Even For a non- political bulletin it’s impossible to ignore what is going on in that world and of course the focus this week has (mainly) been on UK with the Prine Minister coming under pressure to resign or at least announce when he might. [Ed – that’s unusual you didn’t say Prime Minister Keir Starmer in case we’d forgotten who it is- we might be on to the next soon!]
It matters!
Reported in the Independent newspaper, Britain’s long-term government borrowing costs jumped to their highest level for 28 years as City traders braced for a potential Labour leadership challenge from Andy Burnham.
The pound is also on track for its worst week since 2024 amid growing concern over political instability. The yield on 30-year UK Government bonds, also known as gilts, lifted to fresh recent highs, rising by 16 basis points.
Dan McEvoy at Money Week, comments that the contrarian investor Michael Burry, who became known to many outside of the investment world when portrayed by Christian Bale in the film The Big Short, dramatically closed his hedge fund Scion Asset Management in October, citing the seeming disconnect between how he perceived market valuations, and how everyone else seemed to. Burry made his name by identifying and profiting from market over-exuberance, and it is tempting to see everything that has happened since through this lens.
The FTSE 100 and, more recently, the S&P 500 have both reached all-time highs since then – the latter despite an ongoing geopolitical crisis that could realistically lead to an oil shock and global stagflation. Various experts, including Bank of England deputy governor Sarah Breeden, have warned of the potential danger of this juxtaposition.
Have the markets gone mad? Maybe, maybe not. One potential challenge to the bearish argument is that the fundamentals have improved alongside the price.
FactSet reported last Friday that, with 89% of S&P 500 companies having reported Q1 results, earnings have risen 27.7% year-on-year. As of close on Wednesday, the index had gained almost exactly the same amount over the past 12 months. And investors globally are reaping the rewards of these increased profits through higher dividends.
A lot of the recent market growth comes from our old friend AI. The ‘Fantastic Five’ which seems to have overtaken the Magnificent 7 as the AI spend is still set to exceed $1 TRILLION of capital expenditure by 2027 according to Mitchell Wright, Portfolio Manager at Cazenove Capital. He wonders whether the market may be shifting from:
“Will AI monetise?”
… to
“Who can actually afford to build it?”
Market Commentary
The team at Tatton Investment Management have put together another great Tatton Weekly covering the following:
- Waiting for relief – The US drove global market returns this week, helped by Trump’s positive trip to China, but tempered by inflation and a volatile bond market, which in the UK is not helped by Starmer’s withering premiership.
- Inflation round-up – Increasing energy prices are fuelling inflation, but business and consumer spending is supporting it – and adding to the quandary facing central banks.
- What the Fed can learn from the BoE – Trump’s new chair of the US Federal Reserve wants to reduce the money that banks don’t need, but that brings a risk of market volatility – a task the Bank of England is navigating with mixed success.
In Rathbones’ Weekly Digest, Head of Market Analysis John Wyn-Evans explains why stock markets have so far shrugged off geopolitical and political uncertainty. Oil prices, strong corporate earnings, and AI optimism support momentum. However, the prevailing mood still feels uneasy, keeping risks firmly in focus. And why here in the UK, the rising political instability is already driving bond yields higher.
Janet Mui, Head of Market Analysis at RBC Brewin Dolphin, examines what’s driving market optimism and the health of the U.S. jobs market in the lates Markets In A Minute
- Potential U.S.-Iran deal rallies equities: Equities saw a boost as the U.S. initiated discussions towards a potential deal to reopen the Strait of Hormuz.
- UK political changes are afoot: UK elections saw a substantial swing from the Labour Party to Reform – could this lead to the departure of the prime minister and chancellor?
- The U.S. jobs market holds up: Job openings have plateaued and a significant number of people are still quitting their jobs – despite this, job cuts increased in April.
Looking beyond AI to the usual ‘safe-haven’ assets Jane Parry, Chief Marketing Officer, at Canaccord was joined by Leah Bramwell, Head of Tailored Investment Solutions, in the latest Coffee Break Podcast [Ed – CoffeePod???] to discuss:
- Why infrastructure has evolved beyond a purely defensive role
- How AI-driven investment is feeding through into utilities and energy networks
- Why gold hasn’t behaved as expected despite inflation and geopolitical uncertainty
- What the divergence between traditional safe havens tells us about today’s market dynamics.
Something to Think About Over Your Half-Time Slice of Orange
It’s crunch time in the Premier League. The Investment team at 7IM has a lot of Arsenal and Tottenham fans, plus a lonely West Ham supporter. It’s getting exciting …
Of course, we’re not here to talk sports. We’re here to talk business.
In terms of money-making ability, UK football clubs* actually do slightly better than American NFL teams (left hand chart).
