The World In A Week - New year, new gains despite geopolitical headlines
Written by Ashwin Gurung
The first week of 2026 has already brought major geopolitical headlines, including U.S. forces capturing Venezuelan President Nicolás Maduro and his wife, Cilia Flores, on drug trafficking charges, and President Trump asserting U.S. influence over Venezuela’s vast oil reserves.
Venezuela is often reported to hold about a fifth of the world’s known oil reserves, one of the largest anywhere. However, these estimates are widely questioned, and the actual economically recoverable oil is likely much lower. Nonetheless, the U.S. has announced plans to help rebuild Venezuela’s oil sector, given that the country currently produces less than 1 million barrels of oil per day, which is less than 1% of the total global supply due to various challenges. However, meaningful increases in production will require substantial investment, time, and clear policy support. With oil prices near multiyear lows and supply already exceeding demand, any additional output could add further pressure to prices. Additionally, long-term demand for traditional oil may be limited, as the growing adoption of electric vehicles reduces reliance on conventional fuels. [AG1.1]
Despite significant geopolitical headlines, the first full trading week of 2026 saw a rally in global equities, bonds, as well as commodities. Global equity markets, as measured by the MSCI All Country World Index, rose +2.1%, global bonds, as measured by the Bloomberg Global Aggregate Index, returned +0.4% in GBP‑hedged terms, and similarly, commodities, as measured by the BCOM Index, returned +2.5% in GBP‑hedged terms. [AG2.1]In the US, the S&P 500 climbed +2.2%, and smaller, domestically focused companies, as measured by the Russell 2000 Index, surged +5.3%.
The US non-farm payrolls, which tracks the number of jobs added or lost each month across most sectors of the economy in the U.S. (excluding farm workers, government employees, and a few other categories)[AG3.1], report surprised on the downside, with employers adding just 50,000 jobs in December, though the unemployment rate fell to 4.4% from a revised 4.5% the prior month. President Trump’s proposal to increase US military spending by more than 50% to $1.5 trillion a year also supported defence stocks.
In Europe, inflation slowed to 2% in December, in line with the European Central Bank’s target and market expectations, while the economy showed signs of picking up at the end of 2025. Industrial output in Germany, France, and Spain surpassed forecasts in November, helping the MSCI Europe Ex-UK index gain +2.0% over the week. Meanwhile, in the UK, the housing market continued to soften, with mortgage approvals for home purchases dropping to 64,530 in November from 65,010 in October, according to Bank of England data. Nonetheless, the broader UK market performed well, with the FTSE All Share rising +1.9%.
Elsewhere, Japanese equities performed strongly, with the MSCI Japan rising +2.9% over the week, despite ongoing geopolitical and trade tensions with China. However, concerns over Japan’s already stretched public finances have pushed long-term borrowing costs higher and continued to weigh on the yen. In contrast, Chinese equities saw a modest weekly gain of +0.9%.
While markets will continue to face geopolitical uncertainty, 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 12th January 2026.
© 2026 YOU Asset Management. All rights reserved.
Two Minute Missive - 22nd October
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your financial planner before undertaking any investments.
Two Minute Missive - 23rd September
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your financial planner before undertaking any investments.
The World In A Week - The artificial intelligence race across the world
Written by Millan Chauhan
Last week, the Federal Reserve implemented a 0.25% interest rate cut, marking its first move in nine months. This decision was a response to mounting evidence of a slowing labour market in the US. Chair Jerome Powell acknowledged that the balance of risks has shifted toward employment concerns and away from inflation, which has remained persistently above the Federal Reserve’s 2.0% target. The central bank also signalled expectations for two additional 0.25% rate cuts before the end of the year. This boosted equity markets, with the S&P 500 up +1.8% last week. Global equities, as measured by the MSCI All Country World Index, also rallied +1.6% for the week, with the US representing roughly 65% of that index, being a key driver.
The resumption of rate cuts has particularly benefited US small-cap companies, which have outperformed their large-cap counterparts in recent months. Anticipation of further interest rate cuts into 2025 and 2026 has propelled the small and mid-cap biased Russell 2000 index to a +14.7% gain for the quarter so far, including a +2.8% return last week. As a reminder, the YOU Multi-Asset Blends Fund and Active Model Portfolios have an exposure to an actively managed Fund managed by Neuberger Berman, which has effectively captured this small-cap outperformance.
In Asia, China’s internet regulator announced an immediate ban on major technology firms purchasing US chip maker Nvidia’s AI chips, reflecting ongoing US-China tensions. China continues to reduce reliance on Nvidia and has accelerated its domestic chip development. There is a growing consensus that Chinese manufacturers can now match the performance of Nvidia’s China-specific RTX Pro 6000D chip. This development marks another chapter in the ongoing US-China rivalry, with the current focus squarely on AI leadership. Chinese equities extended their strong recent performance, with the MSCI China index up +1.5% last week, contributing to a +1.8% gain for the MSCI Emerging Markets index.
