Ellen Ward

The World In A Week - The unloved find some love

Written by Chris Ayton

Global equities, as measured by the MSCI All Country World Index, fell -1.4% last week but remain up +1.4% in 2026 so far. In global fixed income markets, the Bloomberg Global Aggregate Index was flat over the week in GBP Hedged terms, although higher risk credit and high yield bonds continued to outperform.

As Kier Starmer, Rachel Reeves and a group of UK business leaders head off to China this week in an attempt to strengthen economic ties, it was UK domestic data that contained some surprises last week. The UK Composite PMI, a measure of performance of the UK manufacturing and service sectors, came in a bit stronger than expected, following the release of some better-than-expected retail sales numbers for December. Estimates of government borrowing for December also came in lower than forecast, down 7.1% on a year ago, boosted by higher tax receipts. It wasn’t all good news, however, as there were further signs of a cooling in the labour market and the latest inflation data remained stubbornly high, causing further division on how fast UK interest rates will be able to fall in 2026. It was notable that the more domestically focused FTSE 250 Index of medium-sized companies (+0.1%) outperformed the broader FTSE All Share Index (-0.8%) over the week, as it has done so far this year (FTSE 250 Index +3.9% year-to-date vs FTSE All Share Index +2.4%). It remains to be seen whether this will be the start of a resurgence in UK mid-caps that have been so unloved, having lagged their larger-sized counterparts pretty consistently since 2020.

Smaller companies have also been outperforming in the US equity market. Although the broad US market, as measured by the S&P 500 Index, is only up +0.2% in January so far, the smaller-cap focused Russell 2000 Index is up an impressive +6.7% over the same period. Friday actually broke a run of 14 consecutive trading sessions in which the Russell 2000 outperformed the S&P 500 Index. This rotation comes as expectations of further interest rate cuts in the US have grown, and such cuts in borrowing costs tend to disproportionately benefit smaller businesses. After more than five years of smaller company underperformance in the US, as money has flowed endlessly into large tech companies, many of these smaller companies are also meaningfully cheaper than their larger counterparts.

The MSCI Emerging Market Index was down -0.3% over the week, although in a volatile backdrop that made it one of the best performing regional equity markets globally. The MSCI Emerging Market Index has made a strong start to this year, already up +6.0%, as investors seek to diversify their equity holdings into other regions. One market yet to benefit from this dynamic is India, as the MSCI India Index is down over -7% this year, having also fallen last year. It has been reported that foreign investors have already sold US$3bn of Indian equities in 2026, taking their overall selling to over US$34bn since the September 2024 peak. This is the second largest amount of selling by foreigners and the longest period of selling in India's recent history. Although India’s economic growth continues to be strong, investors have seemingly been spooked by higher equity valuations there and the US introducing 50% tariffs on Indian exports, instead rotating into cheaper, previously unloved markets like Korea and Brazil. MSCI Korea is up almost +18% this year having been up +86% in 2025. MSCI Brazil is up approximately +14% this year after having risen +39% in 2025. India is undoubtedly home to some great companies, and this lengthy sell-off could present active managers with some potential new opportunities that have not looked as attractive for quite some time.

Away from equities, precious metals continued their ascent as the Greenland crisis sent some investors looking for safe alternatives to the US Dollar. Gold hit a record high of $5000 a troy ounce, and silver rose above $100 an ounce for the first time. The broad index of commodities, the Bloomberg BCOM Index, was up +5.3% last week and is up +9.2% in 2026 so far, 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 26^th January 2026.

© 2026 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Trump tariff tensions 2.0

Written by Millan Chauhan

Over the weekend, reports emerged that President Trump is prepared to introduce a new tariff regime, starting at 10% and rising to 25% in June on eight European nations (includes France, Germany, the UK, the Netherlands, Denmark, Norway, Sweden and Finland) that oppose his efforts to acquire Greenland. In response, European leaders have since announced plans for potential retaliatory measures, including restricting access for US companies to European markets and considering up to €93bn in tariffs.
President Trump has sought Denmark’s consent to assume control of Greenland, citing its strategic importance to US national security. In addition to substantial natural resources (such as iron and uranium), Greenland’s location and airspace are viewed as critical in the context of US–Russia geopolitical dynamics.

This escalation in tensions has supported the performance of global defence companies, particularly in Europe, with the Stoxx Europe Aerospace & Defence Index rising +14% year-to-date in local currency terms. Notable performers year-to-date include Sweden’s Saab (+26%), Germany’s Rheinmetall (+19%), and the UK’s BAE Systems (+18%).

Global equities, as measured by the MSCI All Country World Index, rose +0.6% last week and remain up +2.9% year-to-date. Interestingly, the MSCI All Country World Index ex-US outperformed global equities last week, rising +1.9%, and has returned +4.6% this year as US equities have lagged their global counterparts. Japanese and Emerging Markets equities (as measured by MSCI Japan and MSCI Emerging Markets) have been standout performers, up +7.2% and +6.3% respectively.