But that selling power doesn’t translate into valuation (right hand chart). Every single one of the top six US teams are worth more than £5bn. None of the Premier League teams are.
Source: Deloitte Football Money League 2026; Forbes
There are three key things different in America.
- Caps on player salaries. In the NFL, it’s 48% of league revenues. In the UK, it’s on a club-by-club basis, and wages often absorb 70% of all revenues. The top UK teams have global reach, but the players capture more of the gains.
- No relegation. Having a bad season or two isn’t the end of the world if there’s no relegation. It doesn’t affect TV rights, and so US teams can have “rebuilding” phases where they sacrifice performance for financial health. Do that too much in the UK and relegation looms.
- Less interesting songs. May not be financially relevant.
Source: x.com/daveloach2
That difference in value isn’t just in sports of course – it’s been one of the big themes in investing over the past decade or so.
BP and Chevron both generate ~$190 billion of sales per year. But Chevron ($360 bn) is worth 3x what BP is ($110bn). Similar story with Shell and Exxon.
Or look at banks, where large US institutions are consistently valued far more highly than their European peers.
Or healthcare, where US companies tend to trade on meaningfully higher multiples than comparable UK or European firms.
Very, very similar businesses doing very similar things, but the American version is worth much more than the European one.
The “rules of the game” aren’t as stark as they are between the two football codes.
But the principle is the same. The US market has made revenues more predictable, downside risks lower, and given more of the upside back to shareholders. Higher valuations have followed …
*the big ones, anyway
Important Pension News
The Finance Act 2026 received Royal Assent on 18 March 2026, and this week saw HMRC bring some clarity on what to expect. A technical note outlined some pieces of the puzzle, and as we try and get our brains round what this detail actually means (with the note setting out that final guidance is not expected until spring 2027, with changes coming into force from 6 April that year, alarm bells are ringing over a very tight timeline), I became aware of a new term that people will have to get used to. It is ‘Notional Pension Property.’
The technical note describes how notional pension property is identified, valued, and allocated to beneficiaries. For most of our clients this will be the unused assets in the pension scheme on death but needs to take into account the more complex pension arrangements that exist and the myriad different investments that are possible – hence the slightly odd reference to property.
I have mentioned in the past that it will be the responsibility of personal representatives of the deceased to obtain details of the values of the various pensions that they had. In theory the providers have 28 days from notification to provide the information requested and Personal Representatives have 6 months from the end of the month in which the person dies within which to arrange settlement of the inheritance tax due.
Now I don’t wish to cast aspersions on the ability of the providers to meet their deadlines (!), I do know that the larger the number of arrangements someone has the more likely it is that there might be problems. Assuming you do not want to leave your PR’s with headaches and the Estate having to pay interest at current rate of 7.75% (computed as 4% above the Bank of England base rate), then find any old pension arrangements you might have and think about consolidating them now.
Miscellaneous
NS&I is boosting the prize fund rate on Premium Bonds, increasing the chances of winning a prize, and raising interest rates on four other savings accounts. The government-backed savings bank will increase the prize fund rate from 3.3% to 3.8% and improve the odds of winning from 23,000 to one to 22,000 to one from the July draw. NS&I said there will be an estimated 322,000 more prizes in the July draw, with the prize pot growing by £60 million. All very good, but with investment portfolios up in the region of 10-12% this year, they should probably only be a relatively small part of anyone’s financial holdings.
Bloomberg says this week that those of a certain age will recall The Six Million Dollar Man, a 1970s television show that followed the adventures of a badly injured astronaut saved by some very expensive tech. Well, Jensen Huang is no astronaut, but he’s also no stranger to pricey gadgets, and the blistering success of Nvidia has his chipmaking behemoth hurtling toward uncharted space: a $6 trillion market capitalization.
With many thanks to our outstanding website support – Antony, our 5-minute retirement planner link appears on the front page of our website. So, if you need to see just how your plans are holding up against what you might need to retire on feel free to have a look. Friends and family can do the same if they ever want to know whether they should be doing more for their retirement needs. If you, or they have any queries about those plans please speak to your usual JB Wealth advisor.
And finally, we now have a link to the most recent copies of the bulletin of the JB Wealth website (I told you Antony was good!) and you can find it by following the link below. You’ll have to give him a day before this one appears because he doesn’t get it any earlier than you do (let’s face it, I don’t know what I’m typing until it hits the screen) but as you are currently reading this one I suppose it doesn’t actually matter!! Anyway, I’ll add the link to future bulletins so you can catch up on any you missed if you really want to!
And just as we come to the end of Mental Health Awareness week, I just wanted to acknowledge anyone going through tough times, including within that friends and families of anyone struggling. Please reach out if you need to and I hope to catch up with you next time.