Copia Capital

Volatility is back on the agenda

Tony Hicks — Tue, 21 Apr 2026 11:57:15 +0000

After a prolonged period in which strong equity returns largely masked underlying risks, conditions have become more unsettled in recent years. Conflicts, trade tensions and geopolitical uncertainty are refocusing attention on volatility, with advisers once again having frequent conversations with clients about market shocks, sequencing risk (selling investments to support income payments) and investing during falling markets.

And the situation shows little sign of improving. Valuations remain elevated in some parts of global equity markets and the current conflict in Iran has only made the economic outlook more uncertain. Wesleyan adviser research finds that 92% [1]expect investment markets will be more volatile in 2026, driven by uncertainty over the global economy and the rate of UK inflation as well as ongoing global conflicts and concerns about technology valuations, including AI companies.

Why now?

Of course, volatility isn’t a new problem for investors. However, the difference this time is that its resurfacing coincides with the Government encouraging broader retail participation in markets. More than four in five advisers (82%) believe this push to build a stronger retail investment culture will make client concerns around market volatility a bigger issue.

The majority of respondents (84%) believe the performance of their clients’ investments is under threat due to volatility next year, suggesting this new wave of less experienced investors will encounter market stress early in their investment journey. Policy momentum is driving greater participation in markets just as advisers expect conditions to become more unstable. Almost half of advisers (45%) expect between 20% and 40% of their clients to be put off investing in growth assets such as equities, or even dependable assets such as bonds and property.

Portfolio construction in volatile conditions

Wesleyan’s research highlights a range of strategies firms are using to help their clients navigate volatility. While six in ten (60%) plan to issue communications discussing what’s driving market movements, the potential outlook and what it may mean for clients’ financial goals, a sizeable group are also considering investment changes. Nearly half (48%) are seeking further diversification opportunities, such as commodities or private equity, and the same proportion (48%) said they will start or increase investments in a ‘smoothed’ fund.

Smoothed with-profits funds aim to provide a degree of downside protection during periods of market stress. They hold back some returns in stronger equity markets to help support returns when markets fall, reducing the impact of short-term volatility. This can offer greater stability for clients and help them avoid making reactive decisions during periods of market stress.

How Copia Select Smoothed is different

Copia Select Smoothed portfolios leverage the benefits of with-profits funds alongside complementary assets to give advisers a practical solution for clients who want to stay invested but are concerned about volatility.

Each risk-rated portfolio includes a 30% allocation to Wesleyan’s smoothed With Profits Fund, with the remaining 70% invested across a diversified mix of assets selected and overseen by Copia’s expert investment team.

This structure allows advisers to combine the stability created by the on-platform fund’s smoothing mechanism with the long-term growth potential of an actively managed multi-asset portfolio, while maintaining liquidity and transparency.

The approach can help mitigate sequencing risk, helping clients drawing an income or planning to do so in the near future. As the with-profits part of the portfolio reserves gains in strong markets to support payouts in weak years, investors are less likely to be forced to sell assets during market downturns to generate normal income. It can also be attractive to more cautious investors seeking multi-asset exposure with lower volatility than a traditional managed portfolio.

To maintain the potential for long-term growth, periods of heightened volatility require careful portfolio construction rather than wholesale withdrawal from equities and bonds. With advisers believing volatility will remain elevated at a time when more retail investors are expected to enter the market, solutions that help clients remain invested without exposing them fully to short-term market swings may become increasingly relevant. Blending smoothing with active portfolio management provides a pragmatic way for advisers to manage volatility while maintaining long-term investment discipline.

This article 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.

^[1] 2026 predicted to be a year of market volatility, Wesleyan, 29 January 2026

Want to find out more?

Watch our Senior Portfolio Manager, Pete Wasko discuss managing the Smoothed portfolios.

If you think our Smoothed portfolios might be suitable for some of your clients, call us on 020 4599 6475 or get in touch online.

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Weekly Espresso

Peter Wasko — Mon, 20 Apr 2026 14:15:06 +0000

The infoshot to help kick-start your week

Coming up this week:

Starmer addresses parliament about Mandelson vetting scandal – Monday

Prime Minister Sir Keir Starmer is set to address MPs this afternoon over the Peter Mandelson vetting scandal. Starmer is under pressure following the news that the Foreign Office overruled Mandelson’s vetting failure so he could become British Ambassador to the United States in December 2024. Starmer says he was not informed of the Foreign Office’s decision.

