Stuff tech, buy rats!

Three things explain what has happened to global money in 2026. Oil. AI. Interest rates. And all of these played out in force this week on stock markets. With a surprise appearance from a rat.

Anyone who has filled up a car recently will not be surprised that oil prices are at their highest point since May. Brent crude costs $114 a barrel. People are worried that Trump will ramp up hostilities with Iran after the mid-term elections on 3rd November.

As for AI it’s spend spend spend as corporate FOMO intensifies. Which means borrow borrow borrow. The impact has been negative and most of us who looked at an ISA or a pension this week will have seen red numbers.

Investors smell a rat at Meta

This week, Meta announced its Q3 results which included plans to borrow more. Across the board, Big Tech’s free cashflow is turning negative. Their bank balance is starting to resemble people’s accounts in the last week of the month, just before payday. If you’re a company, you can do one of 2 things when the purse gets empty. Borrow cash. Or issue new shares – “Hi, I’ll give you a slice of my business in exchange for some cash.”

It’s getting to the point where, unless AI can send a real dancing cat with sparklers on its paws to my house in a flying Tesla Taxi to pour me a glass of champagne whilst singing Nessun Dorma, expectations are not going to be met and the world will sell tech stocks in a huff. This is broadly what investors are worried about.

The upshot? This week Meta is down about 10%. Korea’s chip-heavy KOSPI Index and Japan’s Nikkei hit a three-month low and China officially entered bear market territory. This is technically defined as a 20% fall from a high – the CSI 300 Index is over 20% lower than its June high this year. Growth has slowed, the real estate sector has run out of fizz and consumers aren’t spending.

And rats beat the technocrats 

Our home-grown FTSE 100Also called “Footsie”, the name for the share index made up of the largest 100 companies by market capitalisation (total value of all shares) listed on the London Stock Exchange. has fared better. Turns out old school is in vogue. Guess what this week’s success story was?  

I’ll give you a clue. Rats. There is big money in pests. And AI cannot yet kill rats although I bet all those data centres have lovely corners for nesting rats. Rentokil shares shot up by nearly 9% this week on better company earnings and an improved outlook. 

Since you ask (and yes, I have been down a pest rabbit-hole this morning), whilst rodents account for about half of Rentokil revenues in the UK, it’s more like 10% in the US where ants and cockroaches dominate and termites are estimated to make up about 20% of revenue. You’re welcome.

Don’t be a scaredy rat

There is a serious point to make here, especially for newer investors. Storms come and storms go. These are volatile times. People lose money when they panic, hit 'Sell' at nerve-wracking times, or try to time and anticipate corrections. We can ride out corrections and wobbles with long-term savings. Diversify. Have some ratty stuff as well as tech stuff. And don’t lose your nerve and sell when the papers are having a honk about falling markets. 

People wrote to me in a panic during Covid, during the first Iran hostilities, after Liz Truss’ Budget, in 2008 – and more. My general advice is to lose your online password and ignore it. You cannot time stock markets. And large reputable firms and mainstream indices always bounce back. If you don’t really know how to diversify yourself, investigate a multi-asset fund or consider a large global Exchange Traded Fund. About £1 in every £8,000 you have in the MSCI World IndexA global index that tracks large and medium-sized companies from 23 developed countries around the world. would be allocated to Rentokil, since you ask! And about £140 would be allocated to Meta.

Looking ahead, next week is Budget Week as Healey reveals his deal-y for the UK. We’ll be bringing you a budget special next Wednesday evening with our summary of all the major changes which will impact your pocket.

Have a lovely weekend, everyone, and bunker down in the face of Storm Boelo. Feels like the weekend to make the year’s first apple crumble and stay indoors.

Holly