As the race for AI dominance intensifies, Nvidia announced a $5 billion stake in Intel, with the intent to diversify its chips production reliance away from Taiwan Semiconductor Manufacturing Company (TSMC). Intel, which has faced competitive challenges, is also set to receive a 10% equity investment from the US federal government to help reinforce their leadership in semiconductors and technology.
Diversification remains a cornerstone of our investment philosophy. We are committed to maintaining broad exposure across and within asset classes, ensuring portfolios are not overly concentrated in any single theme or region. While technology has been a prominent driver of recent performance, our portfolios are constructed to benefit from a range of investment styles and factors, supporting robust overall returns.
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 22nd September 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - All models are wrong, but some are useful
Written by Cormac Nevin
Equity markets had a relatively quiet week, with the MSCI All Country World Index up +0.4%. Fixed Income markets rallied strongly, however, after Friday’s release of the US non-farm payrolls (NFP) report showed that, according to the Bureau of Labor Statistics (BLS), the US economy added only +22,000 jobs in the month of August (vs +75,000 anticipated).
This caused a sharp rally in Fixed Income markets as government bond yields moved lower. The Bloomberg Global Aggregate Index of global bonds finished the week up +0.5% while the ETF tracking long-dated US government bonds (which is very sensitive to interest rates) was up +2.6%, both in GBP Hedged terms.
Strong initial NFP reports in recent years have created a narrative that the US jobs market has been in surprisingly good health following the interest rate increases in 2022, which many feared might cause a recession. However, revisions to the initial prints for May and June of this year showed the largest two-month downward revision since 1968, as 258,000 jobs which were never actually created were revised away.
While Donald Trump et al have used the existence of these regular revisions as evidence of conspiracy against him at the Bureau of Labor Statistics (causing him to fire the Commissioner in August and replace them with his preferred candidate), the reason for these revisions is more nuanced. They are necessary due the fact that the initial NFP print is a survey-based measurement which is then extrapolated to the economy as a whole.
This can be skewed by low response rates, seasonal factors and late responses among other factors. Another interesting adjustment made to the numbers is drawing increasing market attention. This is called the “birth-death adjustment” which is a statistical adjustment used by the BLS to estimate how many jobs come from new businesses starting up (“births”) and how many disappear because old businesses close down (“deaths”).
The challenge with using mathematical models too extensively, or taking their estimates too literally, is that the world often evolves in ways they struggle to adapt to. This specific adjustment struggles at economic turning points; it may assume lots of new businesses are popping up when in fact many are closing, which can make job growth look stronger than it really is until revisions catch up. The rise of “businesses” created by sole traders operating in the gig economy (eg Uber), which are never going to employ more than one person, is also a challenge for this model.
On Tuesday of this week, the Quarterly Census of Employment and Wages is released for Q1 2025 with a six month lag. This is based on actual unemployment insurance records from nearly every business in America, so it’s much closer to the “truth”. This is expected to further revise the NFP numbers by 500-800,000 as jobs which only ever existed on a spreadsheet at the BLS are revised away. The cloudiness of economic data at the moment, borne out of overreliance on statistics rather than conspiracy, is a strong reason why we maintain healthy allocations to high quality Fixed Income exposures with interest rate sensitivity, as well as globally diverse exposures which likely stand to benefit from a weaker US Dollar.
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 8th September 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Deals in a Delicate Environment
Written by Dominic Williams
Global equity markets posted gains last week, as investors digested a slew of macroeconomic data and geopolitical developments. The standout driver came from the US, where reciprocal tariff reductions were agreed between Washington and Beijing, marking a significant de-escalation in trade tensions.
However, the agreement is only in place for the next 90 days, and a long-term settlement is still far from guaranteed. Tariffs are import taxes that can raise costs for businesses and consumers, so their removal typically supports trade and market sentiment. The move fuelled optimism around global trade and was widely welcomed by markets, with major indices responding positively. President Trump also took a diplomatic tour to the Middle East, where he secured new trade agreements in the region.
In response, the S&P 500, a widely followed index that measures the performance of 500 leading US-listed companies, rallied sharply, rising +5.7% in GBP terms. This reversed recent losses and brought the index back into positive territory for the year in local (US dollar) terms.
US inflation data released during the week added to the positive sentiment. Headline Consumer Price Index (CPI) inflation came in at 2.3% year-on-year for April, below expectations, offering hope that inflationary pressures are easing. CPI measures the average price change paid by consumers for goods and services and is closely watched by policymakers and markets alike. However, producer price data presented a more mixed picture.
These figures reflect the costs businesses incur to produce goods and services, often called input prices. While input prices fell more than expected, this was partly due to tariff-related pressures and weak demand. Falling input costs can sometimes be positive, but in this case, they may signal that companies are cutting prices to maintain sales, or that global demand is weakening, both of which raise concerns over a potential squeeze on company profit margins.
If businesses earn less per unit sold, it could weigh on corporate profitability in the coming quarters, complicating the outlook for how the Federal Reserve may approach interest rates going forward.
While the immediate market reaction was positive, the full impact of recently proposed tariffs is yet to be felt, and policymakers have cautioned that inflation could rise again later in the year.
