Copia Capital

Weekly Espresso

Peter Wasko — Mon, 14 Sep 2026 14:00:27 +0000

The infoshot to help kick-start your week

Coming up this week:

Fed interest rate decision – Wednesday

Following the latest inflation data from the Bureau of Labor Statistics, which showed PPI increased 0.4% in August and CPI remained high at 3.4%, the odds of a Federal Reserve rate hike have increased to 85%. In a little under a month, the odds have gone from around 50% to a near-certainty. If the Fed doesn’t increase rates, it’s likely to raise some serious questions about its independence and credibility, potentially driving US Treasury yields to record highs.

BoE interest rate decision – Thursday

Here in the UK, the Bank of England (BoE) is expected to hold rates at 3.75% on Wednesday. Three of the Bank’s nine committee members voted to hike rates at the last meeting, and it’ll be interesting to see if that changes. Inflation is set to be forced upwards when Ofgem’s next price cap starts in October sending household energy bills up 4%. The UK’s better-than-expected recent economic growth coupled with persistently rising energy prices might prompt more committee members to vote for a hike in the autumn months.

BoJ interest rate decision – Friday

With the yen’s recent improvement, the Bank of Japan (BoJ) are expected to raise interest rates to 1.25%, the highest they’ve been for more than 30 years. US Treasury Secretary, Scott Bessent, said on Tuesday he expects Japanese interest rates to rise after the US Treasury intervened in exchange markets to prop up the yen in July.

Last week:

Oil hits $100 a barrel sending markets downwards

Markets across the globe fell as the price of crude oil rose above the $100 mark for the first time since May. On Thursday, Saudi Arabia had to suspend operations through its East-West pipeline after a Houthi drone strike. Saudi oil traders have said they will run out of oil exports if the pipeline doesn’t reopen within days, hampering around 4% of the global oil supply. Yesterday, the Houthis also captured the island of Perim expanding their control of the Bab al-Mandab strait.

Supply pressures forced US retailer Costco to start limiting how much motor oil consumers can buy to 40 gallons per week. While that won’t have much impact on regular consumers, it will hit small businesses and farmers who rely on buying the product in bulk.

With no end in sight to the conflict in Iran, the prospect of further domestic inflation and his polling numbers falling through the floor, President Trump used his speech at the Republican midterm convention to urge his supporters to “cheat like hell” and promised a $5,000 “dividend” to all US adults if the Republicans manage to win the House of Representatives and the Senate.

Existential threat from superintelligence dominates headlines

US AI firms were put firmly back in the spotlight following viral posts by former Anthropic and OpenAI employee, Jacob Coxon. While short on detail, Coxon’s posts on the existential threat posed by superintelligence rapidly raked in 100mn views, secured him spots on several major news networks and have dominated the headlines since.

This has led to fresh calls for more regulation and oversight from across the political spectrum, with immediate controls around recursive learning (the ability for AI to self-improve through its own coding) and chain of thought experiments (allowing AI to write reasoning logic in a format we can’t understand) top of the agenda. During his trip to Ireland, Trump dismissed those calls saying critics were “bringing up things that won’t happen”. People hoping for a slowdown in the push for superintelligence, will be praying something comes out of the next US-China summit in Washington on 24 September as it’s clear the current US administration will stop at nothing in the race with China.

From an investing perspective, the existential threat posed by superintelligent AI has been clearly articulated many times over the last few years (see “If anyone builds it…” or any interview with Nobel Prize winning “Godfather of AI”, Geoffrey Hinton), and as political and public pressure grows, we may see a global pause or halt which would dramatically change the current market outlook, especially in the US and certain parts of Asia. All the data centre buildouts and debt spending have effectively been to fuel the race towards superintelligence, and it’s looking increasingly unlikely the current outputs from US ‘Large Language Models’ (LLMs) will ever reach any form of profitability if they remain where they are today. In our view, what we’ve seen this week has only added support for the case of prioritising diversification and being wary of US big tech and AI hyperscalers.

ECB increase rates, while concerns grow over the future of Europe’s largest economy

The European Central Bank (ECB) raised interest rates in line with expectations on Wednesday. Markets are predicting two more rate hikes before the end of the year. The ECB blamed the conflict in Iran for pushing up inflation and said, “inflation is set to remain well above target for an extended period.”

