WeekWatch

• The US Supreme Court’s ruling on “Liberation Day” tariffs opens up additional trade and market uncertainty.
• UK market performance underpinned by Bank rate cut expectations.
• Brewdog – why retail investors will be left empty-handed.

The tariff two-step and more trade uncertainty

It was a twin speed US market last week, relatively subdued until the news on Friday that the US Supreme Court had ruled President Trump’s “Liberation Day” tariffs illegal. Both the S&P 500 and Nasdaq ended the week more than 1% higher, with the latter delivering its first positive weekly returns since early January. 

Trade and tariff-sensitive companies rose following the Court’s decision, helping retailers and luxury manufacturers. Technology shares also rose. Carlota Estragues Lopez, SJP’s equity strategist notes that “the Court’s decision to reject Trump’s tariffs comes at a time when investors were already pricing in a higher risk premium for US assets because of concerns over the level of AI spending. This latest move further dampened sentiment towards US equities and saw the US dollar fall back into weaker territory.”

The decision does not mean that tariffs are off the table for the US administration, nor does it remove uncertainty for investors. Instead, Trump’s response was to impose a blanket 10% global tariff. This was swiftly raised to 15% over the weekend. These new tariffs will expire in 150 days unless renewed by Congress. As Hetal Mehta, chief economist at SJP says: “Tariffs are still a very core part of the way Trump wants to operate. It is also about attempting to keep the effective tariff rate steady.”

In addition, the Court provided no guidance on what will happen to the $150 billion plus in tariff revenues already collected. If Trump continues to wage tariff “lawfare”, trade clarity will remain elusive. This is likely to lead to more adverse sentiment for both companies and investors. However, as Hetal adds: “It’s worth remembering that even with the 15% tariffs there are a number of exemptions. For example, the UK with an existing 10% tariff rate with the US probably won’t see this go to 15%”. 

The news on tariffs overshadowed data showing fourth quarter 2025 economic growth (GDP) was only 1.4% compared to the previous quarter. This was way off the 2.8% figure expected. The culprit appears to have been the six-week federal government shutdown and the consequent dip in government spending. 

Stripping out the effect of this, the performance was more on track.   

UK shares signal rate cuts ahead

Despite recent poor UK data releases on jobs and growth, the FTSE 100 ended the week more than 2% stronger, with the index once more near its all-time high. While it seems counterintuitive that shares are responding positively to disappointing news, there often isn’t much of a positive relationship between the health of the economy and stock market returns. This is because economic data releases are based on historic events. In contrast, stock markets reflect future expectations. 

With UK unemployment at a near five-year high, anaemic economic growth in the final quarter of 2025, and headline inflation falling, a rate cut by the Bank of England is predicted for March. 

A further catalyst for the FTSE 100 is that it is made up of companies with significant operations beyond the UK. Demand in the US, Asia and parts of Europe are better than the UK. This picture is not expected to change much in 2026. While positive for larger UK companies, it works against UK smaller companies, which are more reliant on the domestic market. This explains why UK small caps are underperforming despite their relatively low valuations. 

Why did it go so wrong at Brewdog? 

Brewdog has confirmed it is exploring a sale of its loss-making business. Any transaction will likely mean that the 200,000+ retail shareholders, some of whom subscribed through the initial equity punk investment scheme in 2009, are likely to be left with nothing. 

While not a listed company, Brewdog’s high-profile and brand presence, including international breweries, bars and hotels, makes it an interesting and sobering tale. Perhaps the most significant culprit was an investment by private equity firm TSG Partners in exchange for a 22.3% stake in the company. 

The deal valued Brewdog at £1 billion but also made TSG Partners a preferred shareholder, meaning it ranked ahead of the equity punks. It was promised a return in excess of its initial investment in the event that Brewdog was sold, or if it listed on the stock market. 

Despite a value of about £2 billion in 2021, Brewdog has not been profitable since 2019. While this reflected company specific concerns, industry trends were also against the company. There has been a slump in beer sales as consumers spend less on nights out and/or reduce their alcohol consumption. Rising competition has meant there are other “edgy” beer options in pubs and supermarkets. Adverse publicity regarding the alleged management style has been unhelpful to the brand’s image. All this combined to whittle away Brewdog’s value, but not its financial obligation to TSG. In short, Brewdog is now in a position where it owes more to TSG than it is currently worth, wiping out any value for retail investors. 

A problem for Brewdog’s retail investors is that there has been no formalised way of buying or more likely selling any shares, especially when conditions for the company deteriorated. A holding in the company was, no pun intended ’illiquid’, meaning retail investors had no way of cutting their losses.    

Thousands fall for investment scams

Thousands of people fell victim to investment scams last year, according to the latest data from the Financial Ombudsman Service (FOS), the independent dispute resolution service.¹

The Ombudsman Service said it received around 31,300 complaints from consumers about fraud and scams in 2025, citing online investment scams as the largest source of complaints.

Around 20,000 complaints were due to people making authorised payments as part of a scam, a figure that includes authorised push payment (APP) scams.

In an APP scam, criminals typically manipulate victims into sending money directly from their bank account or using a debit or credit card. Of these complaints, more than half related to online investment scams.

Online investment scams usually begin on social media and typically promote high-return opportunities that claim to deliver fast and guaranteed profits.

Other fraud and scam cases seen by FOS last year included employment scams and unrecognised bank transactions.  

Tips to avoid being scammed:

• If it sounds too good to be true, it probably is. Common red flags include “risk-free” claims, guaranteed returns, or bonuses for investing quickly.
• Do not click on links in unsolicited messages. Scammers often approach victims via email, social media and messaging apps.
• Be alert to pressure tactics. Scammers frequently use urgency to persuade victims to transfer money or invest quickly.
• Do not share personal information. Never share ID documents, bank login details, card details or passcodes with anyone.