Ellen Ward

The World In A Week - Some clarity in uncertainty, at least in the short term

Written by Ashwin Gurung

Last week, the UK Government announced the much-anticipated Budget, setting out how it plans to raise money and manage public spending over the coming years, while aiming to rebuild confidence after a period of weaker economic growth. The Budget delivered no major surprises and included around £26 billion in additional tax revenue, addressing earlier concerns about a potential ‘black hole’ in the UK public finances. This allowed the Office for Budget Responsibility (OBR) to estimate that the government has around £22 billion of “fiscal headroom” – the margin by which its plans remain within its fiscal rules, providing a buffer for extra spending or tax cuts without breaching its commitment to budget stability.

The OBR expects the UK economy to grow by 1.5% in 2025, before slowing to 1.4% in 2026, signalling a somewhat weaker outlook. Inflation is expected to remain above earlier forecasts, 3.5% in 2025, before easing to 2.5% in 2026, meaning the cost of everyday goods and services is likely to remain relatively high in the near term.

While the economic outlook was somewhat soft, it largely came as expected. With no major surprises in the UK Budget, it helped somewhat ease near-term uncertainty over public finances, resulting in a calm UK bond market. This contrasts with September 2022, when Chancellor Kwarteng’s mini-Budget triggered a sharp market sell-off due to unfunded tax cuts and fears of reckless spending. UK government bonds have attracted significant investor interest recently. That said, we still view UK government bonds as relatively less attractive compared with global bonds or local-currency emerging market bonds, given the unique challenges the country faces and the fact that the potential returns don’t clearly compensate for the risks and liquidity constraints.

Meanwhile, UK equities reacted somewhat more positively, as some sectors, such as banks, benefited as the Chancellor decided against imposing additional levies on their profits, which partly drove the FTSE All-Share Index up +2.2% over the week, with Financials representing 28%. The FTSE 250 Index, which is more closely tied to the UK economy, also rose +3.8% over the week.

In the US, markets were lifted by growing confidence that the Federal Reserve (“The Fed”) may cut interest rates in December. The odds of a cut have jumped sharply in recent weeks, with markets now pricing in an 88% probability, while the Fed continues to weigh the trade-off between supporting the labour market and keeping inflation in check. Smaller, US-focused companies did particularly well, with the Russell 2000 Index up +4.2%, while longer-dated Treasury bonds also gained, as the Bloomberg US Treasury 20+ Years USD Index rose +0.8% in USD terms. Meanwhile, tech giants held their ground, with the Nasdaq-100 Index returning +3.6%, despite ongoing talk about a potential AI “bubble”.

Elsewhere, Japanese markets were supported by stronger-than-expected retail sales and industrial production, with the MSCI Japan Index rising +1.4%. During the week, the Japanese government also finalised a $117 billion supplementary budget, mostly financed through new debt, which added further pressure on the yen given Japan’s already stretched public finances. Persistent yen weakness and above-target inflation have raised expectations of a possible Bank of Japan interest rate hike in December.

This year’s broad mix of evolving market themes continues to highlight the importance of a diversified and disciplined investment approach as the most effective way to navigate ongoing uncertainty.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 1^st December 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Stale data is not the dish the Federal Reserve wanted served

Written by Shane Balkham

The past few weeks have seen the media vultures circling over the AI-driven technology stocks, as investors took profits and global equities remained under pressure, waiting for the bellwether results from Nvidia. Nvidia’s results were strong, with the near-term outlook for its chips remaining robust, however, that is where the weakness lies. In order to sustain the current valuation, Nvidia needs the requirement for its products to remain high, as any sign of cooling demand could have investors questioning its dominance.

Nvidia’s shares initially rallied on the results, as did global equities, but slid backwards over the rest of the week. Global equities are down for the month of November, as the uncertainty of the impact of the US government’s closure and the sustainability of the AI-driven market weighed heavily on investors.

We wrote about the reopening of the US government in last week’s publication, and that means we are now seeing economic data being published. The problem is as the US government was shut for over six weeks, the data being published is stale. The September jobs report showed that although 119,000 jobs were added, much greater than the consensus expectation of 53,000 jobs, unemployment reached its highest level for four years. To add to the gloom, the prior two months’ results were revised downwards by 33,000. This will complicate the Federal Reserve’s decision on whether to cut interest rates next month. Making matters worse for the members of the Federal Open Market Committee (FOMC), the US Bureau of Labor Statistics (BLS) confirmed that it will be cancelling both its October consumer price index (CPI) report and October employment report. This was mainly due to being unable to retrospectively gather and obtain some data that was not collected during the government shutdown. The next inflation and jobs report, for November, will be issued on 18^th December, after the FOMC meeting.

