledge analytics. These long-term tendencies are highly effective and nonetheless have years to run. 

I’ll take into account snapping up this inventory if the FTSE 100 tanks in the summertime.