British Debt Gloom vs US Stock Euphoria — What Comes Next?

Show Notes

This Week on The Art of Investing, Rich McDonald returns from holiday to find oil at $126 a barrel and markets at all-time highs. The team try to make sense of it - rate cut expectations have collapsed, geopolitical risk has intensified, and yet the S&P 500 and Nasdaq keep climbing. Mark "Spice" Holden and Chris "CJ" Fellingham join Rich to dig into why US markets are defying every macro headwind, what it means for a portfolio that had a tough week, and whether now is the time to act or sit on their hands.

The episode also covers a deep dive into UK gilt fair value, the Bank of England rate decision, the rise of algorithmic trading and its impact on price discovery, and a listener Q&A on stop losses and what the team have genuinely learned since launching the podcast.

This Week's Highlights:

🛢️ Oil at $126 — Markets Shrug

Brent crude up nearly 20% in eight days on Straits of Hormuz fears, yet the S&P and Nasdaq hit all-time highs.

💻 Magnificent Seven Earnings Crunch

Four Mag Seven reports in two minutes - Alphabet surged, Meta fell, and the Nasdaq pushed higher.

🔧 Chip Stocks Explode

Qualcomm up 16%, Intel up 100% since April - AI chip demand is the trade of the moment.

🇬🇧 UK Gilts & the "Moron Premium"

CJ breaks down gilt fair value and why 5.75% yields may still not be cheap enough to buy.

🤖 Machines Are Winning

Algorithmic momentum trading is moving markets beyond rational levels and crowding out human investors.

Portfolio Snapshot - Week 37

No changes were made to the portfolio this week.

Weekly performance: –2.1%

Total return since inception: +16.9%

Top Performers:

🥇 iShares S&P 500 GBP Hedged ETF: +0.1%

🥈 Cash: +0.1%

Underperformers:

📉 VanEck Crypto & Blockchain Innovators ETF: –9.5%

📉 BlackRock World Mining Trust PLC: –8.7%

📉 WisdomTree Copper ETF: –3.6%

Portfolio Positioning:

A tough week, with the oil price rise hitting commodities and oil-importing markets the hardest. The team agreed not to act while market direction remains unclear - CJ's view: when you're not seeing it well, making decisions is a recipe for mistakes. Watch and wait.

 • US equities and AI beneficiaries remain core - justified by 13%+ earnings growth for six consecutive quarters

 • UK and European exposure under review - the DAX would be first to go if forced to cut

 • A move into long gilts is being considered if 30-year yields push above 6%

 • Commodities suffering from oil rotation - mining and copper the biggest portfolio drags this week

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View the portfolio breakdown: here

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Disclaimer

This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.

Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.

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What is The Art of Investing?

Looking to turn Market Chaos into Investing Clarity?

Welcome to The Art of Investing - a brand new podcast that transforms market noise into clear investing strategies. Brought to you by IG, global investing platform, FTSE 250 and over 50 years in the markets.

This isn't your typical finance show.

Whether you're taking your first steps into the investment world or you're a seasoned investor looking to sharpen your edge, you've found your new secret weapon.

Every Friday, join hosts Rich McDonald, Mark Holden & Chris Fellingham – three investing legends bringing you a combined century of market wisdom. They'll decode the week's biggest moves, reveal the hot topics that could make or break a portfolio, and share the insights that separate winners from wishful thinkers.

But here's where we blow every other podcast out of the water:

Introducing our live Model Portfolio. With IG's access to thousands of global markets, you'll watch our strategy unfold in real-time, unfiltered investment action, that you can follow.
Every week, we'll pull back the curtain on exactly how the portfolio is performing. The wins, the losses, the lessons learned – it's all here. This is investing education with skin in the game.

Are you ready to master the art of investing?

This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice, financial planning guidance, or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are for educational purposes only. Past performance is not an indication of future results. Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.