Japanese equities gained +4.5% last week (as measured by the MSCI Japan index), supported by growing optimism around potential additional fiscal stimulus under Prime Minister Sanae Takaichi. Prime Minister Takaichi has called a snap general election in early February, aiming to secure a stronger mandate for the ruling Liberal Democratic Party. Such an outcome could pave the way for more decisive policy action, benefiting sectors including artificial intelligence, nuclear energy, and defence while providing support for consumers too.
The Japanese yen has remained under pressure in recent years due to more accommodative monetary policy relative to other developed markets. Last month’s decision by the Bank of Japan to raise rates from 0.50% to 0.75% was widely anticipated, reflecting concerns that a weaker currency was pushing up import costs and could jeopardise the Bank’s longer-term 2.0% inflation target. We continue to hold an overweight tactical position in Japanese equities, more based upon the ongoing corporate governance reforms in Japan which continue to enhance the focus on shareholder returns.

In the US, inflation held steady at 2.7% in December, in line with expectations. US equities were broadly unchanged last week, with the S&P 500 down -0.1%. Notably, the Russell 1000 Growth index fell -0.9%, while the Russell 1000 Value index rose +0.9%, extending value’s outperformance for a third consecutive week and by nearly 5% year-to-date. Small-cap equities also performed strongly, with the Russell 2000 climbing +2.3% to reach all-time highs, outperforming the S&P 500 by 6.6% so far this year.

Recent market performance underscores the importance of diversification, a theme we have highlighted frequently in previous editions of World in the Week. Investors with diversified portfolios across regions, investment styles, and market capitalisations have been rewarded in 2025 and this trend has continued into 2026. We continue to see compelling opportunities across asset classes and remain confident in the benefits of a well-diversified multi‑asset approach.

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 19^th January 2026.

© 2026 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Markets round off the year on a mixed note

Written by Ashwin Gurung

Global equity markets posted modest gains during the holiday-shortened final week of 2025, with the MSCI All Country World Index rising +0.1%. In contrast, global bond markets declined, as the Bloomberg Global Aggregate Index fell -0.2% in GBP Hedged terms. Despite the week’s mixed performance, both equities and bonds closed out 2025 strongly, delivering total returns of +13.9% in GBP terms and +4.8% in GBP Hedged terms, respectively.

In the US, initial jobless claims eased from recent highs, even as the unemployment rate, released in mid-December, rose to 4.6% in November, the highest level in more than four years. Some economists interpret the continued divergence between these two key labour market measures as a “no hire, no fire” environment, in which employers are retaining existing staff but pausing new hiring while awaiting policy clarity under President Trump and assessing workforce needs amid the rapid adoption of productivity-enhancing Artificial Intelligence (AI) tools. However, last week’s release of initial jobless claims data appears to have been distorted by seasonal adjustments, while the recent unemployment rate was impacted by the record-long federal government shutdown.

Nonetheless, the Federal Reserve (the Fed) will be watching these data closely, as it continues to seek to balance support for growth and the labour market while keeping inflation in check in 2026. Minutes from the Fed’s December meeting highlighted divisions among policymakers following a 25 basis point rate cut earlier in the month. While most officials indicated that further easing could be appropriate if inflation continues to decline, others favoured keeping rates unchanged for some time. The S&P 500 declined -0.2% over the week.

Elsewhere, in the UK, the FTSE 100 Index, made up mostly of companies that earn a large portion of their revenue overseas, briefly rose above 10,000 points on Friday, reaching new highs for the first time. UK manufacturing also showed signs of recovery, with output increasing for the third month in a row and new orders rising for the first time since September 2024. However, the prior week’s data showed that the UK economy expanded by just 0.1% in Q3 2025. Nevertheless, the FTSE 100 returned +0.2%, while the broader FTSE All-Share Index, which better reflects the overall UK market, returned +0.1% over the week.

Emerging markets were the standout performers over the shortened week, with the MSCI Emerging Markets Index returning +1.4%, led by gains in China and Taiwan, which rose +2.2% and +1.4%, respectively. In China, manufacturing activity improved modestly in December, ending a prolonged period of contraction and supporting expectations that the government is likely to support growth cautiously in 2026.

Meanwhile, in Japan, long-term borrowing costs continued to rise, approaching levels not seen since 1999, driven by expectations of further gradual interest rate increases by the Bank of Japan and concerns over already stretched public finances.

As we enter the new year, which will inevitably bring uncertainties and challenges, we remain confident that the best approach for achieving sustainable, long-term, risk-adjusted investment returns is through a multi-asset globally diversified portfolio.

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 5^th January 2026.

