Blogs

Please see below, an article from EPIC Investment Partners which discusses the ongoing stagnation in the US housing market. Received today – 02/06/2026

The US housing market remains trapped in one of the most prolonged periods of stagnation in modern history. More than three years after activity collapsed in 2022, both new and existing home sales continue to languish near recessionary levels, leaving the market effectively paralysed.

The scale of the downturn is striking. New home sales have fallen 23.8% from their December 2021 peak of 816,000, while existing home sales have plunged 36.6% from their January 2022 high of 6.34 million. Since early 2023, transaction volumes have largely flatlined, defying traditional market dynamics and showing little sign of a sustained recovery.

What makes this standstill particularly unusual is that it has persisted despite a substantial decline in mortgage rates. Between October 2023 and March 2026, average mortgage rates fell around 2% from above 8%. Under normal circumstances, such easing in financing costs would unleash pent-up demand and reignite housing activity. Instead, new home sales declined by a further 7% during the same period.

The explanation lies in affordability. According to the Case-Shiller Home Price Index, home values have continued to climb to levels that overwhelm the benefit of lower borrowing costs. While mortgage payments may have become cheaper, the underlying cost of purchasing a home remains prohibitively high for many households.

This has created a crisis on both sides of the market. Prospective buyers are increasingly priced out by elevated home values, while existing homeowners remain reluctant to sell. Millions refinanced into mortgage rates near 3% during the pandemic and now face a steep financial penalty for moving. Selling would often mean replacing a low-cost mortgage with one carrying significantly higher monthly payments on a more expensive property.

These so-called “golden handcuffs” have severely constrained supply, reducing turnover and reinforcing the market’s paralysis. With fewer existing homes available, buyers face limited choice, while sellers remain locked into place.

Recent data suggest the pressure is mounting. Existing home sales remain weak, new home sales fell another 6.2% in May, and builders are grappling with rising inventories of unsold properties. Although national home prices recorded a modest month-on-month decline, the adjustment has been far too small to restore affordability or meaningfully stimulate demand.

The result is a housing market caught in a self-reinforcing cycle. Buyers cannot afford to enter, sellers cannot afford to move or leave, and transaction volumes remain stuck at historically depressed levels.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alexander James Roberts

2^nd June 2026

Please see the below article from Tatton Investment Management discussing improving market sentiment driven by lower oil prices and strong tech performance, despite ongoing global risks, received this morning – 01/06/2026.

Calmer markets

Global stocks pushed up last week and have continued to move higher as this week starts, powered by semiconductor companies. News of a 60-day US-Iran ceasefire extension saw oil prices fall to $90pb, calming nerves and lowering bond yields. May turned out to be another strong month for markets, with falling volatility.

A US-Iran deal has been “imminent” for weeks, but Trump seems to want it wrapped up before the midterms at least. Even without one, energy markets have been surprisingly resilient, with the Middle Eastern oil shortfall ameliorated by other sources and falling demand. Western countries have muddled through, though other regions have felt real pain. The sense of crisis has abated, but longer-term oil prices still suggest traders expect tight supply into the winter. We would certainly feel the effects then (Europe’s gas storage is low, seasonally-adjusted) but, for now, markets have fared better than many expected.

Chinese oil demand has fallen and the government has tightened liquidity (bond issuance has increased as Beijing has ordered companies to pay suppliers quicker). The oil shock is directly hampering Chinese growth, rather than indirectly through inflation. That’s now reflected in weaker Chinese stocks. Beijing could spur growth by pressuring Tehran to accept a US deal. Rumour has it that’s already happening, but China’s malaise isn’t bad enough for Beijing to really lean on Tehran.

US Q1 growth figures disappointed, particularly personal income. The resilience of retail sales therefore means Americans are running down their savings. AI infrastructure investment is raising chip prices – buoying semiconductor stocks – and industrial metals. Iron prices are curiously low, however, reflecting weak construction. That tells us AI companies are stockpiling datacentre components but not actually building them yet.

Construction should start soon, but the delay means weaker growth right now. That should help with inflation at least, reinforcing the helpful drop in bond yields. It reverses the inflation worries from a few weeks ago. We have some gloom, but no doom.

SpaceX: rocket ship to the moon or rapid disassembly?

Elon Musk’s SpaceX is gearing up for the biggest IPO in history – a reported $70bn fundraising target for about 4% of shares, implying a $1.75tn valuation. That would instantly make it one of the world’s most valuable companies, despite its estimated $19bn revenue barely cracking the top 500.