Despite calls from opposition leaders for Starmer to resign, reports suggest it’s unlikely Labour MPs will also call for his resignation. Investors will be keeping an eye on today’s statement to gauge how long-lasting and impactful the current political turmoil might be.

Kevin Warsh confirmation hearing – Tuesday

Kevin Warsh, Trump’s pick to succeed Jerome Powell as Chair of the Federal Reserve, will testify in front of the Senate Banking Committee tomorrow. His nomination must be approved by a majority of the committee before a full Senate vote.

Powell’s term is set to end on 15 May 2026. Last week, Trump threatened to fire Powell if he doesn’t step aside at the end of his term. Powell is planning to remain in his post until Warsh is confirmed in the Senate. Several Republicans have said they will block Warsh’s appointment until the criminal investigation into Powell over the renovation of the Federal Reserve office is dropped.

UK CPI (March) – Wednesday

On Wednesday, the Office for National Statistics (ONS) will release the latest Consumer Price Index (CPI) report. The data will provide an insight into the war in Iran’s impact on inflation here in the UK. The current forecast is for the annual CPI rate to increase from 3% to 3.3%.

Last week:

Positive week for markets as they ride the conflict wave

Broadly speaking, markets across the globe had a positive week following several optimistic updates about an end to the conflict in Iran, and the reopening of the Strait of Hormuz. On Wednesday, President Trump said the war was “close to over” and that during a call with President Xi, China was very happy that he was “permanently opening” the strait.

However, after being briefly reopened on Friday, the shipping route was shut again Saturday evening. The Islamic Revolutionary Guard Corps Navy (IRGCN) said it would stay closed until the US lifted its blockade on Iranian ports. Trump said the blockade will remain in place until a peace deal can be reached. Oil prices have risen in response to the closure. However, this morning Japanese markets haven’t fallen in tandem for a change as optimism around the AI sector has trumped concerns about the crisis in the Middle East.

A resolution still looks some way off. Iranian state media have reported that Iran are not planning to take part in another round of peace talks. Trump has again threatened to destroy power plants and bridges if a deal can’t be reached.

UK GDP better than expected

The latest GDP report from the Office for National Statistics (ONS) showed UK GDP increased 0.5% in February. That’s higher than the 0.1% forecast. January’s flatlining figure was also revised upwards to 0.1%. Strong performances in services and manufacturing contributed heavily to the growth.

In contrast, the International Monetary Fund (IMF) cut its growth prospects for the UK due to the knock-on effects of the Iran war. The IMF estimates that UK GDP will rise by just 0.8% this year, down from the previous forecast of 1.3%. The 0.5% cut is bigger than the downgrades for the other G7 countries.

Big US banks break records

Market volatility, and its subsequent increase in client trades, helped several major US banks post record-breaking profit numbers last week. Collectively, Bank of America, Morgan Stanley, Goldman Sachs, JP Morgan, Citi and Wells Fargo have taken in $47.4bn in profits in the first quarter of 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 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.

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Cappuccino Commentary

Peter Wasko — Wed, 15 Apr 2026 10:24:44 +0000

March 2026 Review

Over the past month, the escalation of the Middle East conflict has dominated global financial markets. On the last day of February, the US, in coordination with Israel, launched a series of airstrikes and military operations targeting Iranian government and military facilities, including the assassination of the Supreme Leader Ali Khamenei. Iran’s response was swift and included military retaliation across the region against Israel and several other Gulf states. As of the time of writing, there has not been a conclusive resolution to the conflict, and this has resulted in major disruptions to shipping through the Gulf and a sharp increase in energy prices.

Most asset classes were negatively impacted in March with the global equity markets bearing the brunt of volatility, although the selloff was relatively muted in comparison to moves experienced following Trump’s ‘Liberation Day’ tariff announcements a year ago.

Global equity markets fell- 6.3% over the period although regional returns varied. Countries and regions that are more exposed to energy exports from the Gulf were more negatively impacted given the spike in oil prices. This was evident when looking at returns for regions including Japan (-10.4%), Asia (-6.9%) and Europe (-9.2%). Conversely, the US market fared somewhat better (-5.5%) because the country is a net oil and gas exporter and benefitted from a rally in the US dollar.

While recent performance has been disappointing, it is worth noting that global equity returns have been relatively muted so far this year with many regions like the UK, Japan and Emerging Markets still in positive territory.