The odds of a rate cut by the Federal Reserve have dropped significantly, despite President Trump’s very public rebuking of both Jerome Powell (Chairman of the Federal Reserve) and Scott Bessent (Secretary of the Treasury) for not delivering on lower interest rates. If the decisions by the Federal Reserve are heavily based on data, and that data is either stale or not available until after their next meeting, it seems unlikely the committee with have enough confidence in the state of the US economy to deliver the presidentially desired rate cut.

Last week was not all about the US. In the UK, we had our latest and freshest data release for inflation in the UK. The Consumer Prices Index (CPI) rose by 3.6% in the 12 months to October 2025, down from 3.8% in September. Inflation had been static over the third quarter at 3.8%, which matched the forecasts from the Bank of England, which, in its latest report, had judged inflation to have peaked. The largest contributor to driving inflation down was gas and electricity prices, which rose by less than this time last year. Food prices are still the primary component of pushing inflation up.

So, this slight drop tallies with the expectations of the Bank of England, which is also seeing an easing of growth in the UK and some weakening in the labour market. Although the direction of travel is improving, the wider economic backdrop does remain fragile. Evidence of reducing inflation is welcome, however, subdued economic growth and a fading labour market does leave the UK at risk.

However, the UK stock market has been resilient, with the FTSE All Share delivering strong double-digit returns year to date. The spread of returns across regional equities has been a significant factor this year, the opposite of last year, which saw US equities as the dominant asset class.

Being appropriately diversified over the long term continues to deliver strong outcomes for our clients, particularly during periods of market stress, where keeping your head and staying invested is the right course of action.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 24^th November 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - US government reopens but volatility rises as tech weakens

Written by Dominic Williams

Global equity markets ended the week on a subdued note, with the MSCI All Country World Index edging up +0.5%, as investors rotated out of AI-driven tech stocks, triggering sector-specific selling. Volatility was amplified by the US government’s reopening after its record 43-day shutdown. Mixed economic data across regions curbed enthusiasm and prompted investors to dial back exposure to technology and other fast-growing companies, which have seen strong gains.

In the UK, the economic outlook remained lacklustre ahead of Chancellor Rachel Reeves' Autumn Budget on 26 November. Revised official figures confirmed Q3 GDP growth of only +0.1% quarter-on-quarter, coming in below the +0.2% consensus forecast. This followed flat output in August and a contraction in September, in part due to disruptions like the cyber-attack on Jaguar Land Rover that curtailed vehicle production. The unemployment rate climbed more than anticipated to 5% over the three months to September, the highest level in four years. Payroll numbers fell, and wage growth moderated to 4.6%. This evidence of labour market softening has heightened the probability of a Bank of England rate cut in December. The shrinking workforce also signals weaker tax revenues, intensifying the budget's challenges and the risk of tighter spending to avoid market backlash. However, the Office for Budget Responsibility (OBR) has marginally upgraded its forecasts for the UK economy, giving the Chancellor a little more room to manoeuvre. These improved projections mean the government may have slightly higher tax revenues, which could help soften the impact of difficult budget decisions. UK equities held steady in this environment, with the FTSE All Share Index ticking up +0.3% and the more domestically oriented FTSE 250 matching that gain at +0.3%.

Japan stood out for its resilience, with the MSCI Japan advancing +1.1% amid broader global jitters. While AI concerns weighed on the Japanese tech sector, policy expectations under the new Prime Minister Sanae Takaichi provided a boost. She is expected to pursue pro-growth policies and favour a more cautious approach to raising interest rates by the Bank of Japan. Europe also delivered a strong performance, with the MSCI Europe ex-UK index rising by +2.9% over the week.

In the US, the 43-day government shutdown ended mid-week with House approval of funding through January, averting deeper disruption but revealing the backlog of delayed data, such as the much-anticipated September jobs report, which will be released on 20^th November. Initial relief faded, and volatility increased as investors awaited the release of backlogged economic data and started to question the sustainability of the AI boom. Major tech names were hit hard, including Nvidia, which ended the week down -4.5% as investors grew concerned about valuations and what level of return companies will earn on the staggeringly large investments in AI. The S&P 500 ended the week up +0.2% but the tech-heavy Nasdaq 100 index fell -0.1% over the week, reflecting concerns on AI tech-stocks names.

