Making sense of this crazy world
Buying favour
I’m thinking of paying all my team members £5,000 to agree with all my ideas!! Of course, I’m referring to good old Donald, courting favour with the electorate. Is this the end of democracy?
It’s all change, for sure, but it’s the rate of change which is somewhat disconcerting. I read this week that AI agents now generate 57.4% of all web requests globally. Human-generated traffic has fallen to 42.6% for the first time on record, according to Imperva’s 2026 Annual Bot report.
This week, we’ve seen markets wobble on the back of the oil price breaching $100 on fading hopes of a Middle East resolution. Have you noticed how quickly prices at the pumps have risen over the last few days, but how slowly prices fall when the oil price weakens?
On Wednesday, the US Treasury department announced it would repurchase $6 billion of government debt but bond yields rose again, suggesting investors were unimpressed by another government bond buyback programme.
The EU has increased interest rates on the back of inflation fears and there is now much conjecture as to whether the Federal Reserve (Fed) will follow suit next week. Rising bond yields making this look more likely.
Amidst the turmoil, there are certain aspects which we are increasingly looking for in a portfolio. We’ll explore what these are later.
Despite all the negativity, US earnings just keep on getting better which is helping support markets.
This week’s content:
- Oil breaches $100 a barrel
- US Treasury buy back leaves markets unimpressed
- US markets tumble
- EU raises interest rates on inflation fears
- Nike shares fall 80%
- What does all the noise mean for portfolios?
- US Profit Upgrades extend for the 21st week
- Conclusion
Oil breaches $100 a barrel
The impasse in the Middle East has seen the oil price rise to $106 a barrel with elevated inflationary fears causing government bond yields to spike.
“As the conflict with Iran drags on longer than many expected, inflation pressures are becoming increasingly entrenched, leaving investors in search of a catalyst strong enough to change the inflation narrative,” said Jeffrey Roach at LPL Financial. “At this rate, a hike in rates next week appears likely.” (Source Bloomberg).
“With the inflation data overall still looking relatively hot, the Fed seems likely to hike this year, even if it doesn’t pull the trigger this month”, according to Stephen Brown at Capital Economics.
“Inflation is a physical constraint and a geopolitical problem, not a monetary problem,” said Brian Jacobsen at Annex Wealth Management. “If the Fed hikes next week, it should be a symbolic hike to assert its independence and build credibility and not in the hope that it will actually fix the inflation problem.”
Continues…
Want to get this in your inbox?
Our CEO, Gary Neild, writes engaging Market Commentaries every week. If you would like to receive the full version straight to your inbox every Friday, please join our communications list.
Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.