© 2026 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Global markets proved there’s life beyond the US

Written by Ilaria Massei

The Federal Reserve (Fed) delivered its final interest rate cut of the year last Wednesday, lowering rates by 25 basis points to a range of 3.5%-3.75%. Fed Chair Jerome Powell said the decision followed an intense debate among the 12 voting members of the Federal Open Market Committee (FOMC). The overriding macroeconomic theme remains the delicate balancing act facing the Fed and other central banks: how to support growth and labour markets while keeping inflation in check.

This conundrum is common to all central banks when making monetary policy decisions - whether to raise, cut, or maintain interest rates. Raising rates is intended to slow economic activity and inflation, while cutting rates aims to stimulate an economy that is slowing excessively, damaging the labour market. The Fed opted to cut rates and Chair Powell made it clear that the decision was driven by an unemployment rate that had “edged up through September”, alongside “downside risks” to the labour market. In addition, the Fed’s latest quarterly economic projections anticipate a sharper decline in inflation next year than previously expected.

Some FOMC members argue that the US economy is no longer creating jobs at a sufficient pace, while others believe persistent inflationary pressures in the services sector - which dominates US economic output - leave the Fed with limited room to reduce borrowing costs further. Ultimately, 9 of the 12 rate-setters supported the cut, with 2 members favouring holding rates steady, and one calling for a larger, half-point cut.

The latest unemployment data were released in November for September, following the US government shutdown, and showed an increase in the unemployment rate to 4.4% - the highest level since October 2021. October’s data will not be released due to data unavailability during the shutdown, meaning the Fed made its decision amid incomplete labour market information, with additional data due to be published tomorrow, 16^thDecember.

Another setback last week came from Oracle’s earnings release. The company reported weaker-than-expected revenues on Wednesday and announced a further $15bn increase in planned data-centre investment this year to support artificial intelligence clients. The stock has since given back most of its recent gains, as investors grew concerned about the scale of borrowing and capital spending required to build infrastructure for OpenAI, Oracle’s client and ChatGPT’s creator, as well as questions around the start-up’s ability to meet these contractual commitments over the longer term. Given Oracle’s role within the broader AI ecosystem, the results weighed on sentiment across the sector, contributing to a -2.0% decline in the Nasdaq-100 last week, the index of the largest US technology stocks.

While uncertainty clouds the US outlook for 2026, it is worth remembering that 2025 demonstrated how strong returns can also be generated elsewhere. Overall, it was a positive year for both fixed income and a range of equity markets. Despite a turbulent start to the year driven by US tariff threats, equities across Europe, the UK, Japan, and China are set to close the year with double-digit returns, both in local currencies and for GBP-based investors.

While it is difficult to predict future economic outcomes, 2025 exemplified that a diversified investment approach across regions and asset classes is an effective way to navigate 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 15^th December 2025.

© 2025 YOU Asset Management. All rights reserved.

by Ellen Ward

The World In A Week - Easterly winds

Written by Cormac Nevin

In recent weeks, two major Asian economies, Japan and China, have been quietly making the economic and market weather for the rest of the world.

Japan’s government bond market has been at the centre of attention. For years, Japanese interest rates were kept extremely low, with the central bank buying huge amounts of government bonds to stabilise the system. Recently, markets have begun to test whether this long-standing policy can continue. Yields on Japanese government bonds have moved more sharply than usual as investors anticipate that the Bank of Japan may eventually allow rates to rise. This shift matters globally: Japan is one of the world’s largest sources of overseas capital. Higher domestic interest rates on offer can draw money back home, meaning interest rates also rise in other parts of the world and currencies re-adjust, adding volatility to international markets.

China, meanwhile, has been steering global conditions through its balance of trade. New data this morning confirmed that China has exported over $1 trillion more in goods than it imported over the first eleven months of the year. On the surface, that looks like economic strength, but it also tells a story of weak domestic demand. Chinese consumers and businesses remain cautious. Notably, exports to the US have softened, but shipments to Europe, Asia, and emerging markets have risen sharply. This dynamic adds to global supply, helping ease price pressures, but dampens growth for countries reliant on Chinese demand. Unsurprisingly, France’s President Emmanuel Macron has floated the possibility of EU tariffs in response.

China’s Politburo - the top decision-making body of the Chinese Communist Party, made up of senior leaders - has pronounced that stimulating domestic demand, rather than export-oriented growth, is their top priority for 2026. Actions speak louder than words, however. China has been trying to boost domestic demand for some time, but the fundamental reality of the coming century is that China’s working-age population is currently falling and will collapse at an accelerating rate to be down by -25% from the present level come 2050. A structural deficiency of global aggregate demand has the potential to be the ongoing story of the coming decades.

In this environment, a globally diversified portfolio remains the most effective way to capture opportunities. Emerging market bonds and equities may benefit from lower inflation and a softer US dollar; likewise, certain Japanese equities could gain from higher interest rates and a stronger yen. Exposure to assets that thrive under different economic regimes is, in our view, increasingly important as the decades ahead may differ markedly from those recently behind us.

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 8^th December 2025.

© 2025 YOU Asset Management. All rights reserved.

by 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