Most bond indices finished the period lower. Government bond yields moved higher (resulting in bond prices finishing lower) as concerns that the recent surge in oil prices would feed into higher inflation. This was particularly notable to us in the UK where expectations shifted from Bank of England interest rate cuts (prior to the Iran conflict) to 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 -3.8% over the month. Short- dated investment grade bonds also finished lower, although the drawdowns were more muted.

Most alternative asset classes also struggled, except for oil which recorded its largest monthly gain on record. Precious metal saw a sharp reversal from record highs, and we saw some weakness across other asset classes such as infrastructure and property given the heightened geopolitical uncertainty.

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, it’s important to avoid making kneejerk decisions and instead focus on diversification to help weather any 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.

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Weekly Espresso

Richard Warne — Mon, 13 Apr 2026 13:51:19 +0000

The infoshot to help kick-start your week

Gains halted by blockade announcement

When markets reopened after Easter, the conflict in Iran was inevitably top of the agenda. On Tuesday, President Trump threatened “A whole civilisation will die tonight” if a deal to reopen the Strait of Hormuz couldn’t be reached by his 8pm deadline. Thankfully, Trump backed down and agreed to a two-week ceasefire.

Markets responded well to the news, sending US and European markets up, and pushing Japanese indexes up around 7% week on week. Due to their reliance on oil exports that come via the Middle East, Japan is particularly affected by Hormuz’s closure. Last week, Prime Minister Sanae Takaichi announced another 20 days’ worth of oil from their national reserves will be released in May. On Tuesday, the Executive Director of the International Energy Agency (IEA), Fatih Birol, said the impact of the current crisis on the oil market is “more serious than the ones in 1973, 1979 and 2022 together”.

Over the weekend, Vice President JD Vance led US peace talks with Iran. No agreement could be reached following twenty hours of negotiations. In response, Trump has announced that the US navy will start blockading the Strait of Hormuz from 2pm today. Around 100 tankers have gone through the Strait since the conflict started, paying Iran up to $2mn each time. A US blockade would mean no ships could pass through the Strait. Oil prices have surged on the back of the news, with Brent and Crude going above $100 dollars a barrel again. So far today, European and Asian markets have fallen in response, and US futures are trending downwards.

US CPI and GDP numbers

Seven weeks into the war in Iran, we’re starting to see its impact on US inflation. On Friday, the US Bureau of Labour Statistics (BLS) released the Consumer Price Index (CPI) data for March. The energy part of the index rose 10.9% in March. Gasoline increased 21.2% over the month, its largest monthly increase since the CPI was first published in 1967. Fuel oil increased 30.7%, its biggest monthly jump in 26 years. Overall, the energy index has increased 12.5% over the last twelve months.

US economic growth slowed more than expected in Q4 2025. The latest release from the Bureau of Economic Analysis (BEA) showed GDP rose just 0.5%, down from the 0.7% forecast and a big drop off from the 4.4% growth seen in Q3. According to the BEA, increases in consumer spending and investment were offset by decreases in government spending and exports.

Coming up this week

Big US banks release earnings – Monday to Wednesday

Major US banks including Goldman Sachs, JP Morgan, Citigroup and Bank of America all release their Q1 earning reports this week. Their results may give more information about how the ongoing conflict in Iran is impacting the US economy. Following last week’s high inflation numbers, investors will be watching for changes in trading activity and what mergers and acquisitions are being lined up or postponed. They’ll also have an eye on any results related to the banks’ private credit arms due to concerns around weak lending standards and the AI investment boom.

US PPI (March) – Tuesday

Following last week’s CPI data, the US BLS will publish the latest Producer Price Index (PPI) tomorrow. Whereas the CPI measures inflation from the consumer’s perspective, the PPI measures it based on the money received by domestic producers and sellers. The current forecast is for the index to rise from 3.4% to 4.6%.

UK GDP – Thursday

The latest GDP figures from the Office for National Statistics (ONS) are set to be released on Thursday. Last time around, the ONS numbers showed the UK economy unexpectedly flatlined to 0% growth in January. With analysts expecting growth of 0.2%, we saw the pound fall and bond yields rise on the back of it. Forecasters are expecting 0.1% growth this time around.

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.

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Investing in an uncertain world with the help of the Copia Risk Barometer

Angus Dandie — Thu, 09 Apr 2026 09:59:18 +0000

In fast‑moving financial markets, having a disciplined approach to managing risk is essential. Here at Copia we use a range of quantitative and qualitative tools to help guide portfolio decisions. One of the most important of these is our Risk Barometer; a structured, data‑driven indicator designed to help us assess fundamental market conditions and adjust equity exposure accordingly.

