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Historical past reveals us that staying invested in FTSE 100 shares throughout powerful instances like these have paid off. The Footsie has recovered from a number of crises down the years — a pandemic, Brexit, and a worldwide banking disaster, to call only a few — demonstrating its resilience and potential for long-term progress.
Nonetheless, not all FTSE shares are equal. And an already poor outlook for some firms has been worsened by the influence of US commerce tariffs and counter motion from different main economies.
With this in thoughts, listed below are two FTSE 100 shares I’m steering away from.
Lloyds
Resilience within the UK properties market has offered Lloyds (LSE:LLOY) with one thing big to cheer about in 2025. It’s the nation’s largest mortgage supplier, so wholesome housing demand is important for earnings.
Additional seemingly rate of interest cuts ought to proceed to help energy right here. However broadly talking, the outlook for the financial institution is fairly poor, I consider. Rates of interest are tipped to fall no less than two or three extra instances this 12 months, in response to analysts, lowering its internet curiosity margins (NIMs) to a sliver.
Lloyds additionally faces revenues and margin pressures as market competitors heats up (and particularly so within the vital mortgages area). And whereas it doesn’t have operations within the US, it additionally stands to be an enormous loser as so-called Trump Tariffs weigh on the British financial system.
On Tuesday (21 April) the Worldwide Financial Fund (IMF) slashed its UK progress forecasts, tipping enlargement of simply 1.1% in 2025 and 1.4% subsequent 12 months. It additionally tipped inflation of three.1% this 12 months, representing the best stage among the many world’s superior economies.
With tariffs tensions escalating, I concern the risk to Britain’s financial system — and due to this fact to cyclical shares like banks — will proceed to develop. Lloyds faces a double whammy of weak revenue and rising impairments.
With a price-to-earnings (P/E) ratio of 9.5 instances, Lloyds’ share worth is grime low-cost. I feel this displays the excessive stage of threat the corporate poses to buyers.
BP
The IMF’s intervention this week additionally recommended darkening clouds for companies with international operations like BP (LSE:BP.). The physique slashed its progress forecasts for the world financial system to 1.8%, down virtually a full share level.
This implies that weakening vitality demand may intensify, pulling Brent crude — which just lately dropped to four-year lows — even decrease.
However BP’s not solely underneath strain as commerce tariffs put additional pressure on vitality consumption. Rising oil manufacturing from main producers like Brazil and Canada, mixed with steps by the OPEC+ cartel to unwind output constraints, additionally threaten a provide glut that might dent costs.
Towards this backdrop, Goldman Sachs analysts consider Brent will common $63 and $58 a barrel in 2025 and 2026 respectively. It even warned the black stuff may topple from present ranges round $68 to under $40 in an excessive situation.
This could be particularly damaging to BP given the large quantities of debt on its books. Web debt is anticipated round $27bn as of the tip of March.
This explains why the corporate’s ahead P/E ratio can also be extremely low, at 9.1 instances. On the plus facet, plans to accentuate cost-cutting may give earnings a lift, whereas hovering vitality consumption from the tech business may additionally help the underside line.
However on stability, I feel the FTSE firm is way too dangerous.
