2 FTSE 100 stocks I believe demand serious attention this July

Looking for top FTSE 100 stocks to buy? Here are a couple I think merit serious consideration this month.

Barratt Redrow

Risks remain to housebuilders like Barratt Redrow (LSE:BTRW) as the cost-of-living crisis endures and the UK struggles for growth. But further interest rate cuts could offset these pressures and reinforce the housing market’s recent rebound.

Latest lending data from the Bank of England (BoE) certainly paints a rosy picture. This showed the number of mortgage approvals for May rose to 63,000, an increase of 2,400 from the previous month. This beat expectations and was the first rise in 2025.

The likes of Barratt aren’t just benefitting from BoE rate reductions either. Buyers are also returning en masse as lenders fight a bloody price war and loosen their lending rules to attract buyers. A slew of banks and building societies (including Lloyds, Barclays and Skipton) again cut rates towards the end of last week.

Of course there’s no guarantee that rates will keep falling. A pick up in inflation — for instance, in response to rising oil prices, trade tariffs or supply chain issues — could let the air out the home market’s recovery.

But on balance, I think things are looking good for Barratt. And I’m expecting another robust trading statement when it updates the market this month (15 July).

In April, it said it was 93% sold for 2025, while average weekly sales rates (excluding private rental and multi-unit sales) were up 1.6% year on year between 1 January and 30 March.

BAE Systems

Defence companies like BAE Systems (LSE:BA.) aren’t as sensitive to broader economic conditions. Defending the realm is the number one priority of all countries. Spending is especially robust at the moment too, as Western nations rapidly rearm following Russia’s invasion of Ukraine three years ago.

Last month, NATO countries (with the exception of Spain) agreed to hike arms expenditure to 5% of their GDPs in the coming years. This bodes well for major suppliers to bloc countries, of which BAE Systems is one.

The FTSE 100 company is a significant provider of hardware and other support to the US, where defence budgets look less secure. But other NATO members, and close partners who it supplies product to, are investing heavily to pick up any slack. These include the UK, Australia and Canada.

Furthermore, BAE’s generating substantial revenues from emerging markets with rapidly growing arms budgets like Saudi Arabia. This creates additional opportunities, but it’s important to stress it also introduces risks. These include possible export restrictions and exposure to volatile regional politics.

This week, the UK’s High Court was required to rule whether sales of F-35 fighter jet parts from Britain — a major money-spinner for BAE — could go ahead. The decision went in the company’s favour, but it underlines the dangers of supplying to certain markets.

On balance, I think BAE shares are an attractive option for investors to consider. Its diversified model (by both technology and geography) helps to limit risk, while it also has considerable scale to effectively capitalise on the market upswing.

The post 2 FTSE 100 stocks I believe demand serious attention this July appeared first on The Motley Fool UK.

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Royston Wild has positions in Barratt Redrow. The Motley Fool UK has recommended BAE Systems, Barclays Plc, Barratt Redrow, and Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.