The Risk Barometer is not a black‑box model, nor does it replace the experience and judgement of our portfolio managers. Instead, it provides an easy‑to‑interpret score that helps inform how much equity risk we take on relative to each client’s Strategic Asset Allocation (SAA). Its core purpose is simple: help protect portfolios from more significant losses during periods of market stress, while allowing us to maintain appropriate levels of risk when conditions are supportive.

A Clear Pulse Check on Market Conditions

The Risk Barometer produces a score between –1% and +1%. Although the output is easy to follow, it is built from a thoughtful assessment of global market behaviour. The tool looks across three major areas, namely equities, sovereign debt, and credit, to capture a broad picture of financial conditions.

The largest input comes from the equity component, driving 60% of the reading, which analyses a diversified universe of global exchange‑traded funds. By looking at both long and short‑term market trends, it helps us understand whether equities are broadly gaining momentum or showing signs of strain.

Sovereign debt markets, making up 20% of the score, tell us something about the economic environment. When government bond yield curves invert, meaning shorter‑term yields rise above longer‑term ones, it has historically pointed to slower economic growth ahead.

The final component, credit markets, offer insight into corporate health. Rising credit default swap spreads often reflect rising concern about company balance sheets, and therefore greater overall financial stress.

Bringing these components together gives us a well‑rounded perspective on market dynamics that is grounded in observable data rather than subjective interpretation.

From Signal to Action: What the Score Means for Portfolios

While the Risk Barometer does not dictate specific trades, it helps determine the appropriate level of equity exposure at different points in the market cycle. To keep things intuitive, the score places market conditions into one of three zones:

Green, where markets appear healthy and portfolios are positioned to maximise equity allocation within the ranges of the SAA.
Amber, where caution is appropriate and equity exposure is shifted to a neutral allocation.
Red, where conditions look more fragile and risks are scaled back to the bottom of their ranges.

This “brake and double‑brake” framework gives clients confidence that portfolios will not remain heavily exposed to equity market risk during times of rising fundamental financial stress. Conversely, it ensures we remain invested, and do not de‑risk too early when conditions are more supportive.

In the current geo-political and investment landscape where uncertainty is a constant, the Risk Barometer provides a clear, data‑driven assessment of underlying market conditions and helps us adjust equity exposure in a measured and transparent way. Its strength lies not in predicting the future, but in supporting better decisions, particularly when markets become difficult.

The Risk Barometer has become a fundamental part of how we deliver long‑term and risk‑aware investment outcomes. For clients, this means their portfolios are better prepared for turbulent periods, while still positioned to benefit when conditions improve.

Want to find out more?

Angus and the team update the Risk Barometer at the end of every month, you can check the latest reading here.

If you’d like to find out more about how our tools and services can help you and your clients, send us a message or call 020 4599 6475.

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Weekly Espresso

Peter Wasko — Tue, 07 Apr 2026 11:06:36 +0000

The infoshot to help kick-start your week

Markets bounce into week six of the war

Last Monday, President Trump sent US markets down after he threatened to “obliterate” Iran’s power stations and water plants if they didn’t “shortly” agree to peace terms. Optimism that Trump was trying to wind down the war gave markets a lift on Tuesday and Wednesday, with the S&P 500 ultimately soaring 6% and ending a five-week losing streak. Trump’s prime time address on Wednesday evening failed to reassure investors and markets took a hit when they opened on Thursday. However, by the close of play, US indexes recovered and finished just below Wednesday’s peak as we went into the Easter weekend.

Six weeks into the war, as last week demonstrates, the conflict and Trump’s rhetoric continue to mould global markets. With the Iranians only allowing a limited number of ships through the Strait of Hormuz, oil and gas have hit a four-year high and fertiliser prices are up 30% in the US. Global shipping operations have started relying more on alternative routes, including Cape diversions and Red Sea corridors. Maritime operations are having to face up to the fact that, even if the conflict ends in the near future, Hormuz’s commercial shipping activities will not go back to normal anytime soon.

On Easter Sunday, Trump took to Truth Social to repeat his threats to destroy Iranian infrastructure. He set a new deadline for 8pm today to reopen the Strait of Hormuz and has since said he “is not at all” worried about his potential actions being considered war crimes. S&P futures held up despite Trump’s violent language, and Asian and European markets are up slightly this morning. The chances of a solution being reached by 8pm look low. This is the fifth deadline Trump has given the Iranians since the war started. According to the US Human Rights Activist News Agency (HRANA), 3,540 people have been killed in Iran so far, including 1,616 civilians.