In German bond markets, the far-right Alternative for Germany’s (AfD) election win in Saxony-Anhalt sent the 10-year Bund yield close to a 15-year high. The AfD didn’t win an overall majority, but their rapid rise is raising serious questions about the prospects for Europe’s largest economy. After Trump congratulated the AfD, the embattled German Chancellor, Friedrich Merz, cancelled his scheduled call with the US president and accused the AfD of seeking “ethnic cleansing” and said their “remigration” policies will destroy the German economy.

Notice:

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 performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. 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.

The post Weekly Espresso appeared first on Copia Capital.

Tips for CIP outsourcing 2: Holding providers to account

Gary Stirrup — Wed, 09 Sep 2026 11:48:05 +0000

In our first blog on CIPs in 2026: Tuning the Engine for Growth, our latest research with the lang cat, we looked at the case for formal governance when outsourcing a CIP, including robust documentation and monitoring processes. Now we’re turning our attention to how firms interact with their providers to make sure they are getting the best value from outsourcing.

When selecting any provider, whether platform or investment manager, advisers will be conducting research and due diligence. The most important factor here is ensuring individual client suitability, but good research and due diligence will go beyond that.

We believe advice firms should be more demanding of the providers they entrust with client wealth. This should include being clear about where responsibilities lie, how advisers want to be supported, and the service standards expected. They should also have a process in place for switching if a provider fails to live up to that standard. At Copia we welcome having these conversations with the advice firms we support. We would encourage other firms to be mindful over how their providers approach the issue.

Selection process

Data from the lang cat’s Analyser due diligence tool finds that advisers, rightly, look at service, reputation, financial strength and technology alongside price when assessing investment platforms. However, the Analyser data shows when it comes to MPS provider selection, the emphasis is mainly on price and past performance. These are important metrics, but they are relied upon disproportionately compared with other factors.

This lack of granularity continues once an MPS provider is in place. Our 2026 CIP research found that over 80% of advisers said persistent underperformance against the benchmark or peer group would trigger a deeper review or a change of provider. Poor service or reporting was the next most cited trigger, at 71% and an increase in charges or concerns about cost and value came third at 63%. By contrast fewer than half (48%) of advisers identified risk drift or volatility mismatch as a trigger and just 27% cited too high model turnover or excessive trading.

It is up to advice firms to decide what is important to them, and we encourage firms to share this with providers so all parties are clear on the outcomes that are expected. Provider due diligence is part of the CIP documentation the FCA already expects firms to keep, and criteria for ongoing monitoring is a vital part of this documentation so it’s worth reviewing if you’re updating your CIP paperwork.

Switching triggers

As firms get more rigorous in assessing MPS providers, it’s worth setting a formal procedure for what would trigger a switch and how it would be handled. There are a few questions worth considering.

What would trigger the switch? Have clear thresholds and red lines for switching, beyond just price and performance.
What would happen next? Think about the practicalities of switching and whether a substitute provider has already been identified.
What would you need to tell clients? Put procedures in place around what would be communicated to clients, when and how, including assessing the level of detail and tone required for different clients, taking any vulnerability factors into account.
What would you need from the provider? Consider ahead of time what you’d need from a provider if a switch became necessary, both for your own governance processes and for client communication.

Looking ahead

Across our three CIP studies, we’ve found that a key driver behind the move to outsourcing has been CIPs becoming a victim of their own success. Growth in client banks and assets can reach a tipping point where running investments in-house creates an unmanageable operational burden. As well as having strong governance in place, firms also need to stay adaptable.

Establishing formal governance processes and holding providers to account will cover most of what’s needed to run a CIP well when outsourcing investment for the majority of their clients’ assets. But it’s worth anticipating what may need to change as the firm changes. In our final blog of the series, we look at what advisers should keep in mind about the direction their CIP needs to take as their business grows and the market and regulations change.

Find out more about our investment services

If you’d like to speak to our team about how we can help your firm manage it’s CIP, call us during office hours Monday to Friday on 020 4599 6475, or email info@copia.co.uk.

This article, like our investment services, is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Remember, the value of investments will fluctuate, and capital is at risk.

The post Tips for CIP outsourcing 2: Holding providers to account appeared first on Copia Capital.

