Archived articles
Although the content of the article(s) archived were correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.
WeekWatch
Stock Take
No letting up for AI contagion
What industries will AI disrupt and render irreparably less profitable? That is the question many investors are asking, after the wave of sell-offs seen across different sectors in recent weeks.
Two weeks ago, it was publishing companies and the software sector. Last week, those affected included insurance brokerages and wealth management firms.
The routine is as follows. A new AI tool is released that can replicate or improve the function or valued-added associated with a particular industry or sector. This is followed by an immediate sell-off, with many companies witnessing double-digit percentage corrections.
This highlights some of the issues with short-term investing. Currently, no one knows what new AI tools will be released in the next month, let alone in next year. And even then, it is impossible to predict what the impact of these tools will be. As a result, there have been some large swings in share prices.
Recent sector-specific volatility also reaffirms the importance of diversification. Joe Wiggins, investment research director at SJP, says: "The rapid progress of AI technology is creating significant uncertainty as markets attempt to understand who the winners and losers will be. At this stage we are seeing focused bouts of short-term speculation, rather than anything more fundamentally driven. Given the pace of change this uncertainty is likely to persist, making prudent diversification more important than ever for the long-term investor."
Tech struggles and 100-year bonds
Technology stocks continued to fall in the second half of last week, with some big names among the casualties. Apple, Amazon and Alphabet all saw declines of 5% or more.
The wider sector is facing pressure on two fronts. Investors are worried about the very high levels of investment needed to keep up in the AI arms race. Meanwhile as recently shown, there are concerns that whole sectors may be at risk of being superseded by AI altogether.
This AI volatility has caused US equities to struggle. By the close of play on Friday, the S&P 500 was at the level where it started the year, while the Nasdaq was down.
This did not stop Alphabet from launching a multi-billion-dollar 100-year bond to fund its AI development. It is not the first company to launch such long-term bonds, though they are rare. JCPenney issued century bonds in the 1990s but went bankrupt 23 years later. Other examples of “century bonds” include Ford and Motorola. In at least one case, back in the 1800s, one company (Canadian Pacific Corporation) even offered a 1,000-year bond.1
To put these numbers into perspective, Google itself is only 27 years old.
Commenting on the Google bond issuance, Ian Entwisle, senior fixed income analyst at SJP, said: “Demand for this bond appears to have been solid rather than exceptional, as it is not currently trading at a notable premium. It is nevertheless the kind of bond that is attractive to insurance/pension/asset and liability management (ALM) type of investors who are looking for attractive cashflows over a very long-time horizon.”
Asian progress
Japanese stocks continued the upward path they have been on since Prime Minister Sanae Takaichi’s recent emphatic election victory. Investors liked her messaging around greater economic stimulus.
Japan is not the only Asian market performing well. The South Korean index, the Kospi, has doubled over the past year. This continued last week, as the index finished around 4% up. The Korean market has been helped by previously low valuations, the strength of its semiconductor businesses and the broader pick-up in sentiment across emerging markets.
These strong performances, combined with the ongoing volatility in the US, have meant Asian markets have had their best start compared to US equities since at least 2000.
Mixed economic figures around the world
On Wednesday, strong US payroll data was released for January. This showed employment rose by 130,000 jobs month-on-month, the strongest reading since December 2024 and roughly double what was expected.
As ever, though, the devil is in the detail. Job gains were not evenly spread. Healthcare jobs were the main reason for the positive figures, so the situation may remain challenging in other areas.
Turning to the UK, the Office for National Statistics (ONS) revealed that the UK economy grew by just 0.1% in the last quarter of 2025. Although this was slightly below estimates, it was not enough to alarm economists. The fact is that the British economy - home to an ageing population and low productivity growth – is unlikely to return to high growth soon.
During the week the FTSE 100 hit a fresh record high, and even though it retreated slightly, it still finished higher on the week. Investors are currently pricing in a potential interest rate cut next month, while corporate takeover and defence spending also proved supportive.
1Investopedia, Why Do Companies Issue 100-Year Bonds? - Accessed 13/02/2026
Wealth Check
Making Tax Digital on the horizon
Hundreds of thousands of landlords and sole traders have only weeks to prepare for massive changes to the tax system that will take effect on 6 April.
The introduction of Making Tax Digital (MTD) has been described as the biggest shake-up in tax returns since self-assessment was launched more than 30 years ago.
In the first wave, landlords and sole traders earning more than £50,000 from property income and self-employment will have to keep digital records and submit tax records to HMRC five times a year.
They will also have to use new HMRC-compatible accounting software to manage their tax affairs. The dates for submitting tax returns and paying any tax due will not change.
HM Revenue & Customs is urging landlords and sole traders to act now to make sure they are prepared for the introduction of MTD. Those who fail to follow the MTD rules will face penalties. Each missed submission deadline will incur one penalty point. Four penalty points mean a £200 fine. There are also financial costs for paying tax late, ranging from 3% of the amount owed to up to 10%.
MTD will be rolled out in stages. Traders and landlords with income of more than £30,000 will need to comply with MTD from 6 April 2027. It will come into force in April 2028 for those earning above £20,000.
Sole traders, landlords and agents can find guidance on the new way of reporting via this link.
The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is dependent on individual circumstances.
In The Picture
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
Past performance is not indicative of future performance.
The information contained is correct as at the date of the article. The information contained does not constitute investment advice and is not intended to state, indicate or imply that current or past results are indicative of future results or expectations. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James's Place.
Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2026. FTSE Russell is a trading name of certain of the LSE Group companies.
“FTSE Russell®” is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.
© S&P Dow Jones LLC 2026; all rights reserved
Source: MSCI. Certain information contained herein, including without limitation text, data, graphs, charts (collectively, the “Information”) is the copyrighted, trade secret, trademarked and/or proprietary property of MSCI Inc. or its subsidiaries (collectively, “MSCI”), or MSCI’s licensors, direct or indirect suppliers or any third party involved in making or compiling any Information (collectively, with MSCI, the “Information Providers”), is provided for informational purposes only, and may not be modified, reverse-engineered, reproduced, resold or redisseminated in whole or in part, without prior written consent.
Source: Bloomberg. BLOOMBERG®” and the Bloomberg indices listed herein (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by the distributor hereof (the “Licensee”). Bloomberg is not affiliated with Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products named herein (the “Products”). Bloomberg does not guarantee the timeliness, accuracy, or completeness of any data or information relating to the Products.
SJP Approved 16/02/2026
