Written by Ilaria Massei
The Office for National Statistics reported that UK consumer price inflation fell to 2.8% in the year to April – down moderately from 3.3% the prior month and below economist forecasts of 3.0%. Services inflation, closely watched as a measure of underlying price pressure, fell to 3.2%, its lowest level since January 2022. UK bond markets rallied on the news, reflecting reduced expectations that the Bank of England would need to keep rates restrictively high for an extended period or would have to raise those rates. UK Equities also rebounded strongly, as measured by the FTSE All Share, which rose +2.7%.
Global Equities ended the week on a positive note. One of the topics for public equities last week was that specialised chip manufacturer, Nvidia, reported first quarter revenues up 85% year-on-year to $81.6 billion, accompanied by an $80 billion share buyback. Despite beating estimates on virtually every measure, shares fell modestly – a reflection of how high the expectations are rather than any weakness in the business. Nvidia also signalled its intention to broaden its customer base beyond large technology platforms toward governments, enterprises, and the emerging world of physical AI – robotics and autonomous vehicles – suggesting its addressable market is still expanding.
Moving away from public equity markets, two of the most known private companies in AI made significant moves toward public markets this week. SpaceX filed for what could be the largest IPO – or Initial Public Offering, the moment a private company first sells its shares to the general public – in US history, targeting a valuation of $1.75 trillion. The business has genuine achievements – reusable rockets, the Starlink network and transformed economics of space – but the valuation demands scrutiny. The $1.75 trillion price tag reflects roughly 93 times annual revenues for a company that is not yet profitable. Investors are therefore not paying for what SpaceX earns today – they are paying for what it might become over the decades ahead. That requires a considerable degree of conviction about a very long-term and uncertain future. OpenAI – the company behind ChatGPT and one of the most recognised names in artificial intelligence – is reported to be preparing its own public listing, having most recently raised private capital at a valuation of around ~$850 billion. It too is growing rapidly but remains unprofitable.
Stock markets have had a strong start to 2026 – the MSCI All Country World Index, a broad measure of global shares, is up +10.5% for the year. However, while the environment for many AI-related leaders remains positive, not everything is pointing in the same direction. A closely watched survey of American consumers – the University of Michigan Consumer Expectations Index – fell to a record low in May 2026, suggesting that, partially driven by higher oil prices, ordinary households are feeling increasingly anxious about their finances and the economy ahead. In the UK, retail sales volumes dropped by -1.3% month-over-month in April, a larger decline than consensus had expected. Much of the decrease was driven by a 10.2% decline in auto fuel sales, with retailers noting that drivers were making fewer journeys in response to higher fuel prices.
While we acknowledge this disconnect, we still believe there is significant value to be created for long-term investors. In our view, the best way to capture that value remains investing across a broad range of asset classes and geographies and maintaining that exposure with a long-term horizon.
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