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The US midterms made the UK Budget’s effect on the stock market look like a non-event. But that means some stories that would have dominated any other week might have gone unnoticed.
Three caught my attention – and one has gone straight onto my Buy list.
Drastic Dave’s FTSE 100 turnaround
Sir Dave Lewis began his time at Diageo (LSE:DGE) with the obvious stuff – selling non-core assets and cutting the dividend. That’s sensible, but it isn’t a long-term growth strategy.
Getting sales moving is the hard part. But the latest update from earlier this week was very encouraging on that front. Organic net sales grew 1.4% in the three months to September, with Latin America and Asia Pacific both up by mid-single digits. The stock climbed as a result, but it wasn’t all good news.
US sales fell 3.7% and inventory levels remain high. With Tesco warning that Christmas alcohol sales this year are likely to be “moderate” there’s still plenty to stop investors thinking they’re in the clear.
Still, Diageo’s return to growth is impressive, especially in the midst of a deep restructuring project. Investors waiting for signs of a turnaround might want to start paying attention.
MercadoLibre’s margins
Argentina’s presidential election isn’t until 2027, but recent volatility shows how much politics can matter in Latin America. This week though, the issue for MercadoLibre (NASDAQ:MELI) was margins.
The shares fell around 13% on Thursday (5 November). That’s despite the company selling 38% more stuff than the year before and generating 45% more revenue:
| Metric | Q3 2026 | Change |
|---|---|---|
| Revenue | $10.75bn | +45% |
| Gross merchandise volume | $23bn | +38% |
| Credit portfolio | $18bn | +62% |
| Operating margin | 6.3% | Down from 7% in Q2 |
Lower margins meant earnings per share missed analyst expectations. But the firm says it’s deliberate – it’s investing in fulfilment capacity ahead of Q4 and expanding its affiliate programme in Brazil.
In other words, these are planned investments rather than rising costs. It’s lazy to call MercadoLibre a Latin American Amazon, but the approach is the same and it worked out pretty well for Jeff Bezos.
There’s a fine line between investing and spending. But this is a formula that I’ve seen work very well across a number of industries and at $1,500 (below where I sold it in 2024), the stock is on my Buy list.
Duolingo’s talking shareholder language
Duolingo shares bounced back sharply this week. Part of that was a relief rally in a stock that had been one of the market’s biggest AI casualties, but the numbers were genuinely strong.
Daily active users grew 29%, accelerating for the second consecutive quarter. And subscription bookings grew 16% – ahead of revenue growth of 14% – a sign of faster revenue growth to come.
The open question is monetisation in a world where AI can teach languages for free. Whether Duolingo has long-term pricing power remains to be seen, so I’m staying on the sidelines for now.
Working in silence
Star footballer Harry Kane’s Ballon d’Or speech talked about working in silence and letting success be your noise. In the stock market, this felt like a week for that.
On another week, Diageo, MercadoLibre, and Duolingo might have made the headlines. But while everyone was watching Washington and the Nasdaq these three were quietly getting the job done.
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Stephen Wright owns shares in Amazon and Diageo.