The investor prospectus reads like science fiction – Moon flights, asteroid mining, orbital datacentres and a reward for Musk building a million-strong colony on Mars. SpaceX’s actual business is a little more down to earth. It’s a tech conglomerate covering satellites (Starlink broadband, which generates 60% of SpaceX revenue), AI and rocket launches.

Martin Peers of The Briefing suggests SpaceX should be worth about $700bn if valued like those in its sectors. The remaining $1tn is essentially the ‘Musk factor’ – investors’ belief that Musk’s companies will take humanity’s next giant leap. That’s not to be scoffed at; Tesla shareholders have been consistently rewarded by the Musk factor.

In what feels like a major scoop for Musk, Nasdaq has changed its inclusion rules and weighting methodology in preparation for SpaceX, with a just 15-day fast-track inclusion post-IPO and a new 3x free-float weighting rule for companies with free-floats less than 1/3 of valuation. Passive funds tracking the Nasdaq could therefore be forced to buy more SpaceX shares than are available – squeezing up prices. Active investors can front-run this, but passive investors can’t.

After that initial squeeze, the balance could reverse. SpaceX is just one of several trillion-dollar listings expected this year, including OpenAI and Anthropic. That’s expected to add a record $210bn of fresh US equity supply to the market. More supply than the market can comfortably absorb tends to weigh on prices. We could therefore see a sharp rally at launch followed by considerable volatility. SpaceX might be a rocket ship to the moon; it risks “rapid unscheduled disassembly”.

Commodity nationalism

Guinea’s plans to cap bauxite exports (the ore refined into aluminium) are a problem for China.

Guinea is the world’s largest bauxite exporter, and the vast majority of its ore ships to China. China depends on Guinean ore for a refining industry far larger than its own domestic mining output. The interdependence used to benefit the West African nation but Chinese import prices fell 50% from January 2025 to March 2026, despite surging volumes. The Guinean government now feels like it’s in a one-sided relationship. That’s why Mines and Geology Minister Bouna Sylla declared export controls from June to “raise prices back to reasonable levels”.

This is the latest in a string of interventions from commodity-rich nations. DR Congo has capped cobalt exports, Zimbabwe has banned raw lithium exports, and Indonesia is setting up a state body to control coal and ferroalloy sales. China itself restricted rare earth exports last year. The motivations vary: some nations want to support prices, others want to encourage development and move up the value chain, and China’s rare earth ban was a geopolitical flex against the US. The common thread, though, is producers recognising their pricing power. They saw China’s rare earth ban and Iran’s Strait of Hormuz closure and realised how effective cutting off the tap can be.

Export controls were less effective during the growth of globalisation from the 1990s-2000s. Interchangeable supply chains meant commodity buyers could just switch providers. A decade of deglobalisation and several supply chain shocks have made switching harder. This is a particular problem for China, with its network of bilateral relations (rather than the multilateral market system dominated by the US) that often sour over time as partners feel short-changed.

For the global economy, the implication is straightforward: commodity nationalism adds another layer of inflation risk.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

1^st June 2026

Please see below, an article from EPIC Investment Partners which discusses the health of the consumer credit market in the US. Received today – 29/05/2026

American consumers appear healthier than they feel. Payrolls are still growing, unemployment remains low and household wealth is close to record highs. Equity markets trade as if the economy has absorbed higher rates, sticky inflation and geopolitical shocks with little lasting damage.

The credit data are less comforting. Delinquencies on credit cards and auto loans are rising. Student loan defaults are climbing. Savings have fallen and more households appear to be borrowing simply to maintain spending.

At first glance, the numbers seem contradictory. Household wealth remains high, mortgage delinquencies are low and the banking system appears sound. Yet beneath the aggregate figures lies a growing divide. Auto loan delinquencies have already exceeded their financial-crisis peak. Credit-card delinquencies are moving in the same direction. The stress is concentrated among households with the least financial flexibility. America is not experiencing a balance-sheet recession. It is experiencing a cash-flow squeeze.

Normally, consumer credit weakens after the labour market turns. This time the order may be changing. Defaults are rising while payrolls still look respectable. That is the puzzle investors should care about.

Kevin Warsh’s enthusiasm for artificial intelligence offers one possible explanation. If AI allows companies to raise output while reducing hiring needs, employment data become less reliable. Firms do not need mass redundancies for labour income to weaken. They can hire less, replace fewer departing workers, cut overtime, slow promotions and use software to absorb work once done by junior staff.

None of that produces an immediate jump in unemployment. It does, however, reduce household income growth. Consumers do not experience the economy through GDP releases. They experience it through monthly cash flow. A worker may remain employed while real purchasing power falls. Another may keep a job but lose overtime, promotion prospects or bargaining power. Payroll statistics capture employment. They are less effective at capturing what is happening beneath the surface.