Weekly Espresso

Peter Wasko — Mon, 07 Sep 2026 14:23:58 +0000

The infoshot to help kick-start your week

Coming up this week:

US inflation data – Thursday & Friday

Following last week’s US jobs data boosting the chances of a Fed interest hike this month, all eyes will be on the latest inflation data this week.

PPI and CPI numbers will be released on Thursday and Friday. Inflation worries have increased again after fresh strikes sent oil prices higher and Iran announced a new restricted zone accompanied by maps of a new shipping corridor through the Strait of Hormuz.

ECB interest rate decision – Thursday

As central banks come under more pressure to raise interest rates, expect the European Central Bank (ECB) to lead the way by raising its key interest rate +0.25% on Thursday. Eurozone inflation increased to 3.3% in August, way above the ECB’s 2% target, with energy inflation soaring to 14.3%.

Apple’s “Surprise and Shine” showcase – Wednesday

Apple will be hosting their annual product showcase this week. Apple’s plans and growth prospects have been far less AI-obsessed than their Mag’ 7 counterparts, and it’ll be interesting to see if that approach looks set to continue.

This year’s event, dubbed “Surprise and Shine”, will be the first without Tim Cook since he stepped down as CEO earlier in the year. Rumours suggest replacement CEO John Ternus, and his team, will showcase the foldable iPhone Ultra, the latest Apple watch, and the “new Siri experience”.

Last week:

Parts of the AI supply chain soar

Key parts of the AI supply chain, Dell and Broadcom, posted their Q2 earnings last week.

Demand for AI hardware and servers saw Dell’s revenue break records, increasing 58% year-on-year and Broadcom’s AI semiconductor revenues more than tripled in the same period. Both share prices surged in response, but the US’s tech index was relatively flat overall due to increased rate hike chances and rising oil prices.

Gilt yields surge

Higher oil prices put fresh pressure on bond markets sending yields across the globe up. 30-year UK gilt yields hit 5.80% their highest level since 1998 and their equivalent US government bond yields also reached their highest level since 2008. Japan’s 10-year yield hit 3% for the first time in thirty years, doubling the rate it was at when Sanae Takaichi became Prime Minister.

Yields did pull back later in the week as the rise in oil prices slowed. All the turmoil in bond markets doesn’t show much sign of slowing down, as investors, perhaps rightfully, worry about inflation, government debt and corporate debt fuelled by AI hyperscalers.

More gold moved out of North America

De Nederlandsche Bank, the central bank of the Netherlands, confirmed last week that they’d relocated 86 tonnes of their gold from the US and Canada to London. Citing “increasing geopolitical unrest” the Bank’s Governor Olaf Sleijpen said “we need to strengthen our resilience and preparedness” without giving many actual details on what he’s preparing the bank for. Selling 59 tonnes and buying them back in London limited how much actual gold was physically moved. The relocation follows a similar decision by the Bank of France, which moved 129 tonnes of gold from New York to Europe between July 2025 and January 2026.

Notice:

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 post Weekly Espresso appeared first on Copia Capital.

Weekly Espresso

Peter Wasko — Tue, 01 Sep 2026 11:25:19 +0000

The infoshot to help kick-start your week

Coming up this week:

Strikes start again in Iran – Wednesday

Oil climbed above $90 a barrel over the bank holiday weekend, after the US targeted rocket launchers on Larek Island to stop the Iranians from deploying mines in the Strait of Hormuz. Economic sanctions had been the preferred approach of the US over the last month but there’s been little success at getting Iran back to the negotiating table. Iranian leaders appear prepared to drag talks out until at least after the US midterm elections in November.

Prior to the latest strikes, traffic through Hormuz had increased 30% week-on-week. Expect it to fall back again this week if tensions can’t be de-escalated.

US microchip, semiconductor and cloud storage earnings – Tuesday to Thursday

Dell, Broadcom and Snowflake all release their latest earning reports this week. As they try to justify their current valuations, analysts will be expecting to see semiconductor and microchip demand mirroring data centre buildouts, and enough cloud spending to justify AI growth narratives.

Last week:

Jackson Hole Symposium 2026

The odds of a September Fed interest rate hike increased on Friday after Kevin Warsh’s clearer and more hawkish speech at the Jackson Hole Symposium in Wyoming.

