This information is intended for professional financial advisers only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Model investment portfolios may not be suitable for everyone. The value of funds can increase and decrease, past performance and historical data cannot guarantee future success. Investors may get back less than they originally invested.
I work for an advisory / professional firm or other eligible counterparty.
I will take responsibility for any jurisdictional restrictions that apply to the services described by this website in accordance with applicable law and regulation.
I have read and accept that Cookies are used on this website. I understand that a Cookie will show that I have accepted the terms to access this website.
I confirm that I am resident in the UK or other EU Country and I am not a US citizen.
I have read and accept that Cookies are used on this website. I understand that a Cookie will show that I have accepted the terms to access this website.
The content of this website may only be viewed by persons that meet either of the above conditions. If neither option is applicable please click here which will close this webpage.
14th May 2026
Cappuccino Commentary
April 2026 Review
The conflict in Iran continued to dominate global financial markets in April. Right after Easter, President Trump threatened “a whole civilisation will die tonight” if a deal to reopen the Strait of Hormuz couldn’t be reached. Thankfully he backed down and started the ceasefire that is still going on today, kicking off a reasonable month for markets. Despite the ceasefire, tensions between the US and Iran continue to make headlines, with the Strait of Hormuz remaining severely disrupted. An estimated 20,000 seafarers are stranded on board 2,000 ships in the Strait. Oil prices maintained their place above $100 a barrel, creating significant uncertainty around economic growth and inflation. For more details, see my colleague Richard’s recent article for FT Adviser on the situation in Iran and its impact on markets, energy independence and inflation.
Most equity asset classes were negatively impacted in March, however they recovered significantly in April, and most regions are now positive over the last three months. Within developed markets, US led returns generating gains of 4.8% followed by Japan (3.7%) and the UK (1.6%). Europe is the only developed market to lag over the last three months, falling -0.7%. Emerging Markets and Asia also performed well with gains of 7% and 3.2% respectively. Renewed AI optimism helped Japanese and South Korean markets excel thanks to their respective dominance in the semiconductor and memory chip industries.
The Magnificent 7 firms, Amazon, Alphabet and Microsoft all exceeded earnings expectations with their cloud computing units benefitting from the intense demand for AI infrastructure. Chinese AI startup DeepSeek showed a preview of their new model later in the month but, despite it being much cheaper and easier to optimise than its US counterparts, US tech markets were spared the type of hit they took when DeepSeek first launched in January 2025.
April was a good month for US company earnings, with 84% of reporting firms beating estimates. Major US banks posted strong numbers as the volatility caused by the Iran conflict significantly increased client trades. On a less economically cheery note, towards the end of the month US public debt ($31.27tn) surpassed annual US GDP ($31.22tn) for the first time since the Second World War.
As expected, all major central banks opted to hold interest rates. Jerome Powell led a Fed Committee meeting for what is likely to be the last time, with Kevin Warsh set to take over this month. Powell announced he’ll remain on the Fed’s Board of Governors until investigations against him and the Fed are “truly over”. Most bond indices finished the period lower.
Government bond yields moved higher (as bond prices fell) on concerns that the recent surge in oil prices would feed into higher inflation. This was particularly acute in the UK where expectations shifted from interest rate cuts (prior to the Iran conflict) to expectations of a potential rate hikes. The UK’s reliance on imported energy may potentially amplify the inflationary impacts of higher energy prices and as a result Gilts fell -1.8% over the last three months. The turmoil caused by the local election results last week has sent bond yields to a 28-year high. Though short- dated, investment grade bonds did manage to generate modest gains in April.
Alternative assets had a mixed month. Oil prices have risen sharply since the conflict started, and day to day price movements remain extremely volatile given the uncertainty around peace negotiations. Infrastructure stocks performed well over the period as demand for energy and other projects continues to increase. Precious metal saw a sharp reversal from its record highs, and we’ve seen some volatility in property markets as interest rate expectations fluctuate.
Needless to say, the conflict in Iran has increased market uncertainty and remains a fluid situation. History suggests that markets often stabilise once the initial uncertainty begins to fade. This pattern was visible following the outbreak of the Russia-Ukraine war and during earlier conflicts such as the Iraq and Gulf wars. While initial reactions were often significant, markets typically recovered as the situation became clearer. From our perspective, we’ll keep banging the same drum: avoid making kneejerk decisions and focus on diversification to help weather volatility.
Please note:
For regulated financial advisers and investment professionals only. Copia does not provide financial advice, and the contents of this document should not be taken as such. The value of investments can increase and decrease, past performance and historical data cannot guarantee future success, and any references to individual stocks or asset classes are made purely for illustrative purposes.
The performance of each asset class is represented by certain Exchange Traded Funds and Passive Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at last UK market close before the end of the calendar month. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.