That makes consumer credit a potentially cleaner signal than payrolls. Credit cards and auto loans do not average together asset-rich households and stretched borrowers. They reveal where cash flow is failing. The upper-income consumer is still cushioned by equities, home equity and fixed-rate mortgages. The lower-income consumer is exposed to higher living costs and expensive unsecured debt.

This matters for the Federal Reserve. On the surface, policymakers face a familiar stagflationary problem: inflation remains too high while growth slows. But if Warsh is right, today’s inflation may be masking tomorrow’s disinflation. Energy shocks lift prices temporarily. AI-led productivity gains could lower costs more permanently, particularly if they weaken labour bargaining power and slow wage growth.

The danger is that the Fed spends too long fighting yesterday’s inflation while missing a demand problem already visible in household credit. Positive payrolls would then provide false comfort. Rising delinquencies would be the earlier warning.

This is not another 2008. The mortgage market is healthier, banks are better capitalised and household wealth remains high. But the absence of a banking crisis is not the same as the absence of consumer stress. The optimistic interpretation is that rising delinquencies merely reflect the final effects of an inflation shock. The more troubling possibility is that credit markets are detecting a labour-market transition before official employment statistics can see it.

For most of the past half-century, investors have looked to payrolls for the first sign of economic weakness. If AI is changing the relationship between output and employment, that habit may become expensive. The labour market still looks healthy. Consumer credit is beginning to suggest otherwise. The question for the Fed is which signal arrives first — and which one is telling the truth.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

29^th May 2026

Please see the below article from Brewin Dolphin discussing market optimism driven by AI strength despite ongoing geopolitical and UK economic pressures, received yesterday – 27/05/2026.

Stocks rally on hopes for a U.S.-Iran deal and AI enthusiasm

Global stocks hit new highs this week. Investors were increasingly willing to look past geopolitical volatility, focusing instead on the strength of corporate earnings and the ongoing AI investment cycle.

The Iran-U.S. war continues to dominate the geopolitical backdrop. Oil prices have remained highly reactive to headlines surrounding ceasefire negotiations and the Strait of Hormuz. Oil prices have fluctuated sharply around the $100 per barrel level as markets weigh hopes of eventual de-escalation against the risk of prolonged supply disruption.

While negotiations remain complicated and unpredictable, investors still broadly believe both sides have incentives to avoid a sustained closure of the Strait of Hormuz.

Despite elevated oil prices and persistent geopolitical uncertainty, risk sentiment has remained remarkably constructive. A major reason is the continued strength of the AI ecosystem, which is increasingly driving both earnings growth and market leadership.

Recent semiconductor earnings (e.g. Nvidia’s results last week, which sizeably beat earnings expectations) once again reinforced that demand for AI infrastructure remains exceptionally strong. Companies across the ecosystem continue to report rapid revenue growth, strong pricing power and very high profit margins, supported by relentless spending on data centres and computing capacity.

One of the standout developments this week was semiconductor manufacturer Micron reaching a $1 trillion market capitalisation milestone, highlighting how enthusiasm has broadened beyond just the largest AI chip designers. Memory chips have become one of the clearest beneficiaries of the AI boom, as increasingly sophisticated AI models require enormous amounts of high-bandwidth memory to process and train data efficiently.

Importantly, this is both a demand story and pricing story. Tight supply conditions and surging demand for advanced memory products have driven sharp increases in memory chip prices, leading investors to significantly rerate valuations across parts of the semiconductor sector.

More broadly, markets are becoming increasingly optimistic that the AI investment cycle still has substantial room to run. U.S. hyperscalers continue to commit enormous capital expenditure towards AI infrastructure, reinforcing confidence that this is evolving into a multi-year structural growth theme rather than a short-term technology rally.

For now, that powerful combination of resilient earnings, expanding profit margins and sustained AI spending continues to outweigh concerns around geopolitics and energy volatility.

Markets remain hopeful that tensions in the Middle East will eventually ease and that shipping through the Strait of Hormuz can normalise. In the meantime, AI remains the dominant anchor for investor sentiment.

All eyes are on the UK economy

The UK economy is in focus as it’s at risk from higher energy prices, in turn causing higher interest rates and borrowing costs, while at the same time suffering from a political crisis.

Crucial to this is the outlook for inflation. Last Wednesday’s consumer price index (CPI) release showed headline inflation dropping to 2.8% in April, down from 3.3% in March. Core CPI also moderated to 2.5%, driven largely by downward pressure in housing and household services offsetting a sharp spike in motor fuel costs.

