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The Mearns & Company 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 - 8th December 2025
[00:00:00] Rory Dowie: Good morning and welcome to the Podcast. I'm Rory Dowie, Portfolio Manager here at Marlborough. It's the 8th of December, and we're officially in the home stretch of the year, and today I'm delighted to be joined by Andrew Shaw. Andrew is a Senior Investment Analyst on the team. So firstly, Andrew, good morning.
[00:00:15] Andrew Shaw: Morning, Rory.
[00:00:17] Rory Dowie: I guess we're heading into the Christmas period. I'm sure lots of our investors are hoping for a Santa rally. Santa rally, obviously being when equity markets actually rise over the Christmas period, and actually it's a phenomenon that if you look back in historical data has been something which has happened.
[00:00:30] Rory Dowie: So I guess, Andrew, any signs of that? After more volatile November?
[00:00:34] Andrew Shaw: It was pretty positive week last week, Rory, in the US the S&P pushed higher, finishing up around about 1% for the week. Japan was the strongest of the major developed markets, finishing up 2%. Here in the UK the FTSE 100 did okay. It was of 0.3%.
[00:00:49] Andrew Shaw: We've finally seen markets settle down after the autumn budget, and then we've got Europe and Europe's up around about 1% as well.
[00:00:57] Rory Dowie: Nice. So a bit of green on the screen, I suppose the first week of December, starting with the US Andrew. Usually the first Friday of every month is about the non-par farm payrolls.
[00:01:07] Rory Dowie: That's the big government jobs report, essentially, which measures paid workers in the US but last week we didn't get that, did we?
[00:01:13] Andrew Shaw: No, we didn't. Normally that report is kind of the headline act of the data that's released, but because the recent government shutdowns, the Bureau of Labor Statistics has actually delayed the release until mid-December.
[00:01:25] Andrew Shaw: So investors are flying blind on the official numbers.
[00:01:29] Rory Dowie: So I suppose the market had to look elsewhere?
[00:01:31] Andrew Shaw: Yeah. There's a report called the ADP report, which tracks private sector hiring. That showed that the US economy actually lost 32,000 jobs in November. To put that in perspective, economists were expecting a gain and the October number was a positive 47,000 net additions.
[00:01:48] Rory Dowie: So I guess that sounds like not great news to the US economy, but, and this is often the part that confuses some investors. The US stock market actually rallied on this news. So could you help our listeners understand why that was?
[00:02:00] Andrew Shaw: It's that classic bad news is good news dynamic. And when the job market looks weak, it takes the pressure off inflation.
[00:02:08] Andrew Shaw: If businesses aren't hiring, then they're not gonna hike wages as fast and for the market that weak job number basically gives a green light to the Federal Reserve. It solidified the belief that the Fed has to cut when they meet this Wednesday, and the logic is the economy's slowing, so the Fed will step in to save the day with cheaper money.
[00:02:28] Andrew Shaw: And that's why we saw the S&P500 and Nasdaq tick higher.
[00:02:32] Rory Dowie: So investors are effectively cheering a slowdown because it makes it more likely that we get that fed rate cut coming through. It's obviously a delicate balance though, isn't it? If the data gets too bad, then we start worrying about recession rather than just a rate cut.
[00:02:45] Rory Dowie: So it's sort of that sweet spot.
[00:02:47] Andrew Shaw: Yeah, that's exactly it, and that's the risk. And the ADP data showed that small businesses, the ones that are shedding most of the jobs, and if that trend continues, the soft landing everyone is hoping for, might start to feel a little bit bumpier. But for last week at always the market chose to see the glass is half full and markets rowed.
[00:03:06] Rory Dowie: Yeah. Great update there Andrew. I guess moving on, we had the economic data there, but we did get some quite important corporate news over the weekend. We have had rumors over the weeks, but it is finally official. Netflix is acquiring Warner Brothers. Andrew, could you just help our listeners understand the scale of that deal?
[00:03:24] Andrew Shaw: Yeah, it is a monumental deal. $83 billion deal. Netflix is buying Warner Brothers film and TV studios, plus HBO and the HBO Max streaming service. They're effectively buying the crone jewels of Hollywood, Harry Potter, Game of Thrones, the DC Universe, and they're adding them all to the Netflix library.
[00:03:44] Rory Dowie: I suppose that's an incredible amount of content, but I guess what happens to the rest of Warner Brothers?
[00:03:49] Rory Dowie: I assume Netflix might not want all of the old cable channels that Warner Brothers has.
[00:03:54] Andrew Shaw: Yeah, exactly. It is a messy split. The old media assets like CNN and the Discovery Channel are being spun off into a new separate company. Netflix is cherry picking the streaming and studio assets and weaving the declining cable business behind.
[00:04:08] Rory Dowie: I guess importantly, how did the market react to this? Usually the company doing the buying can often see their share price full. 'cause you know, they might be spending too much money. There could be integration risks. How did the market react to Netflix then?
[00:04:19] Andrew Shaw: That's exactly what happened. Rory, Netflix shares fell about 3% on Friday.
[00:04:24] Andrew Shaw: Investors are worried about two things, really. I mean, that price to $83 billion is massive. And then regulation as well. The Trump administration has already signaled that they might scrutinize this deal. It creates a streaming monopoly essentially, doesn't it? And if you combine Netflix and HBO, you have a massive chunk of the market.
[00:04:43] Rory Dowie: Yeah, absolutely. Seriously, big deal there. And I guess you know, one to watch
how that plays out, but obviously market just worried a little bit with the uncertainty and those integration risks as you say. Looking forward, Andrew, you did allude to it at the start, but anything on the calendar
this week our listeners should listen out for or watch out for?
[00:05:00] Andrew Shaw: The big one this week, Rory, is at the Federal Reserve meeting. On Wednesday evening UK time, we'll get an interest rate decision. As mentioned, the market expects a cut, which is 25 basis points or a quarter of a percent. More importantly, we need to listen to what they say about 2026. Will they cut once and stop or is this the start of a regular cutting cycle?
[00:05:19] Andrew Shaw: That guidance is what we'll be looking to and what will move markets. The ECB or the European Central Bank decision, Europe's a little bit weaker economic within the US so is a even more pressure on the ECB to cut rates to stimulate growth.
[00:05:35] Rory Dowie: Brilliant. Thanks for that Andrew. So I guess in summary, it's Essential Bank Week one in the US, one in Europe.
[00:05:40] Rory Dowie: Andrew, as always, thanks for joining to our listeners. If you have any questions, please send them in. Otherwise, have a great week.