Overall, the week laid bare vulnerabilities in tech dominance and the uneven path of policy normalisation, even as monetary tailwinds offered some offset. In this fluid setting, a diversified and disciplined investment approach remains the preferred approach to mitigating risks and capturing opportunities.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 17th November 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Diversifying your basket

Written by Millan Chauhan

The Bank of England’s Monetary Policy Committee voted narrowly to maintain interest rates at 4%, with five members favouring a hold and four advocating for a cut. Governor Andrew Bailey signalled a commitment to lowering interest rates gradually, noting that inflation appears to have peaked. This has increased expectations for a potential rate reduction at the Committee’s final meeting of the year in December.

Last week, US equity markets experienced declines, with the S&P 500 decreasing by 1.7%, largely due to weakness in technology stocks. The Nasdaq-100, which is heavily weighted toward technology firms, fell by 3.2%. The sell-off was driven by worries about high valuations in these technology companies and a decline in consumer confidence during October. Investment into Artificial Intelligence (AI) has remained strong with major technology companies, including Alphabet, Amazon, Meta, and Google, collectively reporting $112 billion in capital expenditures for the third quarter. These investments are primarily directed toward Graphics Processing Unit (GPU) acquisitions and infrastructure enhancements, which are intended to drive AI integration and improve productivity and efficiency. This sustained commitment has played a significant role in driving up the valuations and prices of these technology companies. This capital expenditure has also positively impacted infrastructure assets, especially electric utilities, which play a crucial role in meeting the rising energy requirements associated with AI hardware.

Historically, infrastructure assets have provided strong diversification benefits compared to global equities, often acting defensively during stock market downturns, while also offering effective inflation protection and an attractive dividend yield. For instance, last week the Nasdaq-100 dropped by 3.2%, but infrastructure assets, as measured by the S&P Global Infrastructure GBP Hedged Index, rose by 0.9%. This clearly demonstrates how portfolio diversification plays a crucial role in achieving positive outcomes.

The United States federal government has now been shut down for 38 days, constituting the longest closure in history. This situation has limited access to official government data and increased reliance on alternative reports from the private sector. For instance, last Wednesday’s ADP employment report indicated that private employers added 42,000 jobs over the past month, representing an improvement after two consecutive months of job losses. However, a separate report released last Thursday by Challenger, Gray & Christmas stated that US employers have announced nearly 1.1 million job cuts year-to-date through October, a 65% increase compared to the same period last year and a 44% rise over the total number of cuts in 2024. In October alone, 153,074 job cuts were reported, marking the highest figure for that month since 2003. These developments present considerable challenges for the Federal Reserve as it assesses the state of the labour market and the broader economy in advance of their final meeting of the year in December. In light of the conflicting economic indicators, markets are assessing whether the Federal Reserve will implement a rate cut next month or maintain current rates amid the continued uncertainty.

Although global markets experienced a downturn last week, we would like to emphasise the advantages of remaining invested, as attempting to time the markets is often extremely challenging.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon. 

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products. 

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments. 

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 10^th November 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Keep your allies near and your rivals closer

[Image source: White House Gallery]

Written by Ilaria Massei

The event that received the most attention last week was the deal between Donald Trump, President of the United States of America, and Xi Jinping, President of China. They met at the Asia‑Pacific Economic Cooperation Summit 2025 in South Korea and reached a one-year trade deal, with China agreeing to postpone export controls on rare earths (metallic elements essential in smartphones, laptops, electric vehicles and defence equipment) and semiconductors and the US to ease tariffs on shipping and fentanyl-related goods (chemicals, ingredients, and equipment used to make or distribute fentanyl), to improve cooperation with China in controlling the illegal production and flow of fentanyl. Both leaders emphasised a shared vision of “prospering together” in their first such meeting in years. While investors viewed the agreement as potentially temporary, it was warmly welcomed by markets eager for stability - freeing global equity markets to move higher with the MSCI All Country World Index up + 1.7% over the week.

While equity markets were buoyant, bond markets were more cautious as the Federal Reserve (Fed) delivered an expected 25-basis-point rate cut but Fed Chair, Jerome Powell, tempered expectations, stating that another cut in December is “not a foregone conclusion.” The news was not well received by the US Treasuries market with long-dated Treasuries (as represented by the Bloomberg US Treasury 20+ Years) declining -1.2% in USD on worries that there might not be enough rate cuts in the future to support the economy.