This softer-than-expected reading provides the BoE with some breathing space on interest rates. But it also highlights the cost of the war in the Middle East: without the geopolitical disruption to energy markets, inflation would likely have returned to the 2% target this month.

The reprieve is temporary: the energy price cap is set on a lagging basis and will shift from tailwind to headwind in June, and will be felt in July’s bills. Fortunately, for now there’s little evidence of second-round effects where fuel causes higher wage demands. In fact, the labour market seems weak, a far cry from 2022 when the last energy-driven price spike hit.

Last Tuesday’s Office for National Statistics release was materially worse than expected. Unemployment ticked up to 5%, but the real alarm was the early estimate of payrolled employees for April, showing a drop of 100,000 – far exceeding the roughly 20,000 decline economists had pencilled in, and the largest single-month fall since the start of the pandemic.

Source: LSEG Datastream

However, these data get heavily revised, particularly at this time of year. Each of the last three years have seen similar estimates of lost jobs, which have proven to be false when revised the following month. Nevertheless, the BoE faces a genuinely difficult balancing act and is now expected to defer interest rate increases until July or September.

Friday’s data showed UK government borrowing reached £24.3 billion in April, significantly exceeding the £20.9 billion forecast and applying further pressure to the national deficit.

Retail sales contracted by 1.3%, heavily concentrated in a striking 10% drop in fuel sales – indicating a clear behavioural shift as consumers actively drive less and dip into savings to manage sustained high energy costs. Consumer confidence slipped further into negative territory.

Thursday’s flash purchasing managers indices confirmed the pattern of divergence: U.S. manufacturing surprised to the upside, signalling resilience in the American industrial sector, while Eurozone indices remained largely in contraction territory. The UK services sector moved into deep contraction, though manufacturing held up.

This combination of softening inflation and strained consumer activity caused a slight recalibration in fixed-income markets. As the data suggested the economy is cooling, investors pared back expectations for prolonged elevated rates. In the UK, gilt yields fell marginally toward the end of the week, with the 10-year dipping to 4.9%.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

28^th May 2026

Please see the below article from EPIC Investment Partners detailing their discussions on sustainable investing and the energy sector. Received this morning 27/05/2026.

For years, the prevailing approach to sustainable investing was built around exclusion. Capital flowed away from national oil companies, state utilities and mining groups as ESG mandates favoured lower-carbon sectors such as technology and services. Yet despite the rapid growth of ESG assets, global emissions have continued to rise, prompting a more pragmatic evolution in capital markets: transition finance.

Rather than divesting from carbon-intensive sectors entirely, investors are increasingly focusing on financing measurable improvements in emissions, efficiency and energy infrastructure. The logic is straightforward. Supporting incremental operational change at large scale emitters can often have a far greater real world impact than allocating capital exclusively to businesses that are already low carbon.

This shift is becoming increasingly important within global fixed income markets, particularly across sovereign and quasi-sovereign issuers where access to capital remains critical.

Mexico provides a good example. State-backed issuers such as Petróleos Mexicanos (Pemex) and Comisión Federal de Electricidad (CFE) have historically traded with elevated yields partly reflecting ESG related investor concerns. More recently, however, markets have begun to differentiate between static carbon exposure and credible transition pathways. Sustainability-linked and transition bond structures tied to emissions reductions, operational upgrades and energy investment programmes are increasingly helping broaden the investor base and improve refinancing flexibility.

A similar dynamic is visible in the Gulf. Abu Dhabi National Energy Company (TAQA), for example, continues to operate conventional generation assets, but its substantial investment into renewable energy, transmission infrastructure and water assets has attracted strong institutional demand for its debt. This has contributed to lower funding costs and stronger support across its credit curve.

The mining sector is also seeing a reassessment. Global electrification and renewable infrastructure require significant volumes of copper and other critical minerals, placing issuers such as Chile’s Codelco in a strategically important position. As these companies invest in renewable power usage, fleet electrification and emissions reduction initiatives, they are increasingly attracting long-duration institutional capital that may previously have avoided the sector entirely.

For bond investors, transition finance is creating opportunities to access attractive yields from strategically important issuers while benefiting from improving market technicals and expanding investor participation. In many cases, these credits continue to offer meaningful spread premiums relative to developed market peers despite stronger balance sheets, sovereign backing or improving funding dynamics.

The broader implication is that transition finance is reshaping parts of the emerging market and global credit universe. Rather than treating carbon-intensive issuers solely as assets to avoid, markets are increasingly recognising that many of these entities will be central to the global energy and infrastructure transition itself.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

27/05/2026

Please see the below article from Tatton Investment Management discussing inflation pressures, rising bond yields, and growing AI-driven capital demand, alongside fiscal and China growth concerns, received this morning – 26/05/2026.