In the UK, GDP grew 0.2% in March, bringing first-quarter growth to 0.7%. While this was ahead of expectations, underlying indicators were less encouraging. Both industrial and manufacturing production came in below consensus, raising questions about the sustainability of the recovery in the face of continued weakness in consumer demand and elevated interest rates. UK equities saw a mixed response, with the more domestically focused FTSE 250 rising +2.4%, while the broader FTSE All Share rose +1.8% over the week.
In Japan, GDP fell by 0.2% in the first quarter of 2025, reflecting weaker than expected demand from major trading partners, compounded by concerns over the impact of US trade policies. Despite the contraction, sentiment held up relatively well over the week, supported by the broader rebound in global markets and optimism following the US-China trade deal. Market performance was muted, with the MSCI Japan Index rising +0.2% in local currency terms but declining -0.2% in GBP terms.
Despite the week’s optimism, challenges remain. The looming impact of new trade tariffs, ongoing questions around the sustainability of global growth, and mixed corporate earnings all point to a still-uncertain outlook. However, the strong market rebound, particularly in the US, serves as a timely reminder of the risks of trying to time markets. Staying invested and maintaining a diversified approach remains, as ever, the most effective way to navigate an evolving global landscape.
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 19th May 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week: Steady rates, shifting markets
Written by Dominic Williams
Global equity markets finished the week on a mixed footing, with the MSCI All Country World Index falling by -0.5%, despite supportive central bank signals and resilient earnings. Sentiment was further supported by strength in commodity markets, even as political and policy uncertainty lingered in the background.
In the US, the Federal Reserve (Fed) concluded its two-day policy meeting by keeping interest rates on hold, as expected. The overall tone of the committee remained consistent, reinforcing the view that policymakers are in no rush to adjust policy. Chair Jerome Powell struck a notably firm tone when addressing political pressure, underlining the Fed’s independence despite ongoing scrutiny from the White House and reports of a Department of Justice subpoena relating to the Chair, adding to the political scrutiny surrounding the central bank.
Later in the week, attention turned to President Donald Trump’s nomination of Kevin Warsh as his preferred successor to Powell when the current Chair’s term ends in May, subject to Senate approval. Warsh, a former Fed governor, is regarded as more focussed on keeping inflation under control, which has eased some concerns that political pressure could lead to premature interest rate cuts. While his nomination was initially seen as a potential test of the Fed’s independence, market reaction suggested a degree of reassurance that monetary policy would remain focused on inflation control rather than aggressive easing.
The US dollar strengthened against a basket of currencies following the announcement, while gold prices fell sharply from recent highs, reflecting reduced demand for a commodity often used as a hedge against the dollar during periods of global uncertainty.
US equity markets were more volatile, with the S&P 500 briefly surpassing the 7,000 level for the first time before ending the week down -0.8%. The move was underpinned by earnings season, although results from large technology companies highlighted an increasingly nuanced picture.
In particular, earnings revealed a growing divide between firms already benefiting from AI investment and those still facing heavy upfront costs or slowing growth. Meta delivered strong results, with revenues rising sharply year-on-year and shares gaining around +7.5% over the week, as investors welcomed evidence that AI-driven improvements to advertising efficiency are feeding through into near-term profitability despite substantial capital expenditure plans.
In contrast, Microsoft reported strong headline profits but weaker-than-expected cloud growth, with shares falling sharply after the release. The sell-off wiped more than $350bn from the company’s market capitalisation, underlining growing investor concern around the near-term payback from heavy AI-related capital expenditure. Similar concerns were evident in Europe, where SAP shares fell sharply after the company warned that growth in its cloud backlog would slow, reinforcing investor sensitivity to signs that cloud and AI growth may be moderating.
Tesla also drew attention after signalling a strategic pivot away from a pure electric vehicle focus towards greater emphasis on artificial intelligence, robotics and automation. The announcement followed the company’s first annual decline in revenues, highlighting the pressure on the EV business amid slowing demand and intensifying competition from lower-cost Chinese manufacturers.
Outside equities, commodities remained positive, with the Bloomberg Commodity index rising by +1.0% over the week, in GBP hedged terms, supported by strength across energy and continued investor interest in real assets, despite some weakness in gold and silver into the end of the week. With gold and silver prices already elevated, some investors have looked further along the value chain, driving significant gains in mining equities. The surge in metals prices added hundreds of billions of dollars to the market capitalisation of global mining groups, reflecting renewed interest in real assets as both an inflation hedge and a source of diversification.
Emerging markets performed relatively well, with the MSCI Emerging Markets Index rising by +0.6% over the week, although performance masked significant regional divergence. Indonesia came under pressure after warnings from MSCI, a major index provider, raised the prospect of a potential reclassification within global equity benchmarks. Such a move could lead to forced selling by passive investors, highlighting how technical factors can have a meaningful impact on local markets.
Overall, the week underscored the resilience of global markets in the face of uncertainty, supported by steady monetary policy and selective earnings strength. At the same time, divergences across sectors and asset classes highlight the importance of maintaining a diversified and disciplined investment approach over economic cycles.
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 2nd February 2026.
© 2026 YOU Asset Management. All rights reserved.