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The AFH Wealth Management Monday Espresso is your essential five-minute investment briefing, equipping you with everything you need to know for the week ahead. Marlborough's Multi-Asset Solutions Investment Team summarise market events over the past seven days and preview the key events in the week ahead, while also sharing their expert insights.
Monday Espresso Podcast 18th May 2026
[00:00:00] Nathan Sweeney: Good morning and welcome to the Monday Espresso Podcast. It's Monday the 18th of May. I'm Nathan Sweeney, and today we're gonna break down the key global markets and economic news to help navigate your investments for the week ahead.
[00:00:13] Nathan Sweeney: So joining me today to analyse these fast moving events is our Investment Analyst, Nick Warmisham. Good morning Nick. How you doing?
[00:00:19] Nick Warmisham: Good morning, Nathan. Doing well, thank you. Happy to be on the pod.
[00:00:22] Nathan Sweeney: So let's start with markets. So how did markets perform last week?
[00:00:27] Nick Warmisham: Yeah, well it was a record breaking week across the Atlantic. The S&P closed above 7,500 for the first time on Thursday, while the NASDAQ composite set a fresh all time high as both indices shrugged off the geopolitical backdrop.
[00:00:41] Nick Warmisham: The move was led by semiconductors with Nvidia rallying more than 10% over the five sessions to push its market cap above $5.7 trillion. This was helped by the US clearing H200 shipments to 10 Chinese firms during the Beijing Summit.
[00:00:58] Nick Warmisham: Asia however, diverged sharply on Friday. Japan's Nikkei 225 and South Korea's KOSPI both pulled back. The KOSPI shedding more than 6% from a fresh record high as regional investors turned more defensive following the conclusion of the US China summit and ongoing Middle East tensions.
[00:01:19] Nathan Sweeney: Yeah, so we've had this really strong run in markets over, say the last six weeks now, so really strong moves hitting fresh new highs.
[00:01:27] Nathan Sweeney: But we are seeing a little bit of weakness towards the end of the week, particularly on Friday as you're seeing a bit of profit taking there. But, earnings were particularly strong this earning season. So yeah, we don't really have any concerns at this point.
[00:01:40] Nathan Sweeney: But I think one of the things that people will be concerned about is UK politics.
[00:01:45] Nathan Sweeney: Let's touch on that, because you're obviously seeing this open revolt within the government. We've seen, Wes Streeting has resigned as the Health Secretary last week, and this is really putting a bit more pressure on Prime Minister Keir Starmer.
[00:01:57] Nathan Sweeney: And we've openly seen about 90 Labour MP's calling for Starmer to step down and the Greater Manchester mayor Andy Burnham is the real contender here, we think, for Labour as a replacement for Starmer. And it looks as if that's beginning to move into place, but we'll be watching that and what essentially that means.
[00:02:18] Nathan Sweeney: So I suppose from your perspective, Nick, why does this political instability matter for investors?
[00:02:25] Nick Warmisham: Yeah, well, I suppose at the end of the day, it comes down to predictability. Financial markets really dislike uncertainty.
[00:02:31] Nick Warmisham: If you think of a country's leadership, like the executive team of a major corporation. If senior management is publicly fighting over who's running the company, shareholders become hesitant.
[00:02:42] Nick Warmisham: For the UK, this political friction delays long-term economic and fiscal policy decisions.
[00:02:47] Nick Warmisham: When investors are unsure of what tax on regulatory policies will look like in the coming months, they tend to pause capital deployment.
[00:02:54] Nick Warmisham: And this is why we've seen some choppy trading in UK domestic equities. It's a time for patience rather than panic, I'd say though. As political noise usually creates short-term volatility rather than long-term structural damage.
[00:03:06] Nathan Sweeney: Yeah, so we've seen a little bit of move in markets really, so it's kind of playing through the currency, currency has been a little bit weaker, but yeah, so we don't see any real major concerns as a result of anything that's happening at this moment.
[00:03:17] Nathan Sweeney: Ultimately, in portfolios, you're generally getting a much higher exposure to markets outside of the UK. So the US would be a big component of that and usually that's where people would spend a lot of time focusing on the impact of what's happening in the US opposed to the UK.
[00:03:34] Nathan Sweeney: So while it might seem unsettling, it does have less of an impact on portfolios.
[00:03:39] Nathan Sweeney: So I think, yeah, Nick, all of that makes sense. Clearly, I think we should really pivot to what's happening outside of the UK.