Assuming growth will win

Global stocks and bonds have moved higher again after ending last week positively. Non-US markets led the gains and have maintained the outperformance at the start of this week. Bond markets were stronger, helped by falling energy prices following the progress towards peace around Iran and weaker economic data. Nevertheless, a sense of fragility remains. US tech stocks underperformed for the first time since March — despite Nvidia posting an eye-watering 85% revenue jump and one of the largest corporate payouts ever.

The good news was priced in, a pattern Nvidia shareholders are all too familiar with: the chipmaker’s share price usually drifts after earnings before rebuilding momentum ahead of the next announcement, the classic ‘buy the rumour, sell the fact’.

More broadly, tech companies are competing for capital. Big tech companies are increasingly issuing equity to fund the AI investment spree, not just bonds. That’s squeezing the cash once used for buybacks. The most striking example is SpaceX’s upcoming IPO, seeking to raise around $75bn at a valuation of up to $1.75tn — remarkable for a company generating just $19bn in revenue with modest growth.

OpenAI and Anthropic are expected to follow, and analysts estimate that we could see around $210bn of fresh equity added to the market. We haven’t seen such intense capital demand, relative to market size, since the dotcom bubble. Even if you believe these companies’ profit potential, equity issuance makes the balance of buyers and sellers more challenging.

AI’s demand for energy and materials is also boosting inflation. Even new Fed chair Warsh — a firm believer in AI productivity — will have a hard time arguing for lower rates in this environment. Betting markets now suggest a US rate rise is more likely than a cut before year-end.

Inflation has bumped up bond yields (see below), which are weighing on equity valuations. But higher yields are increasingly attractive for long-term investors. Even UK gilt auctions are being met with strong demand, and calmer bond markets are already giving UK equities a lift.

Long-maturity bonds suffer from fiscal risk

Bond investors have had a rough time. The oil shock raised inflation and interest rate expectations, triggering a sell-off in government bonds. Long-term yields were hit hardest, despite the fact that energy prices aren’t expected to remain elevated over the long run.

The ‘term premium’ (the extra return investors demand for lending over the long term) has risen. That doesn’t make much sense from a growth perspective (long-term real yields should reflect growth) or an inflation perspective (high inflation won’t last for 20 years).

One factor is the AI capex spree sapping capital from markets. Another is that the Iran war is a fiscal risk — forcing governments to spend when debt and deficits are already high. That makes bond investors nervous about government finances.

UK gilts have fared worst. Structural issues — a higher share of inflation-linked bonds, skewed long-term issuance, and the Bank of England still selling bonds from its QE stockpile — make gilts uniquely vulnerable. Political uncertainty around a potential Labour leadership change has rattled traders further, though recent gilt auctions suggest bond managers do see value.

High bond yields are attractive for investors. Barring an outright default, buying long-term gilts can lock in strong returns for decades. UK growth is holding up, inflation undershot in April, and the BoE is set to end net bond sales later this year. Unfortunately, most investors expect more volatility first — and may wait for yields to rise further before committing.

Meanwhile, higher bond yields aren’t tempting equity investors. US retail investors remain entrenched in stocks, buoyed by strong tech earnings and price momentum. A meaningful rotation back into bonds will likely need a credible threat to corporate earnings growth — something that’s been conspicuously absent in the US, even amid tariffs, AI disruption, and geopolitical shocks. But even without that rotation, strong returns are available for bond investors.

China stalls again

China’s economy stumbled in April, with retail sales growth slowing to just 0.2% year-on-year – far short of the 2% forecast and the weakest reading since 2022. Industrial production rose 4.1%, but that was well below the 6% expected. Most alarming was fixed asset investment, which fell 1.6% from the start of 2026 to April, against expectations of 1.7% growth.

The National Bureau of Statistics blamed “complex and severe” international conditions, referencing higher oil prices from the US and Israel’s war on Iran. Until now, China’s ample oil reserves and export bans made the economy look surprisingly resilient – but the oil shock is now clearly hitting.

The government must do more to hit growth targets, but investors shouldn’t overreact. China’s growth data follows a well-established seasonal pattern: heavy stimulus at the start of the year, a step-back in the middle quarters, then renewed support heading into year-end. A degree of softness in April is not unusual.

There is a deeper structural concern, however. Beijing’s policy toolkit is built for boosting production and exports, rather than domestic consumption. That’s a key reason the post-property-collapse slump has lasted so long. Consumption measures tend not to last: the consumer goods trade-in subsidy has been scaled back, electric vehicle incentives have expired, and the People’s Bank of China is tightening liquidity.