Blue Owl caps withdrawals as private credit worries grow

On Friday, private credit investment firm, Blue Owl Capital, imposed a 5% quarterly cap on investor withdrawals as they try to deal with a surge in redemption requests. Filings released on Thursday showed between January and March, investors asked to withdraw 21.9% from their Credit Income Corp fund and 40.7% from their tech lending fund, Blue Owl Technology Income Corp.

The surge comes after growing concerns over weak lending standards in the private credit industry and worries about its AI spending boom exposure. Other private credit firms like Ares Management, Apollo Global, Blackstone and the private credit arms of banks like Morgan Stanley, J.P. Morgan and Goldman Sachs have also placed caps on redemptions in recent months.

OpenAI closes record-breaking funding round

OpenAI closed its latest funding round on Tuesday, raising a record-breaking $122bn of committed capital, leaving the company valued at $852bn. Despite ChatGPT having more than 900 million weekly users the company is a long way off being profitable. OpenAI made $13.1bn in revenue last year. They said on Tuesday that they’re currently generating $2bn in revenue a month in 2026. Veteran investor and hedge fund founder, George Noble, recently estimated that OpenAI needs to generate an annual revenue of $200bn by 2030 to meet their spending projections. OpenAI has started cutting spending plans and closing unprofitable features like the AI video app Sora as they gear up for their likely IPO later this year.

Trump appointed the CEOs of various tech giants to the President’s Council of Advisers on Science and Technology. Meta’s Mark Zuckerberg, Nvidia’s Jensen Huang and Oracle’s Larry Ellison, were all included in the initial batch of 13 members. The council will help lead the US’s strategic plans in the ongoing AI race with China.

Ellison’s Oracle laid off 30,000 employees across the globe on Wednesday. Despite revenues increasing 22% in the last quarter, Oracle decided to cut 18% of their workforce to help fund more AI infrastructure projects. The firm raised $50bn in debt and equity in January, and analysts estimate the layoffs could free up a further $10bn in free cash.

Coming Up:

Fed meeting minutes, Wednesday 8 April 2026
US GDP (Q4), Thursday 9 April 2026
UK CPI (March), Friday 10 April 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.

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Weekly Espresso

Peter Wasko — Mon, 30 Mar 2026 13:21:32 +0000

The infoshot to help kick-start your week

Muddled messages lead to another mixed week for oil prices and markets

Oil prices fell on Monday after President Trump postponed his threatened attack on Iranian power plants. Similar to what we saw during “Liberation Day” tariff U-turns last year, there was a flurry of unusual activity on oil and S&P futures before Trump announced the postponement. The number of bets on crude and brent oil contracts effectively increased threefold exactly ten minutes before the announcement sparking fresh speculation about insider trading.

As the week progressed, Iran dismissed the US’s 15-point peace plan and proposed legislation to collect tolls from ships that want to travel through the Strait of Hormuz. According to International Maritime Organisation Secretary-General, Arsenio Dominguez, there are nearly 2,000 ships currently waiting to sail through the strait.

3,500 US marines and sailors arrived in the Middle East aboard the USS Tripoli this weekend, joining the roughly 50,000 troops already stationed in the region. The USS Tripoli is an amphibious assault ship, and unlike standard aircraft carriers, its primary role is to put troops and combat vehicles onto land. Last night in an interview with the FT, Trump said, “my favourite thing is to take the oil in Iran” and suggested that US forces could be used to seize the export hub on Kharg Island. Following Trump’s comments, brent crude oil has surged to $115 a barrel.

With $120 oil prices now a real possibility, South Korean politicians have said they may extend their five-day rotating public sector car ban to also include private cars. Earlier in the week, Japan released 80mn barrels of oil from their reserves, the equivalent to 45 days of domestic demand, and 1.8 times more than the amount released after the Fukushima nuclear power plant disaster in 2011.

Pre-war UK inflation stays at 3%

The latest Consumer Price Index (CPI) numbers from the Office for National Statistics (ONS) showed UK inflation stayed at 3% during February. Last week’s release marks the final data from before the war in Iran and many economists now expect the next reading to rise following the shock to energy prices caused by the conflict.

From careless to callous – landmark lawsuits send Meta and Alphabet shares tumbling

Shares in Meta and Alphabet fell 13% and 9% respectively following their defeats in a landmark social media addiction trial.

The case was tried in Los Angeles. A woman known as “Kaley”, sued both firms over her childhood addiction to social media. The jurors decided that she should receive $3mn in compensation and charged Meta and Google (through their ownership of YouTube) an additional $3mn in punitive charges because they “acted with malice, oppression or fraud” when operating their platforms. A day earlier, Meta was also found liable by a jury in New Mexico for the way its platform endangers children and exposes them to sexually explicit material and sexual predators. Both these decisions could have serious implications for hundreds of similar cases that are going through US courts at the moment.

In another blow to social media firms, here in the UK, Sir Kier Starmer backed banning addictive social media features. He said the government was “going to have to act” to stop algorithms from hooking in young people and children.

On top of the Meta and Alphabet selloffs, the NASDAQ suffered its fifth consecutive downwards week as the war in Iran continues to weigh heavily on US tech stocks.

On the AI side of tech news, Wednesday saw OpenAI shut down the AI video-generation app Sora and end its $1bn content partnership with Disney. Since its launch two years ago, Sora had an estimated daily inference cost of $15mn and made just $2.1mn in total lifetime revenue. The deal between OpenAI and Disney was only signed in December.

Coming Up:

Fed Chair Powell speaks, Monday 30 March 2026
China manufacturing PMI, Tuesday 31 March 2026
UK GDP, Tuesday 31 March 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.

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Weekly Espresso

Peter Wasko — Mon, 23 Mar 2026 14:50:07 +0000

The infoshot to help kick-start your week

Interest rates held in US, UK, Europe and Japan

The Federal Reserve, Bank of England (BoE), European Central Bank (ECB) and the Bank of Japan (BoJ) all voted to keep interest rates unchanged last week.

Fed board members now expect US inflation to reach 2.7% by the end of the year, up from December’s prediction of 2.4%. Regarding the impact of the war in Iran, Fed Chairman, Jerome Powell, cautioned “We just don’t know what the effects” will be. He went on to express his concern that we haven’t yet seen the last of the price rises from Trump’s tariffs. On the unemployment outlook he said he “was not really comfortable with the balance” created by the admin’s crackdown on immigration and its reduction of the overall size of the workforce. He also pledged to not leave the bank until the criminal investigation of him by the Department of Justice (DoJ) is resolved.

Here in the UK, the BoE held rates and warned the “shock to the economy” from the war could push inflation as high as 3.5% by the summer. The Bank’s Deputy Governor, Sarah Breeden said she “would have expected to vote for a cut again in March” if the war in Iran had not started. In a stark turnaround, markets are now forecasting up to four interest rate hikes this year. However, the Bank’s Governor, Andrew Bailey, did caution those predicting rate increases against “reaching any strong conclusions.”

In Frankfurt, the ECB said they were watching closely and ready to act if rising oil prices started impacting growth and inflation. The duration of the conflict was top of their concerns, adding, “A prolonged disruption in the supply of oil and gas would result in inflation being above, and growth being below, the baseline projections.” Over in Tokyo, BoJ Governor, Kazuo Ueda, said “the governments’ stimulus measures will likely underpin the economy” and that before the conflict, “household and corporate activity had been firm.”

Mixed messaging on conflict leads to another volatile week in markets

On Monday, US allies had to react to Trump’s call for them to help protect and reopen the Strait of Hormuz. President Trump pleaded, “They should come and they should help us protect it. You could make the case that maybe we shouldn’t even be there at all, because we don’t need it. We have a lot of oil. We’re the number one producer anywhere in the world times two.” So far, his calls for help have gone unanswered.

The next day, the Director of the US Counterterrorism Center, Joe Kent, resigned over the reasons for starting the conflict and urged Trump to “reverse course”. His words seemed to fall on deaf ears with the Pentagon sending another 2,500 marines to the region and the White House calling for another $200bn to fund the war effort because according to US Defence Secretary, Pete Hegseth, “It takes money to kill bad guys”.

Gas prices shot up 23% on Thursday after Israeli air strikes hit the South Pars gas field. In retaliation, Iran stepped up their attacks on energy facilities across the Middle East. The attacks on Qatari sites infuriated Trump, leading him to threaten to “massively blow up” the world’s largest gas field. 20% of global liquefied natural gas is produced at the South Pars facility.