Warsh made it clear that he sees inflation rates “as more concerning” than the state of the labour market. This week’s ADP payroll and official US unemployment data may also increase the odds of a hike if they match expectations.

Nvidia reports record-breaking revenue & ‘careless’ Meta settle in rapid time

US markets and tech stocks rallied last week following Nvidia’s latest earnings report.

The chip giant reported quarterly revenue of $96bn, double what it made in the same period in 2025. They expect revenue to increase to $108bn in Q3. Bullish as ever, CEO Jensen Huang said, “AI has reached its inflection point” and in relation to soon-to-be-listing AI firms “Investing in these companies are a once in a generation opportunity… The only regret that I have is that I didn’t invest more and sooner.” The share price did surge after the results but there was a -4.5% reversal on Friday as investors looked to take profits amidst renewed worries about Nvidia’s biggest customers, and Warsh’s tone on interest rates.

In other big tech news, Meta settled within just three days of their trial in California over allegations that Facebook and Instagram knowingly designed addictive features that were harmful to children’s mental health. They agreed to pay $18bn to settle the case before Mark Zuckerberg was due on the witness stand. They also committed to introduce new safeguards to make their platforms safer for young people. The share price rose in response, with investors relieved the settlement was way below the $200bn the states had sought.

Pubs and bars enjoy Burnham bounce

Here in the UK, a survey by multiple trade bodies, including the British Beer and Pub Association, suggest the hospitality industry is going through a “Burnham bounce”. Prime Minister Andy Burnham has positioned himself as an ally of the industry, announcing business rate discounts and producing lots of content featuring him pulling pints and DJing. Of those surveyed, those that feel the government will benefit the industry increased from 18% to 37%.

As expected, tax was cited as the biggest barrier for businesses as many in the industry continue to call on the government to cut VAT on hospitality from 20% to 10%. Nearly a quarter of UK pubs, bars and restaurants are currently losing money and one in six are thought to be at risk of going bust by July 2027. According to UKHospitality, 89,000 jobs have been lost in the sector since the last Budget.

Notice:

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 post Weekly Espresso appeared first on Copia Capital.

Tips for CIP outsourcing 1: Making sure you have formal governance in place

Gary Stirrup — Fri, 28 Aug 2026 10:32:26 +0000

Next week, we’ll be publishing CIPs in 2026: Tuning the Engine for Growth, the third edition of our Centralised Investment Proposition (CIP) research with the lang cat. This research, conducted in 2022, 2024 and 2026, looks at how advice firms are adapting their CIP to changing market and regulatory conditions.

The findings of the three reports highlight a clear move towards outsourcing. In 2022, 51% of firms ran portfolios in-house for the majority of clients, with 38% using outsourced MPS. By 2026, that has reversed, with 63% of firms now mostly outsourcing, compared with 23% running portfolios predominantly in-house.

Changing regulations, from MiFID II to Consumer Duty, have made running a CIP in-house at scale progressively harder, driving the shift to outsourcing. While outsourcing can reduce adviser administration and risk, there are still operational considerations.

In this series of blogs, we look at how to get the most out of outsourcing while staying on the right side of the regulator, sharing three tips:

Make sure you have formal governance in place
Hold providers to account
Think about the direction of travel

Across the series, we explain that outsourcing only delivers on its promise to improve your processes, your compliance position and your clients’ outcomes when it is managed properly. That means solid governance behind the initial decision, holding providers to account once the arrangement is in place, and a clear view of where the relationship needs to go as your firm grows.

Tips for CIP outsourcing 1: Making sure you have formal governance in place

Our first CIP report, The Centralised Investment Proposition: An Overheating Engine? in 2022 predicted that Consumer Duty, then newly introduced, would make it harder for firms to manage investments in-house, and that this would push more firms towards outsourcing. Our subsequent reports, An Overheating CIP 2024: Ways to cool the engine and CIPs in 2026: Tuning the Engine for Growth, have confirmed this. Monitoring and documenting investments have become harder when managing a CIP in-house, and 63% of firms now outsource at least some of their clients’ investments as a result.

In February 2025, the FCA sent providers a supervisory letter setting out a multi-firm review of MPS, looking at how firms are applying the Duty to give confidence that investors are receiving good outcomes. The regulator’s initial focus for this review has been on providers. In May 2026, it sent an information request to 40 wealth and asset managers asking how they construct, price and govern their Model Portfolio Services ranges, with findings due in early 2027. It isn’t certain the FCA’s scrutiny will extend to advice firms directly, but two areas are worth reviewing now regardless, documentation and monitoring, so formal governance holds up if regulatory attention does turn to the advice side.