The export focus is also a diplomatic problem. China’s record $1.19tn trade surplus in 2025 is not only angering Donald Trump; it’s stoking friction with the EU and even ASEAN neighbours.

Tech is the one bright spot, with Chinese chipmaker stocks surging again this week, propelled by Beijing’s investment in chip self-sufficiency. If policymakers can pair that pro-tech drive with a more serious commitment to boosting consumption, they could address both China’s diplomatic tensions and its domestic growth problem.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alexander James Roberts

26/05/2026

Please see below, an article from EPIC Investment Partners which discusses the possibility of a changing landscape in credit markets. Received today – 22/05/2026

For much of the past two years, investors have treated high interest rates as a market problem rather than a balance-sheet problem. Equity multiples adjusted, bond prices fell, mortgage activity slowed and leveraged borrowers complained. But the assumption remained that the system could muddle through. If inflation softened, the Federal Reserve would cut. If growth slowed, long yields would fall. If companies struggled, they would refinance.

That assumption is becoming harder to defend. The US 10-year Treasury yield is back around 4.6 per cent, while the 30-year yield has recently pushed towards 5.2 per cent. The long end is no longer just expressing views on growth and inflation. It is also carrying a fiscal premium. Heavy Treasury supply and a rising federal interest bill are putting a higher floor under the global cost of capital.

That matters because a 5 per cent long bond is not just a problem for Washington. It is the benchmark against which every risky borrower must compete. If the US government pays more to borrow for 30 years, leveraged companies and private equity-backed borrowers must pay more again. That extra cost comes from margins, investment, employment or default.

Housing shows the pressure first. Mortgage rates above 6.5 per cent have preserved the lock-in effect that has frozen turnover. A homeowner with a 3 per cent mortgage does not move casually into a 6.5 per cent mortgage. Fewer sales also mean weaker activity in furniture, appliances, removals, renovation and local services.

Corporate credit is the bigger risk. The zero-rate era allowed companies to borrow cheaply and push maturities into the future. That future has arrived. About $12.4tn of global corporate debt is due to mature between 2025 and 2029, including roughly $3.4tn of speculative-grade debt. The wall is no longer a distant abstraction. It is now running through the rest of the decade, with pressure building into 2027 and 2028.

The issue is not whether every borrower can refinance. It is the price at which refinancing is possible. A company that borrowed at 5 per cent and refinances at 8 or 9 per cent has had its business model repriced. Debt service becomes a tax on operating income. Capital expenditure is delayed, hiring is frozen and cash once used for growth is redirected to keeping the capital structure alive. This is most dangerous in markets built for cheap money. Private equity deals that worked when debt was cheap may still own viable businesses, but the capital structures above them may no longer work. The balance sheet cracks before the payroll data does.

Credit markets still price a gentle outcome. High-yield spreads remain far from recessionary levels. That may prove right if growth holds and the Fed can ease without reigniting inflation. But spreads may also be flattered by modern credit structures. Covenant-lite loans delay intervention, liability management exercises postpone formal defaults and private credit can keep problems away from public markets for a while.

This is where the old developed-versus-emerging market distinction looks crude. The better split is between borrowers that depend on continuous refinancing and those with genuine external strength. A leveraged US company may be more fragile than a sovereign labelled emerging market but supported by strong net foreign assets, commodity revenues or conservative fiscal policy.

The market needs a better category for these issuers: wealthy nations. These are sovereigns with substantial net foreign assets, stronger external balance sheets and the liquidity to withstand a higher cost of capital. The trade is not simply to buy emerging-market sovereigns. That is too broad. The argument is to buy balance sheets that are mislabelled by geography.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alex Kitteringham

22^nd May 2026

Please see the below article from EPIC Investment Partners, their Daily Update, received this afternoon (21/05/2026):

Nvidia keeps delivering results that make the “this time is different” argument feel less like hype and more like a live market reality check. The company reported fiscal first quarter revenue of $ 81.6 billion, up 85% year-over-year and comfortably ahead of guidance, with next quarter revenue forecast at $91 billion, again well above Wall Street expectations. The message is blunt: there is still no visible slowdown in AI infrastructure spending, and demand for Nvidia’s chips remains aggressively strong as hyperscalers, enterprises, and emerging AI cloud providers keep scaling large language models and agentic AI systems at maximum speed.

