Daily market update: Games Workshop, Adidas, CrowdStrike

“European and Asian markets were on the front foot on Wednesday amid hopes that Donald Trump might partially wind back tariffs if deals could be struck with Canada and Mexico,” says Russ Mould, Investment Director at AJ Bell.

“Investors are looking for any signs that Trump is open to deals rather than doling out tariffs and refusing to listen. US commerce secretary Howard Lutnick hinted we might soon see an amendment to the tariff structure that came into force this week.

“Markets would take even the slightest rollback from Trump as a positive sign, helping to settle nerves following concerns about a full-blown trade war.

“There was a clear shift in investor sentiment from risk-off to risk-on. The top risers and fallers list on the FTSE 100 illustrated this trend. Utilities, tobacco, pharma and telecoms, which are sectors frightened investors would normally hide in, were all out of favour. Higher-risk and more economically sensitive sectors such as mining, airlines and packaging were in favour.

“The DAX soared by 2.6% after German leaders proposed to reform the country’s borrowing rules to free up investment and support the economy. Energy, industrials and basic materials stocks rallied hard, with investors notably chasing companies linked to the construction sector. The DAX has been quite the stock market darling this year, taking many investors by surprise and putting US equities firmly in the rear-view mirror.”

Games Workshop

“In a world full of uncertainty around economics, politics and consumer and business confidence, it’s refreshing to see a company be able to get on with the job of making money. Games Workshop is showing resilience in the face of a difficult market backdrop and it’s impressive how it has prospered this year.

“Games Workshop’s recent promotion to the FTSE 100 puts pressure on management to keep delivering good news. They will want to show the world that its inclusion in the premium UK index is not a brief visit and that the business has what it takes to stay in the top league.

“Its customers are incredibly loyal and fully immersed in Games Workshop’s fantasy worlds. Some are building collections of miniature figures and others are playing the vast array of games; Games Workshop is a master at getting these customers to keep splashing the cash. At the same time, it also keeps a close eye on costs and runs an efficient ship.

“The licencing of its intellectual property is being done under a watchful eye and only the most promising ideas are getting the green light. This quality control might mean it misses out on some potential income, but Games Workshop wants to uphold its brand values and ensure that its reputation isn’t tarnished by going down the Disney route of milking assets until they are bone dry.”

Adidas

“While some upstarts have managed to gain traction in certain niche markets, the sportswear space is essentially a duopoly divided up between Adidas and Nike. Over the last year or two, Adidas has left its US rival in the dust as it has executed on a turnaround strategy.

“Adidas generated impressive growth in 2024, lending some credibility to an ambition of being the top sportswear brand in every market outside the US.

“However, the shares tripped up as Adidas sees growth slowing in 2025 and it guided for profit levels which fall significantly short of consensus and imply only a relatively modest improvement in margin performance.

“Whether this reflects some sensible conservatism on the part of CEO Bjorn Gulden, under whom Adidas has beaten expectations since taking over in early 2023, or a sign that consumers may be reining in spending, will likely become clear through the course of the year.”

CrowdStrike

“The recovery in CrowdStrike’s shares after its role in last summer’s massive IT outage has been impressive, but it has come to a shuddering halt after the company’s latest earnings report.

“The fact CrowdStrike is forecasting first-quarter revenue below estimates demonstrates it is finding it harder to attract new business and that existing clients are maintaining a tight leash on spending.

“While it may be difficult for customers to go elsewhere given CrowdStrike’s products and tools are embedded in their systems and day-to-day operations, it appears to be getting more difficult for the supplier to upsell more expensive packages.

“CrowdStrike expects to see an acceleration in the second half of the year but the market will want to see evidence before giving the company any credit for it.

“Because it is only in the early stages of being a profitable business, CrowdStrike’s shares look expensive based on earnings multiples. Therefore, investors need to be confident that substantial earnings growth is on the way if they are going to continue to be prepared to pay a high rating.”

These articles are for information purposes only and are not a personal recommendation or advice.