The FCA has recently published a review into how firms approach products and services in relation to Consumer Duty more generally. Examples of good and bad practice it identified can be found here: Products and services: good practice and areas for improvement | FCA. It looks likely that the regulator will be expecting firms to place more focus on how they review management information (MI) and data to inform decisions related to their MPS providers.

Documentation

Written documentation of process is not optional when outsourcing. Under Consumer Duty, firms must be able to evidence that their decisions were made with delivering fair value to the client in mind. A formal documentation process protects the firm as much as the client.

The most important documents are the CIP policy and design, setting out the thinking behind the operation and how the strategy is implemented, and 87% of firms already have this in place. However, beyond that, documentation is uneven. Our research found that 66% of firms have a documented due diligence framework, 53% use an external research or ratings provider and only 35% have compliance-led oversight of their proposition.

These are all part of the same evidence base as the CIP policy itself, so it is worth checking they are properly documented. If it isn’t written down as part of a formal process, it doesn’t exist in the eyes of the regulator. Explaining a decision, such as choosing an MPS provider, without evidence of market-wide research will not satisfy the regulator.

Monitoring

Our 2026 research also found that 74% of firms run a formal monitoring process, but only 60% have an investment committee. More than half of advice firms are single-adviser businesses, where the investment committee, the adviser and the office manager are often the same person. A formal committee sitting round a table is unrealistic for many firms, but the structure is less important than the practice.

A formal committee does not have to mean a board with segmented roles covering every aspect of investment decision making within the CIP. It is about evidencing a considered approach to investment decisions, one that is monitored, adjusted and documented.

Outsourcing can help with this, but it does not happen automatically. For advisers who want a more engaged relationship with their DFM, a specialist solution such as custom MPS is worth considering.

Provider accountability

Documentation and monitoring should sit at the centre of any CIP arrangement. Outsourcing takes some of the investment weight off the adviser, but it doesn’t remove the need for the governance behind it. Providers carry some of that responsibility too, and in our next blog we look at what to expect from a provider once the arrangement is running, and what should trigger a closer look at the relationship.

Find out more about our investment services

If you’d like to speak to our team about how we can help your firm manage it’s CIP, call us during office hours Monday to Friday on 020 4599 6475, or email info@copia.co.uk.

The post Tips for CIP outsourcing 1: Making sure you have formal governance in place appeared first on Copia Capital.

Four strategic new hires to the Copia team

Ian Hooper — Fri, 28 Aug 2026 07:00:05 +0000

Since I joined Copia back in April, I have been working with the team to review our proposition which in turn should help you better support your clients.

I am delighted that we will be heading into September with four new additions to strengthen our Sales and Investment teams. This is a big step forward on our path to get the right expertise to meet our ambitious plans for the future.

Gary Stirrup joined us last month as our new Director of Sales. He brings a wealth of experience across platforms, asset management, advisory and discretionary. Three weeks ago, Jake Boylan joined Gary’s team as our new Business Development Manager. Jake has held BDM and Investment Product Manager roles at Octopus Investments and has already hit the ground running in his first few weeks with the business and will offer desk-based support to our clients. I’m also happy to confirm that Elliot Clifford, who some of you have met already, has officially moved over from Wealthtime to work as Copia’s dedicated Marketing Manager.

At the start of August, Andy O’Shea and Oliver O’Shea joined us from the Canterbury based advice firm, Pharon. Andy has managed Pharon’s investment proposition for 17 years. He will join Pete and Richard as our third Senior Portfolio Manager, adding a huge amount of investment knowledge and experience to our team. Oliver has worked with his father Andy for the last eight years and will continue to work very closely with him. His arrival adds further expertise to our analyst team. Andy and Oliver also share a similar investment approach to our existing Copia philosophy.

As we move forward and into 2027, we will continue to build out the team with strategic new hires when the right opportunities arise.

The post Four strategic new hires to the Copia team appeared first on Copia Capital.