While tariffs and monetary policy dominated US headlines, this week’s earnings announcements provide important context for assessing the health of corporate activity. European banks continued to perform well - with Crédit Agricole & Santander among the standouts - while UK Banks like NatWest reported their highest quarterly profits since 2008. In contrast, US technology firms faced a volatile week as investors struggled to reconcile enthusiasm for AI with concerns about excessive spending. None of Google (Alphabet), Meta, or Microsoft are willing to stop spending on AI yet and together have spent nearly $80 billion last quarter on AI infrastructure. While Alphabet’s shares rose on record revenues and increased capital spending plans for 2025, Meta and Microsoft declined as profits have come under pressure due to increasing costs on AI-related expenses. Hyperscalers - such as Microsoft, Google, and Meta - are the largest cloud and technology companies investing heavily in building and expanding AI infrastructure. Nvidia, on the other hand, is a key supplier to these players, providing the advanced graphics processing units (GPUs) and hardware needed to power AI applications. While hyperscalers are seeing pressure on profits due to their massive capital spending, Nvidia continues to benefit as long as this investment cycle in AI infrastructure remains strong - at least for now.

During weeks characterised by high news flow and market volatility, we think that adopting a global investment perspective is essential. It enables the identification and capture of opportunities across diverse markets, rather than restricting exposure to a single region.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon. 

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products. 

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments. 

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 3^rd November 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - UK equities shine and the “Takaichi-trade”

Written by Chris Ayton

The MSCI All Country World Index of global equities ended the week up +2.5% and is now up +13.5% this year. In global fixed income markets, the Bloomberg Global Aggregate Index was up +0.1% over the week in GBP Hedged terms and is now up +5.0% in 2025 so far.

The UK equity market enjoyed a strong week, rising +3.2% and is now up a very healthy +20.3% year-to-date.  UK economic data releases over the week were generally positive, notably September’s annual inflation reading that came in at 3.8% which was below most expectations and, in some minds, increased the chances that the Bank of England could cut interest rates again before year-end. UK retail sales, a measure of consumer spending, also rose unexpectedly driven by demand for computers and telecommunications and online jewellers reporting strong demand for gold.

Japanese equities also enjoyed a boost from Sanae Takaichi being confirmed as Japan’s first female Prime Minister. It is generally regarded that Takaichi, who wants to be Japan’s “Iron Lady”, will be positive for the Japanese equity market and will be pushing for some additional stimulus to boost defence spending and also help support households feeling the impact of inflation. MSCI Japan was up +2.2% over the week taking the index to +15.4% for the year so far. Commentators are already collectively calling this the “Takaichi-trade” although, even with the new coalition with the Japan Innovation Party in place, it remains to be seen how much of the new spending plans and potential tax cuts she will manage to get through parliament.

After a stellar run, the shine came off gold last week, breaking a nine-week winning streak as trade tensions between the U.S. and China seemingly cooled, easing safe-haven demand. However, the oil price jumped as the US announced sanctions on Russia’s two largest oil companies, Lukoil and Rosneft, which will also likely result in other large importers like China and India curbing their purchases of Russian oil, switching their demand elsewhere. Such politically driven volatility underlines how hard it is to predict short-term commodity prices and this is why in the lower risk YOU funds and portfolios, instead of betting on single commodities, we maintain a broadly diversified exposure to commodities. The wider Bloomberg Commodity Index, which allocates across 24 different commodities, rose +1.7% over the week and is up +12.5% year-to-date, both in GBP hedged terms.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon. 

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products. 

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments. 

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 27^th October 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - There’s never just one cockroach…

Written by Cormac Nevin

The title of this piece refers to an old saying in financial markets, often attributed to Warren Buffett, but employed last week by the CEO of JPMorgan Chase when discussing a string of corporate bankruptcies that rattled credit markets.

The bankruptcies that Jamie Dimon said had “got his antenna up” included First Brands Group - a U.S. auto-parts maker that filed for bankruptcy protection in late September; Tricolor Holdings - a U.S. sub-prime auto-lender and dealership group that entered liquidation in September; and Zions Bancorporation - a U.S. regional bank that announced a US$50 million loan write-off tied to two borrowers who, it said, misrepresented information and pledged collateral improperly.

The problem is simple enough: money has become expensive again. Central banks have been trying to keep policy “restrictive” to ensure inflation stays buried, but that means companies rolling over debt issued during the zero-rate years are now facing vastly higher costs. A business that borrowed at 3% in 2021 might now be staring at 8% or more. That’s manageable if revenues are growing - but many firms are seeing demand soften as consumers tighten their belts and government support fades.

For now, equity markets remain remarkably calm, with the MSCI All Country World Index up +0.5% last week. However, at the margin, these developments make us cautious about the lower-quality end of credit markets. The explosive growth of private credit and private equity activity in these areas has made them substantially more opaque, and the lack of frequent market-based pricing means risks can accumulate before they become widely apparent.

We remain biased towards high-quality sovereign fixed-income assets at this juncture and only employ highly specialised active managers for the modest amount of credit exposure we currently bear.

All performance figures are stated in Sterling terms, unless otherwise specified.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon. 

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products. 

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments. 

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 20^th October 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward