Geopolitics, AI Leadership, and UK Markets (with Lizzy)

EM leadership even narrower than US, concentrated in chip stocks. AI story incredibly strong but cost pressures emerging for consumer stocks. UK M&A running at $43.5B this year as overseas companies find value. Yields volatile with political uncertainty, long-dated gilts attractive at mid-5% yields.

explicit

Oil

Metals

USD

Hargreaves Lansdown 4.2
Wealth Manager
Anna Macdonald 6.5

Geopolitics, AI Leadership, and UK Markets (with Lizzy)

ndx

The AI story itself is incredibly strong

1 calls

-4

no reliable edge (random outcomes)

8/20/2025 2:19:05 PM	short term cautious down	5 days later	+1.65%	-0.83%

rut

UK equities being sold down by pension funds, M&A activity suggests value but not strong domestic demand.

yields

Expect an awful lot of volatility even in the shorter, not short end, but five to ten years we will see those move around quite a lot

Would a US-Iran deal precipitate rotation away from AI leadership into EM and European equities?

Lizzy
Anna Macdonald

EM leadership is even narrower than elsewhere - without 5-6 big chip stocks, EM would be declining due to higher inflation. India still seeing sell-down.

AI story incredibly strong - Anthropic delivering phenomenal growth. You can have leadership in more than a couple of areas.
Anna Macdonald

Good management teams can navigate crises like Straits of Hormuz while grasping AI opportunities. Timing markets on geopolitics is harder than before.
UK being bought rather than buying - vote of confidence or warning sign?

Lizzy
Anna Macdonald

Feel sad seeing great British companies bought. M&A running at $43.5B this year vs $35B all of last year. Overseas companies finding value - they think it's cheap.

Pension funds continuing to sell down UK equities as part of move to US technology concentration.
Are yields just waiting to spike again if Andy Burnham wins the by-election?

Lizzy
Anna Macdonald

Yields have been running very high with UK yield premium. Clients buying very long end (2056, 2061) - yields to maturity mid-5% looking tempting.

Expect lots of volatility in 5-10 year yields. 16 days to by-election, 7% PM in 10-year would have been unthinkable.

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