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This week on The Art of Investing, Rich, Mark and Chris are joined by resident strategist Stewie Thompson to unpack a huge few days for global markets.
After three major central bank decisions, attention has quickly shifted back to inflation, interest rates and the bond market. Stronger-than-expected US economic data has pushed bond yields higher again and raised a big question for investors: how high can rates go before they start pulling money away from equities and other risk assets?
The team looks at what’s happening across US Treasuries, UK gilts and Japanese bonds, why the “competition for capital” matters, and whether central banks risk falling behind the curve.
There’s also plenty happening away from bonds. Oil has fallen sharply, the Nasdaq 100 and copper have pushed higher, AI continues to drive some extraordinary moves across technology stocks, and the US dollar has strengthened.
And after a strong week for the model portfolio, the team debates whether now is the moment to bank some profits and increase the amount of cash on the sidelines.
This Week’s Highlights
📈 Why Bond Yields Are Back in Focus
Strong US economic data sends bond yields higher and forces markets to reassess how far interest rates may still need to rise.
💰 The Competition for Capital
Stewie explains one of the biggest themes facing markets: if investors can earn increasingly attractive returns from government bonds, what happens to demand for riskier assets?
🤖 AI Keeps Driving Markets
The team discusses another strong period for technology stocks, with AI investment and demand helping drive moves across Nvidia, Intel, AMD, Micron and the wider Nasdaq.
🧠 The Rise of AI Agents
The team looks at the potential impact of AI agents on everything from banking and insurance to travel and online shopping, and why the technology could create a new battle for consumers.
🛢️ Oil Falls, Markets Rally
A sharp fall in oil prices provides some relief to markets and helps support areas including emerging markets and commodities.
💵 The Dollar Strengthens
The US dollar pushes higher as stronger economic data attracts capital back towards the US and challenges expectations around the path for interest rates.
Portfolio Snapshot - Week 58:
📊 Weekly portfolio performance: +2.2%
📈 Total return since inception: +25.5%
📅 2026 year-to-date return: +13.0%
Top Performers:
📈 WisdomTree Copper ETF: +8.1%
📈 Invesco EQQQ Nasdaq 100 UCITS ETF: +6.4%
📈 iShares Core MSCI EM IMI ETC: +4.3%
📈 iShares Nikkei 225 ETF: +3.8%
Underperformers:
📉 iShares Russell 2000 ETF: -1.0%
📉 Cash: +0.1%
📉 iShares UK Gilts 0–5yr ETF: +0.2%
Portfolio Changes
After a strong run for several of the portfolio’s positions, the team debates whether rising bond yields and the changing interest-rate outlook mean it’s time to take some risk off the table.
Japan comes under particular scrutiny following another strong week, with the position now up nearly 50% since inception.
The team ultimately decides to trim the Japan allocation by 2.5%, reducing it from 12.5% to 10%, and move the proceeds into cash.
That takes the portfolio’s combined allocation to cash and short-dated gilts to 20%, giving the team more dry powder while they watch what happens next across rates, bonds and global equity markets.
Big Questions This Week:
- How high could bond yields go from here?
- Are central banks at risk of falling behind the curve on inflation?
- What does the “competition for capital” mean for equity investors?
- Can technology and AI stocks keep performing if borrowing costs continue to rise?
- Is the recent strength in the US dollar telling investors something about where global capital is moving?
- After a strong run, is now the time to take some profits and hold more cash?
- Can copper continue to benefit from the AI and infrastructure boom?
What You’ll Learn:
✔️ Why stronger economic data can push bond yields higher
✔️ How interest-rate expectations feed through into government bond markets
✔️ What investors mean by the “competition for capital”
✔️ Why higher bond yields can put pressure on riskier assets
✔️ How falling oil prices can affect commodities and emerging markets
✔️ Why AI investment continues to influence technology stocks and the wider market
✔️ How the team thinks about taking profits after a strong run
✔️ Why cash can play an important role when market uncertainty increases
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.
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.