This weekend, Trump’s rhetoric sparked another market selloff after he threatened to strike Iranian power plants. While writing this morning, Trump has postponed any airstrikes on power plants and energy infrastructure for a five-day period depending on the “success” of “meetings and discussions”. Markets have reacted positively to the news and in the UK, the FTSE 100 has gone from being 2% down earlier to 0.95% up now.

WTO warns conflict could “crimp” AI boom and Reeves announces “Quantum Leap” package

In the world of tech, the World Trade Organisation’s (WTO), Chief Economist, Robert Staiger, warned high oil prices could “crimp” the AI boom, saying “There is an interesting possible interaction between the Middle East conflict and the AI boom, in part because the boom is very energy-intensive” and “If the price of energy continues to be elevated for the whole year, that could put a crimp on the AI boom”. According to WTO calculations, 70% of all investment growth in North America during the first three quarters of last year can be attributed to AI-related goods.

Chancellor Rachel Reeves and the Technology Secretary, Liz Kendall, unveiled the £2bn “Quantum Leap” package of measures to help the UK become the first country to roll out quantum computers at scale by the early 2030s. By utilising the theories of quantum mechanics, quantum computers use qubits instead of bits (aka zeros and ones) to process thousands of data points at once and dramatically speed up the process for finding solutions to certain problems. The government estimates success in quantum computing could add another £200bn to the UK economy by 2045.

Coming Up:

S&P global manufacturing and services PMI, Tuesday 24 March 2026
UK CPI, Wednesday 25 March 2026
US initial jobless claims, Thursday 26 March 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.

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What the situation in Iran tells us about navigating market volatility

Richard Warne — Wed, 18 Mar 2026 15:12:23 +0000

The ongoing situation in Iran has created a new wave of uncertainty for investors. One notable feature of the conflict has been the sheer volume of information being released, which has the potential to shift markets in the short term. History suggests that trying to time markets during periods of volatility is rarely a reliable strategy.

In many ways, the situation in Iran represents a concentrated example of the current trading landscape in which volatility should be anticipated. We’ve seen increasingly frequent instances of instability over the past couple of years, largely driven by geopolitical friction.

Investing during conflicts and instability ultimately requires a well-considered strategy. Looking at both current developments and past events suggests that investors who focus on the broader economic and market picture are generally better positioned to navigate volatility.

The question marks around Iran

There are several aspects of the current conflict that differ from previous military action involving Iran. Rhetoric from the Trump administration has implied the possibility of an extended engagement. The situation remains highly uncertain, but market reaction so far has seen most major indices experience short-term declines.

The impact on oil is most closely watched, with the price of Brent crude moving above $100 for the first time in four years.[1] Iran has been targeting energy and civilian infrastructure in neighbouring Gulf states and limited passage through the Strait of Hormuz, a key global supply route.

Disruption in this area has clear implications for energy prices and inflation. Markets have already reduced expectations for future interest rate cuts.[2] To date, economies most dependent on energy imports have experienced the greatest market stress.

It’s worth noting that we’re yet to reach the market declines seen during previous periods of volatility, including the Liberation Day sell-off. However, even if the current conflict is resolved relatively quickly, several potentially disruptive elements remain, including US tariff policy and concerns around valuations in parts of the technology sector. Investment strategies need to take account of these ongoing risks.

Investing during volatile conditions and conflicts

When investing, the primary focus should remain on company fundamentals, economic conditions and the narratives shaping markets. Periods of conflict should not change this principle. However, uncertainty naturally increases during political crises and the news cycle can amplify short-term reactions in markets.

Markets tend to be sensitive to uncertainty, which can prompt rises in behaviours like profit taking, short-term risk reduction or increased demand for perceived safe havens. This activity can impact short-term equity valuations.

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.

Geopolitical volatility does not necessarily change the long-term investment case for diversified portfolios. Investors who maintain exposure to a range of assets aligned to compelling economic themes are typically better positioned to recover from periods of disruption.

This does not mean conflicts or volatility should be ignored. However, investors should avoid becoming overly influenced by the volume of information surrounding these events.

The road ahead and defensive strategies

Given that volatility has become a persistent feature, it’s important to consider portfolio options that can help manage downside risk. Regional and asset diversification played an important role over the last year as some investors found compelling opportunities in domestically orientated small- and mid-cap indices outside the US. This reflects that parts of the US market remain expensive and present a high level of concentration risk, providing little protection from market falls.

