The FTSE 100‘s on a roll. It’s simply nudged to a different all-time excessive of 8,735, having climbed 5.75% year-to-date. It’s up 15% during the last 12 months.

Throw within the common yield of three.5% and share buybacks, and that’s a complete money return of greater than 20%. Who stated the UK inventory market couldn’t reduce it?

This raises the query: how a lot additional can it go? One other 3% will take us to 9,000. However what about 10,000? That requires a 15% surge from right here.

Can blue-chip shares maintain flying?

I made a decision to ask ChatGPT. Synthetic Intelligence (AI) can’t inform the long run anymore than I can. However I used to be nonetheless intrigued to see what it will say.

The chatbot highlighted three huge positives. First, the FTSE 100’s low-cost in comparison with US markets with a mean price-to-earnings (P/E) ratio of 15.5. The S&P 500 trades at 27 instances. These are my figures, not ChatGPT.

This might entice value-focused buyers searching for bargains, it stated, “If sentiment shifts in favour of UK equities, we may see a sustained rally“.

ChatGPT additionally advised the UK would possibly keep away from the worst of Donald Trump’s commerce tariff wars. We’ll see. Even AI can’t work out the workings of Trump’s thoughts.

My robotic buddy famous that the Financial institution of England has simply reduce rates of interest to assist the UK economic system. It might reduce once more. “Lower rates tend to be bullish for equities, particularly those with high yields, such as many FTSE 100 constituents”, it famous.

I’d add that they’d additionally weaken the pound, which might enhance abroad earnings when transformed again into sterling. Notice: 78% of FTSE 100 revenues come from overseas.

As ever, there are threats. Whereas the FTSE 100 isn’t a direct reflection of the home economic system, weak UK progress may nonetheless hit investor sentiment. “Stagnation or a technical recession could lead to market jitters”, ChatGPT cautioned.

How China has hit Glencore shares

Geopolitical tensions over Russia and the Center East may add additional market volatility. China’s financial struggles additionally pose a menace, ChatGPT stated, noting: “Many FTSE 100 mining firms and client items corporations depend on sturdy demand from Asia“.

I’ve seen this with my stake in Glencore (LSE: GLEN). Commodity shares have been punished by China’s struggles, which snapped up 60% of worldwide provide for years.

The Glencore share price is down 10% over one 12 months and 35% over two. But it appears good worth with a P/E of 10 instances. And it generated sufficient money to chop internet debt by $1.3bn between January and June final 12 months. Debt’s now down to $3.6bn.

Glencore’s trailing yield of two.9% doesn’t look nice, however is forecast to hit 5.4%. Many assume the power transition will drive calls for for metals comparable to aluminium, zinc, cobalt and copper, however that’s not 100% sure. Innovation may ship cheaper options. Commodity shares are cyclical. I’ll give Glencore time to swing spherical.

So what about that 10,000 goal? AI concludes: “While I remain cautiously optimistic, a move to 10,000 will require a perfect storm of bullish catalysts”.

Personally, I agree. 10,000 is a stretch this 12 months. Nevertheless it’ll get there sooner or later. Whereas I wait, I’ll maintain shopping for blue-chip shares and reinvesting my dividends. They give the impression of being terrific worth at present. That’s me speaking. Not a robotic.