4 stocks I'm watching

The market is very much risk-off at the moment. At least for AIM shares and small caps.

Lots of stocks are selling off, and a big reason for that Starmer’s “October budget is going to be painful” speech.

This has, whether intended or unintended, affected the stock market.

So much so that Sky News is reporting that more than 140 companies have written to the chancellor to say that uncertainty over the current business environment and potential changes to tax relief is damaging investor sentiment.

Liontrust said it in yesterday’s RNS. Premier Miton today.

Sentiment is down. People are scared. Investors are getting out.

There is, of course, the possibility that by setting expectations low and then delivering a budget that isn’t as bad as everyone thinks, that suddenly it’s taken hugely positively.

Or that people rush to sell and lock in gains, anticipating a higher tax charge later, but delivering a nice windfall for HMRC without Labour needing to actually change any rules at all.

Who knows? Not me. But I see the market staying turgid until the uncertainty is out of the way.

Nobody makes big decisions before a budget. Why would you? Imagine buying an electric vehicle now only to find out three weeks later you’ve lost the tax incentives. Now you’re stuck with a car that has plummeted in value because you couldn’t sit on your hands for a few weeks.

With that said, there are still a few stocks on my radar and that I’m watching.

CMC Markets (CMCX)

CMC has been on an absolute tear this year. And for good reason.

Costs are down, and the institutional business has been growing at a clip.

The end result is that profits have exploded.

And that’s been reflected in the share price.

The company reported that H1 2025 profit is expected to be approximately £51 million.

Now, given that the full year pre-tax profit is forecast to be £86.5 million, it looks like this is going to be an expectations beat even though the company hasn’t explicitly said so.

This is why the stock gapped up in my view. However, people took the opportunity to bank profits and the stock fell back to flat.

It’s natural after stonking rallies for stocks to consolidate. Old shareholders want to take profits, and new shareholders pick up the slack.

I think there could be a further move in CMC Markets should the stock break out of the base being built around these levels.

I’m not in a rush to buy now even though the price would be cheaper.

Why? Because I want efficiency on my capital.

By buying at the point of resistance, the stock is breaking out into new highs with no drag of overhead supply (existing shareholders currently sat at a loss).

Buying right is better than buying cheap.

Mpac Group (MPAC)