The FTSE 100 held steady just below its recent record highs early on Tuesday despite the ongoing geopolitical tensions which have been a feature of 2026 so far.
This followed a new record for the Nikkei 225 overnight in Japan. A weak yen, which boosts an export-reliant economy, and the possibility of increased stimulus helped generate significant investor excitement after a public holiday.
The Trump administration’s announcement of a 25% tariff on countries doing business with Iran, and continuing suggestions of potential military intervention amid the escalating protests in the country, do not seem to be spooking markets too much right now.
After the recent noise around the independence of the Federal Reserve, new inflation data may offer some clarity about whether there is a case for a near-term interest rate cut following mixed jobs numbers last week.
Persimmon
Persimmon’s latest update offered some hope that 2026 could be a better year for housebuilders. Guiding for a full-year outcome at the top end of expectations, despite an autumn selling season disrupted by a late-in-the-year Budget, is a solid achievement.
The company has been able to ramp up the number of completions appreciably and 2026 is underpinned by a robust order book.
A reduction in bulk orders and a dip in the social housing market are potential headwinds but if interest rates and inflation continue to ease then more people should be able to afford the mortgage required to purchase their dream home.
Build cost inflation is expected to remain stable, despite the impact of regulatory costs, including a big increase in landfill taxes. Persimmon’s control of its supply chain – including in-house production of bricks, tiles and timber frames – should help it keep a lid on costs.
For now, management are remaining conservative and sticking with current guidance. This is a sensible move given the recent disappointments served up by the sector. Even within the improving picture, it is worth noting that earnings are still a long way behind the peaks seen in 2021.
Investors will be looking for more detail on the medium-term outlook when Persimmon reports its full-year results in full in March.
Games Workshop
Games Workshop’s latest results didn’t offer anything to get the market too excited after a 40%-plus surge for the shares seen over the last 12 months.
There’s no doubt 2025 was a banner year for the fantasy miniatures specialist as it joined the ranks of the FTSE 100 and delivered several upgrades to guidance. The latest figures may have been another record set of results, accompanied by a healthy increase in the dividend despite a hit from US tariffs, but a pause for breath in the share price is no major surprise in the circumstances.
Licensing revenue is an area which attracts considerable market excitement – given the ability to capitalise on Games Workshop’s intellectual property at virtually no added cost to the company.
However, as the first-half results show, this source of revenue is lumpy and unpredictable, falling significantly year-on-year in the period. The much-touted TV and film rights agreement with Amazon is still a decent way off delivering meaningful revenue and cash flow to the business.
Management recognises the need to balance the licensing opportunities to make sure Games Workshop protects its brands and doesn’t do anything to undermine the devotion of the fans which have made the business such a success story.
Interestingly, this extends to a cautious approach to AI, particularly in terms of content and design within the business.
Rentokil
After a long search, Rentokil has finally found a new CEO. Mike Duffy has experience running companies with hundreds of locations spread across a large area, as well as business transformation, which is a good fit for Rentokil.
He’s also based in the US, which has been a problematic region for Rentokil and a region the company needs to get right given it spent $6.7 billion four years ago on a major US acquisition.
Duffy’s skills are certainly relevant, and he joins at an interesting time for the company, given turnaround efforts are well underway.
The lacklustre market reaction to his appointment might simply reflect Duffy’s position as an unknown name to many investors, particularly in the UK.
Whitbread
Some good news from Premier Inn owner Whitbread at last. There are tentative signs of progress in the UK after a gloomy period. Germany is doing well and it has upgraded cost efficiency guidance.
It’s been a while since positive momentum has been seen across all parts of the accommodation side of the business, hence the share price jump on the news. Whitbread now needs to keep it going and show the recent progress wasn’t simply a lucky blip.
A lacklustre economic outlook in the UK is not helpful as it could deter domestic travel. Fortunately, Premier Inn chimes well with overseas visitors which helps to keep the tills ringing. It’s a competitive market but Premier Inn has a strong brand and is well positioned to thrive once economic conditions improve and drive greater business and leisure travel.
The food and beverage arm continues to be a drag, but it is far from disastrous. Whitbread has low expectations for that part of the group and has been removing some of the lower-returning restaurants from its estate and converting some into extra hotel rooms. In time it should have a more streamlined and focused restaurant operation.
Dan Coatsworth: Head of Markets
Dan Coatsworth is AJ Bell's Head of Markets. Dan has been with the company since December 2012 and has more than 18 years' experience in the industry, following the markets and all things investing. He...