Weekly Espresso

Peter Wasko — Mon, 24 Aug 2026 16:00:40 +0000

The infoshot to help kick-start your week

Coming up this week:

Nvidia Q2 earnings – Wednesday

The world’s largest company by market cap, Nvidia, will round off the summer’s tech and AI-related earning reports on Wednesday.

Analysts are expecting Nvidia to report a 96% year-on-year increase in revenue and more gains in Q2 than Q1.

Jackson Hole Economic Symposium

Following all the recent drama in bond markets, all eyes will be on US Federal Reserve Chair, Kevin Warsh, when he delivers his first keynote speech at the annual Jackson Hole Economic Symposium on Friday.

After sending confusing signals during his first press conference as Fed Chair in July, bond traders will be looking for Warsh to provide clearer details on how he plans to deal with inflation.

Last week:

K-shaped economy leads Walmart Woes

Last week’s CPI release by the Bureau of Labor Statistics showed annual US inflation cooled to 3.4% taking some pressure off the Federal Reserve to raise interest rates. The odds of a rate hike at the next meeting in September have fallen to 42%.

On the subject of the war, the 60-day ceasefire between the US and Iran has now expired. Negotiations showed few signs of progress last week. Trump threatened to bomb Oman if Omani officials agree a deal with Iran over the Strait of Hormuz. This week, the US government is set to lay out a programme of new sanctions against Iran it has dubbed “economic D-Day.” Iran have threatened an “earthquake-like” retaliation if they go ahead.

US debt hits $4tn as bond yields reach twenty year high

Last week, US national debt reached the $40tn milestone sooner than expected. Heavy spending under the Trump and Biden administrations, Trump’s tax cuts and spiralling interest costs have caused the debt level to more than double in just 10 years.

Serious concerns about the health of the US economy, the impact the rising cost of bonds could have on the debt-laden AI industry, and inflation sent yields on 30-year US treasuries to 5.34% on Tuesday, their highest level in 20 years. The Treasury Department announced on Wednesday that it will increase the next round of bond buybacks from $2bn to $4bn, helping to ease yields and bring them back down to 5.18%.

Trade talks between the US and Canada collapsed on Friday. A new 50% US tariff will be placed on a range of Canadian goods from 8 September 2026. Trump claimed Canada “wants the benefits of being a state without being one”. Canadian PM Mark Carney called the tariffs a “miscalculation” and said they are designed to “hurt and divide us”. Carney confirmed Canada would reluctantly match Trump’s tariffs “dollar-for-dollar”.

UK markets outperform but jobs situation remains worrying

Our home markets were some of the only to finish the week up as they outperformed major US, Asian and European markets thanks to a rebound in mining stocks and another rotation away from tech into more defensive and traditional assets.

There was less positive news concerning the UK jobs market. Unemployment stayed at 4.9% as vacancies fell to a five-year low. The Office for National Statistics (ONS) cited labour and operating costs as the main reason for smaller firms scaling back hiring.

According to recruitment specialist, Adzuna, UK graduate jobs have now tumbled to their lowest level since tracking began ten years ago. Only 8,373 roles for university leavers were advertised in July, that’s 45% less than this time last year, and a huge way off the 55,000 positions available in 2017. Teaching, travel and construction were the only sectors to add roles as more and more large employers hold back on hiring hoping that AI and automation will be able to fill the gaps.

Notice:

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 post Weekly Espresso appeared first on Copia Capital.

Cappuccino Commentary

Peter Wasko — Tue, 18 Aug 2026 09:31:09 +0000

July 2026 Review

July saw a real shift in investors’ focus across equity markets and regions. The month was marked by a sharp sell-off in technology and AI-related stocks. The sell off begun in Asian where semiconductor stocks tumbled over rising concerns about competition and the potential impact soaring RAM prices might have on the appetite for AI. Chinese firm, Moonshot AI, unveiled new models that narrow the performance gap with US systems at significantly lower costs. According to OpenRouter, Chinese models made up 46% of all token usage by US companies at the start of July, raising further question marks over the long-term prospects for American LLMs and the investments being made by big tech.