[00:03:46] Nathan Sweeney: So last week we did see the US President, Donald Trump, he kind of wrapped up that highly anticipated visit to China, where he was meeting face-to-face with Xi Jinping in Beijing.
[00:03:56] Nathan Sweeney: So what were the key takeaways from that summit?
[00:03:59] Nick Warmisham: Yeah, well, I'd say the summit was relatively balanced diplomatically, although there were some clear warnings given as well.
[00:04:07] Nick Warmisham: I'd say on the positive side, both leaders agreed on a framework for strategic stability. We also saw President Trump travelling over with a prominent delegation of US business leaders, including Apple's Tim Cook, Tesla's Elon Musk, and NVIDIA's Jensen Wang, to discuss expanding market access.
[00:04:26] Nick Warmisham: However, there were some underlying tensions that remained high. Xi's issued a direct warning regarding Taiwan telling Trump the two nations could come into conflict if the issue were handled improperly.
[00:04:38] Nathan Sweeney: Yeah, and I think Taiwan's really critical for global markets, particularly tech investors. Is that correct Nick?
[00:04:44] Nick Warmisham: Yeah, exactly. Taiwan is the global hub for advanced semiconductor production and any escalating friction there immediately impacts global technology, funds and supply chains.
[00:04:57] Nick Warmisham: On the immediate economic front, the summit produced two notable developments on energy by the way. Xi expressed interest in increasing purchases of US crude oil, and both sides agreed that the Strait of Hormuz should remain a free waterway that builds on China's earlier assurances given in April that it would not provide any arms to Iran.
[00:05:18] Nathan Sweeney: Yeah, and I suppose that leads us directly into the situation in Iran. So we've got this US naval blockade of Iranian ports, and it's been in place since about mid-April.
[00:05:27] Nathan Sweeney: So the Strait of Hormuz remains heavily disrupted, and that war began back in February, so it's now its third month. So despite these major geopolitical risks, US equity markets, specifically the S&P, the NASDAQ, they've closed up fresh highs last week.
[00:05:43] Nathan Sweeney: The stock market is holding up well. So what's your thoughts on that?
[00:05:46] Nick Warmisham: Yeah, it does seem quite counterintuitive really, doesn't it? However, equity markets are currently focused on the underlying corporate earnings.
[00:05:54] Nick Warmisham: Right now, the substantial capital flowing into artificial intelligence and technology infrastructure is driving exceptional profitability for mega cap tech companies.
[00:06:04] Nick Warmisham: Because these firms hold such significant weight in the broader indices, their performances lifting the entire market.
[00:06:10] Nathan Sweeney: Okay? So yeah, it' s really earnings here that are shining through. So really strong earnings and they're buffering the market weakness that we were expecting from this geopolitical shock.
[00:06:21] Nathan Sweeney: Okay, so let's move to the week ahead. We obviously covered off quite a bit in that segment.
[00:06:26] Nathan Sweeney: So what should investors be looking to watch out for next week?
[00:06:30] Nick Warmisham: Well, there are two primary areas of focus. First, we have fresh CPI prints for both the UK and the Eurozone. Investors will be analysing these closely to see if recent energy price increases are feeding back into core inflation.
[00:06:44] Nick Warmisham: Secondly, several Federal Reserve officials are scheduled to speak in the US markets will be listening carefully to determine if geopolitical risks are altering their outlook on interest rates, particularly given last week's stronger CPI and PPI readings pushed market pricing towards a small but rising probability of a hike rather than a cut by year end.
[00:07:06] Nathan Sweeney: Yes, and I think the interesting piece for investors and markets was we're going to have a new Fed chair. So we'll see what that brings.
[00:07:13] Nathan Sweeney: But I think there'll be gonna be a lot of political pressure from the Trump administration on the new Fed chair to get interest rates lower.
[00:07:22] Nathan Sweeney: But in order to do that, they're going to need to sort out the situation in the Strait of Hormuz because obviously that will get oil prices down, which will lead to lower inflation and that paves the path to rate cuts.
[00:07:35] Nathan Sweeney: So Nick, thank you. So some real great data insights there today and I think our listeners will really appreciate. So thank you for that.
[00:07:42] Nick Warmisham: Thank you very much, Nathan.
[00:07:44] Nathan Sweeney: So that concludes this week's episode of the Monday Espresso Podcasts. Thank you and have a great week.