Another approach is to employ strategies designed to moderate short-term market swings. Smoothed funds are one example; these products typically hold back a portion of profits during strong markets, which can then be used to support returns during market downturns. While they do not eliminate investment risk, the smoothing mechanism can help reduce the scale of short-term fluctuations in portfolio values.

Several uncertainties remain around Iran and the broader geopolitical environment. Even if the conflict resolves quickly, the economic and market consequences may take time to fully materialise. Investment strategies that recognise the potential for continued volatility are better positioned to navigate both the current situation and future market disruptions.

1] Oil prices soar past $100 a barrel as war escalates in Iran

[2] Investors reverse bets on central bank rate cuts as oil crisis deepens

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Weekly Espresso

Peter Wasko — Mon, 16 Mar 2026 15:58:53 +0000

The infoshot to help kick-start your week

Attempts to contain oil prices lead to more marginal market losses

Various attempts to try and counter rising oil prices helped keep the price of oil below $100 a barrel in the early stages of last week. On Monday, South Korea and Thailand said they would set limits on fuel prices. All 32 members of the International Energy Agency (IEA) agreed to release a record 400 million barrels of oil from their emergency reserves. Despite this being more than double the amount released in 2022 following Russia’s invasion of Ukraine, it still only constitutes two weeks’ worth of what would normally pass through the Strait of Hormuz.

Saudi Arabia’s state oil firm, Aramco, warned of “catastrophic consequences” for oil markets if Hormuz remains blocked. This weekend, President Trump called on his allies to help “take care of that passage” and warned that Nato faces a “very bad” future if its members fail to assist. So far, none of the world’s leading economies have committed to supporting the US in the Strait. The UK is considering sending aerial minesweepers to help clear the waterway of mines.

The Centre for Research on Energy and Clean Air (CREA) estimated last week that Russian oil, gas and coal sales have so far climbed by more than 10% in March. On Friday, Trump eased some sanctions on countries buying Russian oil. Allowing Russia to sell more oil is unlikely to have much impact on oil price pressures. Russia claims to have 100 million barrels of oil at sea which is less than a single day’s global demand for oil (104 million barrels). With Hormuz still effectively shut and the Iranian military vowing to “not allow a single litre of oil to transit”, oil prices have gone back above $100 a barrel today.

The downward effect of the conflict on markets was less dramatic than the week before. Expect inflations fears to dominate the notes from this week’s Fed and Bank of England (BoE) interest rate meetings.

GDP data from UK, US and Japan

The latest figures from the Office for National Statistics (ONS) showed the UK economy unexpectedly flatlined to 0% growth in January. Lower than many analysts’ expectations of 0.2% growth, the pound fell against the dollar and UK bond yields rose on the news. With UK unemployment at a five-year high, the ONS attributed the fall in employment activities as the largest negative contributor to January’s GDP numbers.

Across the pond, the latest release from Bureau of Economic Analysis (BEA) showed US GDP grew by 0.7% in the fourth quarter of 2025. 0.7% is well below the previous estimate of 1.4% and the Dow Jones forecast of 1.5%. According to the BEA, less services spending, particularly in healthcare, caused the largest downward drag on the GDP numbers.

Japan’s GDP growth for the fourth quarter of 2025 was revised to 1.3% marking a strong turnaround from Q3’s -2.6% contraction. Strong business spending and private consumption were behind the bounce back. So far, rising oil prices have had a limited impact on inflation due to the abolishment of the provisional gasoline tax rate at the end of last year, and government subsidies to petrol companies to help stabilise prices.

Chinese markets buoyed by OpenClaw popularity

Chinese markets saw a bit of a boost last week as investors reacted to the surging popularity of OpenClaw in the country and the potential to monetise returns from its AI software. Many of China’s biggest cloud providers like Alibaba Cloud and Baidu, have all started incorporating OpenClaw’s AI agents and floods of startups have released their own “Claw” frameworks. OpenClaw’s software aligns well with China’s embrace of open-source AI technology and with subscriptions rising, some investors are excited that it might represent a way forward for generating actual revenue from AI software.

On Wednesday, Meta bought the AI social media network, Moltbook for an undisclosed price as they continue competing with the likes of OpenAI and Google to secure more partnerships with leading AI startups.

Coming Up:

Fed interest rate decision, Wednesday 18 March 2026
Bank of Japan (BoJ) interest rate decision, Thursday 19 March 2026
Bank of England (BoE) interest rate decision, Thursday 19 March 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.

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