The real centre of gravity is the data centre business, which surged 92% year over year to $75.2 billion. Within that, hyperscale customers like Microsoft, Amazon, Google, and Meta generated $37.9 billion, up 115% year-over-year, reflecting an ongoing capital expenditure arms race in AI infrastructure. But the more important signal is breadth. The remaining $37.4 billion from enterprise, industrial, and neocloud customers grew 74% year-over-year, showing this is no longer just a Big Tech story. It is spreading into the broader economy, especially among companies that cannot build their own AI chips and are structurally dependent on Nvidia’s stack.

Networking is another key tell. Revenue nearly tripled year over year to roughly $15 billion, showing Nvidia is evolving from a GPU supplier into a full stack AI infrastructure platform spanning compute, networking, and systems integration. That shift matters because it increases control over the entire buildout, not just a single component.

A particularly important data point is Nvidia disclosing that rental pricing for older H100 GPUs rose nearly 20%. This shows that even legacy compute is tightening. When used capacity becomes more expensive, it is not a supply normalisation story, it is a structural shortage story. Demand is not only hitting new chips but also pulling forward demand across the installed base as well.

This directly supports a more aggressive read of the cycle. Rising secondary market pricing challenges the bear case that oversupply will quickly compress returns. Instead, it suggests the opposite dynamic, persistent scarcity across multiple generations of hardware.

Investors will continue to debate how durable this level of growth really is, especially as expectations get more extreme and comparisons get tougher. That debate is valid, because at this scale even small shifts in demand or spending cycles can matter.

But the reality ahead is harder to dismiss. Whatever the eventual endpoint, this has already been one of the most powerful phases of shareholder value creation in stock market history.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Andrew Lloyd

21/05/2026

Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 19/05/2026.

UK markets are under the spotlight

UK markets are under pressure. Guy Foster unpacks the politics, the Strait standoff, and what it means for investors.

Key highlights

• UK political uncertainty: As Sir Keir Starmer holds on to his position as prime minister, the rise of potential challenger Andy Burnham unnerves bond markets.
• Strait standoff: Iran’s oil export halt tightened markets and drove up inflation.
• U.S. inflation: April’s consumer price index (CPI) accelerated, but underlying details suggest less cause for alarm.

UK politics: Leadership uncertainty weighs on gilts

The UK was firmly in the spotlight last week as the prospect of a new prime minister looms. Its most pressing challenges have largely been imported – but domestic political pressure, building quietly for months, is now demanding a response.

Local election results confirmed heavy losses for Labour, with Reform and the Greens the main beneficiaries. By Tuesday, Polymarket odds of Keir Starmer being replaced by the end of June had risen above 60%.

As for his potential challengers, Wes Streeting has resigned from the cabinet, Angela Rayner confirmed she’s been cleared by tax authorities following an investigation, and Andy Burnham has secured a path to a parliamentary seat – via a by-election he’s expected to win. The latter development coincided with a sharp sterling depreciation.

Markets are uneasy about Burnham for identifiable reasons. He’s spoken publicly about moving beyond being “in hock to the bond markets” and has described deregulation, privatisation, austerity and Brexit as “the four horsemen of Britain’s apocalypse.” He’s also signalled ambitions to recapture public control over housing, energy, water, rail and buses.

However one views these positions, reversing them would require substantial spending and carry execution risk – precisely the combination that makes bond investors nervous. Prediction markets give Burnham a 60% chance of success.

Source: Bloomberg

The UK’s first quarter GDP data provided some positive offset, coming in at 0.6% quarter-on-quarter and generally quite strong, with March showing 0.3% growth against expectations of a modest contraction. This suggests UK consumers were able to weather the increase in energy costs during March – probably because UK households raised their savings rates last year to withstand tough economic conditions.

This resilience may reinforce the case for the Bank of England (BoE) to increase rates this year. However, this must be weighed against indications that the housing market is weakening, and survey data suggesting more recent retail sales are likely to be weaker.

The BoE is expected to raise rates at least twice this year, and UK 10-year government gilt yields topped 5.1%, which is higher than 2022 levels. Most of this relates to the prolonged increase in energy costs and impact on inflation, but the political drama is clearly causing some underperformance from UK bonds.

Strait standoff tightens as Trump-Xi talks disappoint

While political drama may be brewing at home, the Iran-U.S. war remained the most important issue across markets last week, with hopes of a diplomatic breakthrough fading as the days progressed. Early last week, the lack of progress in nuclear talks between the U.S. and Iran pushed energy prices higher and weighed on European equities.

By mid-week, satellite imagery confirmed that oil shipments from Khargh Island – Iran’s primary export terminal – had dropped to zero for the longest stretch since the war began, indicating that available floating storage is running out. If Iran exhausts its remaining capacity, it will be forced to cut production outright, which has been a stated aim of the Trump administration’s blockade of the Strait of Hormuz.

