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The 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 – 26th May 2026
[00:00:00] Rory Dowie: Good morning. Summer is officially here. Hope you all had wonderful long weekends. Today is Tuesday the 26th of May. I'm Rory Dowie, portfolio manager here at Marlborough.
[00:00:09] And joining me today is Andrew Shaw. Andrew is one of the investment analysts on the team. So Andrew, first things first, good morning.
[00:00:15] Andrew Shaw: Morning, Rory.
[00:00:17] Rory Dowie: Actually a fairly subdued week last week relative to some of the weeks we've had so far this year anyway. I'm keen to cover a few things this morning, Andrew.
[00:00:24] A key event last week, probably NVIDIA's earnings on Wednesday night after the bell, the number one AI company globally, and there were some interesting comments I want to pull out from beneath the surface. That also pretty much drew earnings season to a close.
[00:00:39] There were also some comments out of Iran on Thursday, but before we get into all of that, Andrew, markets, how did they get on last week?
[00:00:45] Andrew Shaw: It was a solid week last week for markets, Rory. Leading the way was Japan. The Nikkei was up 4%, behind that was actually Europe.
[00:00:54] Europe has been a laggard this year, but returned 2.4% in the week, whilst the UK was up 1.5%. US was up just under 1%. Interestingly, the US has had its longest streak of consecutive weekly gains since 2023, and really that was on the hopes that we're moving closer to getting a deal between the US and Iran done.
[00:01:18] Rory Dowie: Markets continuing to grind higher then. Really for us it seems like that's been supported by the corporate earning season in the US, companies reporting their Q1 earnings or corporate performance from Jan through the end of March.
[00:01:30] Andrew, now we're at the end of earning season, can you give our listeners a feel of actually how strong that earnings picture has been?
[00:01:37] Andrew Shaw: Yeah, so about 96% of companies have now reported, virtually everyone, all the big names. 84% of companies were beating earnings expectations, so that's a really strong performance coming through.
[00:01:48] And on top of that, year on year growth for the S&P 500 is 27.7%. If that ends up being the actual growth rate, it's going to mark the highest earnings growth since Q4 2021.
[00:02:02] Rory Dowie: Wow, so almost fastest growth in five years if that growth rate continues for the remaining 4%. And clearly that's sort of backward looking, Andrew. Was there anything on the company guidance that is, you know, looking forward?
[00:02:15] Andrew Shaw: Yeah, so companies will often give out guidance, which is essentially their expectations for business performance in the future.
[00:02:23] There've been less guidance this earning season, and fewer companies than usual have actually upgraded their outlooks. Why? It's really about the uncertainty in the Middle East. Companies have been reluctant to give guidance as there are a lot of unknowns.
[00:02:37] For example, the cost of energy. Management teams have been playing it safe or being conservative if you prefer.
[00:02:43] Rory Dowie: Very clear, Andrew. Interestingly, if you look at the price to earnings ratio for the S&P 500, that is the price level of the index divided by the earnings, and actually that's a measure of value. That has actually come down in US this year.
[00:02:56] Or in other words, despite the strong US performance that we've seen, the value of the US index has got cheaper, and that's because the denominator in that equation, the earnings, have gone up.
[00:03:07] Those earnings have been very strong. And actually if you look at where the US is today, it's actually about 15% cheaper than it was at the start of the year, albeit still at high levels
[00:03:18] Moving on, NVIDIA, they had earnings after the bell on Wednesday. What were they saying?
[00:03:23] Andrew Shaw: Yeah. The reported numbers were excellent.
[00:03:25] Revenue came in at $81.6 billion, which was 3% ahead of expectations, and they beat earnings by 5%. So they also raised their guidance for performance for the rest of the year, so no real signs that the AI trade is winding down anytime soon.
[00:03:43] There were a couple of comments beneath the surface which were interesting.
[00:03:46] Jensen Huang stated that the H100 rental prices are up 20% in 2026, even though the H100 chip launched in 2022, which is actually now three GPU generations old. And why is that important? It essentially means that there is so much demand that old chips are still being fully utilized.
[00:04:08] Rory Dowie: Okay, so very strong numbers, and clearly doesn't look like the AI build-out is slowing down anytime soon.
[00:04:15] Interestingly, the stock didn't move too much on the day. Lots of reasons as to why that could have been. But for me, these were excellent numbers. And management spoke to $3 to $4 trillion being spent by 2030 on the AI build-out as well.
[00:04:28] Moving on, we had some comments out of Iran on Thursday. Clearly, that's been bubbling along in the background.
[00:04:33] Andrew, what was the update there?
[00:04:35] Andrew Shaw: Yeah, talks have intensified, but no deal yet. Iran said on Thursday that no agreement has been reached yet with the US despite narrowing gaps in negotiation over Trump's latest peace proposal.
[00:04:49] Trump has halted US military action while Iran reviews the proposal, and Vice President JD Vance warned the US remains locked and loaded for further military action should Iran reject the deal.
[00:05:01] Tehran said Washington's latest proposal would reduce the gaps to some extent between the two sides, and Trump said efforts to finally reach a deal to end the war could take a few days, though he also again threatened renewed military action at the same time. So we'll wait and see what happens.
[00:05:19] Rory Dowie: Better noise coming out of both sides then, but still no deal. Hopefully soon.
[00:05:24] Looking forwards, what have our listeners got to look out for this week?
[00:05:28] Andrew Shaw: Usual slew of economic data. In the US, we have PCE and spending data, and closer to home in Europe and the UK, some smaller economic data points. So not tons really. There will be a few companies reporting earnings, but earnings season's pretty much finished now.
[00:05:45] Rory Dowie: Brilliant. Thanks, Andrew, for joining me. Listeners, hope you found that useful. As always, please reach out if you have any questions, and wishing you all a great week ahead.