Investors have begun to question whether the capital expenditure that has been poured into this area of the market will ultimately pay off in terms of the revenue it is expected to generate. We’re starting to see hyperscalers move from being highly free cash flow positive to free cash flow negative as a result of continued and substantial investment in AI infrastructure. Research by Japanese finance newspaper, Nikkei Asia, also found that Meta, Oracle, Amazon, Microsoft and Alphabet have a combined $1.65tn in AI investment debt that they’ve been keeping off their official balance sheets. While technically not illegal, the worrying trend means these debts surpass their official balance sheet debts of $1.35tn. All of this meant that during the month, growth-oriented areas of the market sold off, while more traditional sectors such as financials and energy delivered strong returns as investors rotated into these areas.

The general shift in investors’ sentiment away from technology and AI benefited the UK market, which has greater exposure to traditional sectors such as banks, energy, mining and tobacco. The UK index delivered a positive return of 3.3%, while the US market declined by 1.6%. Other factors also contributed to market movements during the month, including the re-escalation of tensions between the US and Iran and investor uncertainty stemming from the lack of forward guidance from the Federal Reserve. Interest rates were kept on hold in the US, but this did not prevent bond yields from rising, with implications for long-term borrowing costs. Against the backdrop of concerns surrounding AI and technology stocks, Asian and Emerging Markets posted negative returns, while Europe and Japan were broadly flat. Across most regional equity markets, both at the sector and individual stock level, the month was characterised by a high degree of price volatility.

Taking South Korea as an example, the market has delivered exceptionally strong performance in recent months. However, it is heavily dominated by the semiconductor sector and, in particular, by two companies: SK Hynix and Samsung Electronics. As a result, the South Korean market experienced significant losses during the month, driven largely by the sell-off in these two stocks.

Bond markets were also negative over the month, with most government and corporate bond indices declining by around 1%. In the UK yields went up after Nigel Farage decided to resign and hold a by-election in his Clacton-on-Sea constituency. However, they fell again shortly after when Andy Burnham was nominated to be the next Labour party leader and PM. Counter to press expectations, Burnham named John Healey as Chancellor. Healey resigned as Defence Secretary in June in a row over military spending. UK defence stocks like Babcock and BAE surged on the news and the likelihood that Healey will increase defence spending from 2.7% to 3%.

US yields moved higher amid concerns about the lack of forward guidance from the Federal Reserve following its most recent policy meeting. Although interest rates were left unchanged, uncertainty surrounding the future path of monetary policy remained elevated. Emerging market debt was among the weakest-performing fixed income sectors, declining by 3.2%, primarily due to rising US bond yields. Meanwhile, oil prices rose sharply amid renewed geopolitical tensions in the Middle East, particularly between the US and Iran.

Overall, July was characterised by a significant shift in investor positioning and market leadership, accompanied by heightened volatility across several sectors and individual stocks, particularly those with exposure to AI-related themes.

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.

The post Cappuccino Commentary appeared first on Copia Capital.

Weekly Espresso

Peter Wasko — Mon, 17 Aug 2026 15:38:11 +0000

The infoshot to help kick-start your week

Coming up this week:

UK inflation and jobs data – Tuesday & Wednesday

Increases in gas and electric bills, caused by the conflict in Iran and the Ofgem cap increase, are expected to push inflation up to 2.9% when the Office for National Statistics (ONS) release the inflation data for July on Wednesday. The anticipated increase follows the Chief Economist for the Bank of England, Huw Pill’s comments last week that the 0.4% GDP expansion in Q2 reinforces the case for higher borrowing costs to bring inflation down.

The ONS will release the latest UK jobs report tomorrow. It’s widely expected to show slow private sector hiring with employers sticking to a cautious low hire, low fire model.

US retail earnings – Tuesday to Thursday

Some of America’s biggest retailers, including Home Depot, Lowe’s, Target and Walmart, release their Q2 earning reports this week. While high income household spending has been boosted by strong market performance, lower income households have seen their finances curtailed by rising gas prices and inflation. The latest retail reports will give another view on the health of US consumers and how K-shaped the US economy now is.

Last week:

US inflation cools but debt soars

On Wednesday, the Treasury Department reported that the US budget deficit soared to its highest monthly level in more than five years. July’s shortfall totalled $432.3 billion, with Medicare, social security, interest payments on national debt the largest contributors. Tariff refunds also added $33bn as the cost of rebates continues to add up.

In a busy week for the Treasury Department, they repealed the requirement for US companies to report beneficial ownership information (BOI). US companies will no longer have to report information about individuals who own a 25% stake or have “substantial control” over the business.

