Market Overview

Dear Investor,

This week, market participants have been wrestling with one simple question: will it be TACO Trump or something more serious? After months of calm and steady gains, the US and China trade narrative has once again taken centre stage, shaking confidence and injecting a dose of volatility back into global markets. It all started when President Trump threatened to impose 100% tariffs on Chinese goods, sparking fears of a renewed trade war and prompting a wave of risk-off sentiment across equities, commodities and currencies alike.

Of course, investors have seen this act before. The so-called “TACO Trump” trade, short for “Trump Always Chickens Out,” has become something of a Wall Street inside joke. The pattern goes like this: Trump makes a dramatic tariff threat, markets sell off, and then he walks it back, claiming progress or goodwill, sending stocks back up. Over the weekend, he seemed to follow the script again, praising President Xi and hinting that cooperation remains possible. But with China signalling that its rare earth restrictions could extend globally and the US considering tighter controls on strategic sectors, the stakes this time look higher than a typical TACO rerun.

Technically speaking, the S&P 500’s chart reflects this tug of war perfectly. Last Friday’s bearish engulfing candle carved out a wide range that has since contained all of this week’s price action. The market has effectively been bouncing around inside that candle, a visual representation of investor indecision. This pattern is being mirrored across several major indices, from Europe to Asia, highlighting how tightly global sentiment remains linked to Washington and Beijing’s every move. The upper and lower boundaries of last Friday’s range have become the market’s new parameters, defining whether confidence or caution will dominate the weeks ahead.

Wishing you a fantastic weekend,

Tom

Market Movers

On the rise: Mitie (LSE:MTO) +11.2% on the week

Mitie surged higher this week following an upbeat trading update that lifted full-year profit guidance and reignited share buybacks. The UK’s largest facilities management and compliance group now expects operating profit of at least £260m for FY26, up from £234m last year, supported by strong organic growth and an expanding contract pipeline. The announcement of a new £100m buyback programme underlined management’s confidence in the balance sheet and the momentum behind the group’s transformation strategy.

The integration of Marlowe, completed in August for £350m, was another highlight. CEO Phil Bentley said the deal was a “major milestone” in Mitie’s plan to expand into business-critical compliance services, with at least £30m of cost synergies expected by FY28. Early progress has been positive, with operational efficiencies and procurement savings already being implemented. Combined with solid cash generation and leverage within its target range, Mitie’s latest update paints the picture of a business growing steadily in both scale and profitability.

REGENCY VIEW:

Mitie (MTO) remains part of our FTSE Investor open positions and continues to perform well, delivering consistent growth and rising profitability. The stock combines solid fundamentals with value appeal, supported by a forward PE of 11.6, a well-covered 3% dividend yield and a strong commitment to shareholder returns through buybacks and disciplined capital allocation.

On the slide: Whitbread (LSE:WTB) -11.6% on the week

Whitbread’s share price dropped this week after the Premier Inn owner reported a dip in profits and revenue for the first half of the year. Adjusted pre-tax profit fell 7% to £316m and revenue slipped 2% to £1.54bn, reflecting softer food and beverage sales as the group continues to reshape its restaurant portfolio under its Accelerating Growth Plan. While accommodation sales at Premier Inn UK held broadly flat and continued to outperform the wider market, higher cost inflation and restructuring costs weighed on margins, leading investors to take a cautious view despite the company reaffirming its full-year outlook.

Looking further ahead, Whitbread reiterated its ambition to return £2bn to shareholders through buybacks and dividends by FY30, supported by a strong freehold estate valued between £5.5bn and £6.4bn. Although the interim dividend was maintained at 36.4p, lease-adjusted leverage ticked up to 3.2x following recent sale and leaseback transactions. With the UK market returning to growth and the group on track to expand its Premier Inn estate to 98,000 rooms by the end of the decade, the long-term growth story remains intact even if near-term cost pressures continue to temper investor enthusiasm.

REGENCY VIEW:

Whitbread remains part of our FTSE Investor open positions, though the stock came under pressure this week following softer half-year results and rising cost inflation. Despite the sell-off, the fundamentals remain intact. A forward PE of 15, a dividend yield above 3% and solid free cash flow generation support the long-term growth story as Premier Inn expands both in the UK and Germany.

Sector Snapshot

Real Estate and Utilities led the market this week, marking a clear shift in tone from the commodity-led strength seen previously. Materials and Consumer Staples also performed well, suggesting investors were gravitating toward sectors offering income stability and defensiveness amid lingering uncertainty over global growth.

On the downside, Energy reversed sharply after last week’s rally, while Healthcare and Industrials also slipped. Tech and Financials lost ground too, pointing to a broader pause in risk appetite as markets consolidated following several weeks of rotation.

UK Price Action

Last Friday’s sharp drop came on the back of Trump’s renewed tariff war with China, sending the FTSE into a key technical zone of broken resistance turned new support. After four days of consolidating inside Friday’s range, price has now slipped lower, hinting that short-term momentum could be starting to shift.

If the FTSE ends the week with a weak close, it would confirm that this change in tone is taking hold and open the door to a deeper pullback. However, if buyers can mount a recovery and drag the market back toward Friday’s close, it would suggest dip buyers are still active and that the broader uptrend remains in control.