Oil prices climbed roughly 8% over three sessions as the physical market tightened. This fed directly into inflation data. The U.S. producer price index (PPI) rose 1.4% month-on-month in April – the largest monthly gain since March 2022 and far above the 0.5% consensus. The annualised figure hit 6%. While the PPI is inherently more volatile than consumer prices, a miss of this magnitude signals that cost pressures are moving through supply chains.

The Japanese PPI told a similar story, marking its fastest year-on-year rise since 2023, driven by oil and naphtha (a liquid hydrocarbon mixture derived from crude oil or other natural sources, which is often used as a fuel, solvent, and petrochemical feedstock) costs – unsurprising for a country that imports 90% of its crude from the Persian Gulf.

The Donald Trump-Xi Jinping summit in Beijing, which had been a source of cautious optimism, delivered little of substance. President Trump asserted the U.S. doesn’t need the Strait of Hormuz open. He did discuss progress on achieving trade deals with China, including vague intentions for China to purchase U.S. oil and agricultural products and a commitment for China to buy U.S. aircrafts.

Where specifics were mentioned, they underwhelmed. The one notable development was the clearing of Chinese tech groups to purchase Nvidia’s H200 chips, which gave a brief lift to NASDAQ futures. Nvidia’s Jensen Huang joining the trip at the last minute now appears to have been the main event.

Against this backdrop, U.S. equities continued their remarkable bifurcation. Tech and AI names drove another strong session on Thursday, with Cisco jumping 20% after hours on an upgraded sales outlook. The broader market, however, struggled with the inflation data – treasuries sold off, with the 10-year yield reaching almost 4.5%, and the 20- and 30-year yields both closing above 5%.

The U.S. Senate’s narrow confirmation of Kevin Warsh as the next Federal Reserve (the Fed) Chair (54-45, almost entirely along party lines) adds another variable. His first meeting in June will be closely watched, though he’s unlikely to have sufficient data clarity to support any rate move in that timeframe. What’s notable is that since the nomination process began, market expectations have shifted from rate cuts to rate increases. If the new chair doesn’t manage to cut interest rates, history suggests he might receive criticism from the president.

Inflation: Punchy but not panic-inducing

The U.S. CPI for April showed headline prices accelerating to 3.8% year-on-year – the highest since the post-COVID-19 spike. Core CPI rose 0.4% month-on-month, the first upside surprise in several months. However, the detail was less alarming than the headline.

The jump in shelter costs was largely a statistical quirk from the government shutdown last autumn, which caused a full year of accumulated rent increases to appear in a single month’s data. Alternative measures of rental inflation, including the Zillow index, continue to decelerate. Core goods inflation showed surprisingly little tariff pass-through, and Bloomberg Economics assessed that the impact from the ‘Liberation Day’ tariffs is now mostly complete.

The areas to watch are food prices – where fertiliser supply disruption through the Strait poses an upside risk – and semiconductor-driven tech inflation, where Samsung has warned of further market tightening next year.

Household inflation expectations have edged up modestly, but not to levels that would alarm the Fed. We expect the new Warsh-led Fed to remain in wait-and-see mode, with neither a bias to hike nor cut.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

20/05/2026

Please see the below article from EPIC Investment Partners detailing their discussions on India and the roll out and impact of AI. Received this morning 19/05/2026.

Today’s news that Standard Chartered plans to eliminate thousands of support roles over the next four years, joining the ranks of global lenders using artificial intelligence to trim headcount, will have sent a further shiver down the backs of the leaders of many Indian IT companies. The bank aims to reduce corporate functions roles by more than 15% by 2030 while scaling up the practical use of AI to streamline processes.

The share prices of Tata Consultancy Services and Infosys have fallen 40% and 30% respectively over the past twelve months. This compares to a broader Indian market decline of 7% and the 40% plus rally in the Asia ex Japan and emerging market asset classes.

The roll out of AI is bad news for the Indian economy. Broadly speaking, the Indian current account balance has been steady at between 0% and -1% of GDP over the past decade. Nothing to worry about with the domestic economy growing rapidly with heavy spending on infrastructure a particular feature.

However, a closer look at the merchandise trade account is warranted. The trade account deficit has increased from 0-1% of GDP in 2020 to minus 3-4% today. The rapid growth in the export of services has been the key feature keeping the overall current account deficit more or less in balance. This is now in doubt. We note the persistent weakness of the Indian rupee over the past twelve months.

Indian equities have been perceived as an ‘anti AI’ trade for a while. This perception is unlikely to change any time soon.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare

19/05/2026