Treasury Secretary Scott Bessent said the repeal gets rid of “a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.” Democratic Senator Elizabeth Warren said the repeal was a “gift to cartels, criminals and US adversaries” and those who use “shell companies to move millions through our financial system.” The use of shell companies has been pivotal in the AI circular financing deals with data centre operations often set up under shell companies. It has allowed hyperscalers to offload risk and avoid recording the debt on official balance sheets. Expect the repeal to make this process even easier for US big tech.

Better than expected UK GDP growth

UK GDP rose 0.3% in June thanks to calmer energy prices, the World Cup and consistent sunshine. The better-than-expected growth has put us on course for the highest G7 growth in the first half of 2026. Alcohol makers, television producers and advertising firms also reported a World Cup boost.

However, Green Party thinktank Verdant updated their assessment of the heatwaves’ impact on the UK economy, estimating that the total cost of lost economic output was £4.4bn for June and July. If the intensity and frequency of heatwaves continue their current trajectory, Verdant suggest the annual economic cost could rise to more than £25bn by 2030.

Hong Kong tech index to nearly double

Hong Kong’s main tech index is planning to add 20 more companies taking the number of constituents to 50. The index is overhauling its tech themes to add AI and robotics as it tries to keep its representation up with the evolving tech landscape. Quantum computing, aerospace and satellite technology will also be added in the growing list of sub-themes. The changes are expected to come into place from the end of September. In the first half of 2026, IPOs listed in Hong Kong raised $21.5bn, more than double the same period in 2025.

Notice:

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 post Weekly Espresso appeared first on Copia Capital.

Weekly Espresso

Peter Wasko — Mon, 10 Aug 2026 15:02:26 +0000

The infoshot to help kick-start your week

Coming up this week:

UK GDP data – Thursday

The latest Office for National Statistics (ONS) data on UK GDP will be released on Thursday. The Q2 report is expected to show that the economy expanded at a slightly slower pace of 0.4% compared to 0.6% in Q1. Higher energy costs caused by the conflict in Iran are largely responsible for the slowdown.

US CPI data – Wednesday

Interest rate watchers will have a keen eye on this week’s US inflation data. Pressure on the US Federal Reserve to raise interest rates cooled last week when jobs data showed the US labour market was weakening. The education sector lost 50,000 jobs and retail fell 19,000. If this week’s data shows price growth has accelerated again, expect the Fed to be back under pressure to hike rates soon as they try to navigate an increasingly complex situation around inflation and employment.

Last week:

Best week for tech since April

US markets bounced back last week, with their leading tech index up nearly 5% – its best week since April.

Optimism around the potential reopening of the Strait of Hormuz boosted markets in general. An array of strong quarterly earnings reports bought back some confidence in potential big tech profit growth. The highlight being a 93% quarterly revenue increase at Palantir which saw the stock surge 29.5% at the beginning of the week.

However, not everyone is convinced. Famed Big Short investor, Michael Burry, said on Tuesday that “I continue to believe it is possible we are near a major top, and a 1987 type fall”. 1987’s Black Monday saw the US’s major index fall 20% in one day and caused worldwide losses of an estimated $1.71tn.

SpaceX crashes but lifts off again

Elon Musk’s SpaceX released their first earnings report since their IPO in June. Shares fell 9% Wednesday morning after investors baulked at their capex spending increasing more than six times to $18.3bn. Overall the firm made a loss of $2bn in the first six months of the year. The AI part of the business, where most of the capex is going, made a $1.2bn loss in the quarter.

However, the share price went through a two-day rally following the first post-IPO lock up expiration. Tradeable shares more than doubled but heavy insider selling failed to materialise last week. The rally sent the share price back to just below the initial IPO price for new investors.

Japan markets up, consumption tax cut plan approved

Japanese markets made gains last week following the joint US and Japanese intervention to support the yen. Despite concerns about the country’s strained finances, Prime Minister Sanae Takaichi’s plan to cut consumption tax on food was approved on Wednesday. The tax on food items will be slashed from 8% to 1% from April 2027. It’s the first time the tax has been lowered since it was introduced in 1989. The cut will incur a revenue shortfall of around 5tn yen ($31.7bn).

Notice:

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 post Weekly Espresso appeared first on Copia Capital.