eyeQ: macro conditions improving for this FTSE 100 struggler

“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ

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Relx

Macro Relevance: 44%
Model Value: 3,272.26p
Fair Value Gap: -48.47% discount to model value

Data correct as at 4 February 2026. Please click glossary for explanation of terms. Long-term strategic model. 

SaaS (Software as a Service) apocalypse is the dramatic headline dominating financial media this morning. Anthropic announced a new addition to the Claude Cowork artificial intelligence (AI) tool that will help automate work for the legal industry (and knowledge industries - i.e, the “professions” - more broadly); that speaks to fears about agentic LLMs (large language models) cannibalising white-collar work.

For workers the fear is job losses; for company management the implication is loss of revenue. 

In the UK, the biggest hit was on RELX (LSE:REL) where legal work accounts for around a fifth of total sales. The stock fell nearly 13% yesterday - its biggest one-day drop since the late 1980s. 

For investors, the question now is whether this is the start of a bigger sell-off, or a dip-buying opportunity.

Most of the analysis required to answer that question will be bottom-up company work. For example, Relx integrates generative AI into its owns tools (Lexis+, Protege AI researcher solutions). Does that make Relx an AI provider rather than a simple user interface? If so, the firm retains some competitive edge and pricing ability. 

That’s a job for fundamental analysts, but it’s also worth checking in on the macro picture.

eyeQ’s Macro Relevance score is 44%, so big-picture stuff such as growth and inflation account for just under half of shifts in the stock price. Remember, we need macro relevance to be over 65% for a stock to be in a “macro regime”, which is necessary to validate any fair value gap (FVG) and generate a trade signal.

That’s important because after this sell-off, Relx sits around 48% cheap to macro conditions. That’s the cheapest FVG since our database started in 2009. On FVG terms alone, the stock is cheap, but low macro relevance means there’s no official signal. 

But, while there’s no official signal, it is worth noting that eyeQ model value has turned higher. Macro conditions are improving. From a purely macro perspective, there’s value in Relx down at these levels.

Source: eyeQ. Past performance is not a guide to future performance. 

Useful terminology:

Model value

Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.

Model (macro) relevance

How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.

Fair Value Gap (FVG)

The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.

Long Term model

This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.