Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The FTSE 100 made new record highs on Tuesday, taking its cue from a strong rebound on Wall Street and the added tailwind of sterling weakness.
Moves towards the end of the shutdown in Washington had primed US stocks for big gains at the market open, and the pound fell after weak UK jobs figures which increased the prospect of an interest rate cut when the Bank of England meets next month.
Poor retail sales only added to the impression of a weakening economy heading into a Budget which could further undermine consumer confidence.
A softer domestic currency is typically good news for the FTSE 100 as it boosts the relative value of its dominant overseas earnings.
Vodafone
Telecoms outfit Vodafone ticked three boxes with its first-half results as it promised the first dividend increase in seven years, said it would hit the top end of profit and cash flow guidance, and returned to growth in its key German market.
For years, Vodafone has been a stock market zombie flailing around with little apparent purpose but the transformation programme being delivered by CEO Margherita Della Valle has injected new life into the business.
Returning to a progressive dividend policy, after the promised dividend hike for the current financial year, would be a key milestone in the company’s recovery after years when the payout has often been cut or kept flat.
Along with the latest tranche of buybacks, it suggests measures like selling off its Italian and Spanish operations and merging its UK business with Three have delivered tangible benefits along with the operational improvements which have been made in the background.
One swallow doesn’t make a summer and investors will be looking for Vodafone to build on this strong performance before they are fully convinced that a decade or more of struggle is genuinely behind it.
SoftBank / Nvidia
One of the world’s biggest tech investors selling out of Nvidia is a major event for markets. People are looking for clues that the tech rally is close to the top, and SoftBank’s profit-taking in the chip giant is significant.
Investors typically sell out of positions when they believe the valuation is too rich, the growth prospects for the company are less attractive than before, or they’ve found something better to back and need cash to make that investment.
SoftBank is an active investor and has a deal to invest billions of dollars into OpenAI, which suggests that it still sees massive opportunities to make money from the AI revolution. Selling out of Nvidia while also trimming its position in T-Mobile helps to top up the war chest for the next wave of AI-related investments.
Nvidia has had a storming run on the markets and SoftBank might think it is prudent to cash in while the going is good.
Nvidia’s role in an AI world is already well known, yet OpenAI’s position is still evolving, so it might simply be that SoftBank sees the latter as a better way of profiting from the tech explosion going forward, rather than sticking with yesterday’s trailblazer.
What’s important for markets is the fact that SoftBank’s exit from Nvidia isn’t the Japanese group washing its hands completely of all things AI.
Princes Group
Princes’ IPO had all the appeal of a tin can stuck at the back of a cupboard – not very exciting but still a potential source of sustenance for those willing to be brave.
The lacklustre investor demand for its stock offer saw the shares priced at the bottom of the IPO range and fall further once they hit the market. It wasn’t a great start to life as a listed entity, so it was inevitable that management would have to work harder to bang the drum and convince more people that the business is worth a look.
Princes Group has presented a nine-month trading period, two thirds of which was already covered in its IPO prospectus. Investors weren’t sure how to consume the limited information as the shares moved up and down like a yo-yo in early trading.
A lot of investors will be sitting on the sidelines until there is a full set of financial results by which to judge the company post-listing. Princes will have to let its business performance do the talking rather than management if it is to truly win over the market.
4imprint
US promotional products business 4imprint may not want to print the headlines from its 2025 performance on a mug but its latest update suggests the situation is not as bleak as feared.
Earlier in the year, 4imprint had painted a bleak picture as it warned of the impact of tariffs on its supply chain and cost base. Now it turns out performance has been resilient, with average order values not budging compared with last year and order intake only falling modestly.
Investors will be pleased to see 4imprint maintain operating margins despite the increase in costs associated with trade levies.
The company is one of the leading players in the $25 billion-a-year North American promotional market, which remains highly fragmented, providing opportunities for it to claim market share even against a tricky economic backdrop.
Selling a wide range of promotional products like branded bags, pens and stationery to companies in North America, 4imprint largely doesn’t manufacture the goods it sells, instead outsourcing the work to third parties. This means it has limited capital needs and generates plenty of cash flow.
The big decline in 4imprint’s orders from new customers is a nagging concern. The market will hope to see an improvement in this trend sooner rather than later even if a strong balance sheet provides a buffer to ride out further volatility in trading.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
