Finance News Explained: Nvidia’s $4T Milestone, Trump’s Copper Tariff Shock & Goldman’s Bullish View

Hello and welcome back to the Market Maker podcast, and we've got lots of things to discuss that have happened in global financial markets in the last few days. From Goldman Sachs strategists raising their outlook for US stocks for the second time in just 2 months. So what's their rationale there? And I think they've done it 4 times perhaps since the start of the year. So how frequent is that? Is that normal? How reliable is that? We'll look to answer. Then we've had the likes of BlackRock and Schroders buying gilts during a market slump. And this is that big asset managers adding to holdings in a bet that the sell-off sparked by doubts over the Chancellor, Rachel Reeves, you might have seen her crying in Parliament very recently. They were betting against what a lot of the mainstream media was saying, which was calling for her head. They were thinking, right, actually we think this is just short-term volatility and a good opportunity to add to their positions. So look to understand that a bit more. Can't go an episode without mentioning Piers being a new fanboy actually of Trump going off recent episodes, which is the latest bout of volatility and this time in industrial metals, specifically copper prices. You might have seen they are in the headlines because Trump announced a 50% tariff on copper imports causing a record spike in New York copper futures and also to wrap into the Trump thing. We've been talking a lot about debt ceiling, the big beautiful bill. So a bit of an update there, and we are going to tackle some jargon like CDSs, credit default swaps, and some movement we've had there. Fear not, we'll explain it as in simple terms as we can. And then finally, Nvidia, they've become the first ever company to hit $4 trillion. $1 trillion in market cap. And so, yeah, I mean, what a turnaround that has been. We touched on this briefly last episode, but we'll have a look at that as well. So Piers, maybe to kick off then and to kind of, I guess, wrap it all into one piece, the Goldman's view on lifting US stocks, like what's that all about?

Yeah, I mean, they, you know, well, so all these big banks, obviously they have analysts that are covering different things. And so you have your macro analysts that are looking at US stocks, for example, and looking at stock index. And one of the outputs of their models is trying to predict, right, what's going to be, where is the S&P 500 going to be by year end, or where's the S&P 500 going to be in 12 months' time? Okay. And their models have inputs, which is a whole bunch of macro stuff, economic data points, sentiment, you know, all this stuff feeding in and it outputs right in there. So David Kostin, he's the kind of head guy at Goldman's kind of covering, you know, US stocks. And he's been bullish, he's been upgrading a couple of times already this year. The latest one's just come in and he's lifted the 12-month forecast. So that's like to midpoint of 2026. He now predicts 6,900 on the S&P 500. It's a decent uptick. His previous forecast was 6,500. Remember that the index like right now is trading at 6,250. So these numbers like 6,000, well, his last one, 6,500. I mean, it's less than 5% above where we're trading now, right? So, you know, given the extraordinary rally we've seen, and we'll talk, I can throw a few stats at you in a minute. The speed of that has made these year-end, particularly the year-end targets look a bit stupid because his year-end target was 6,100. So we've smashed through that in style. So he's lifted that now to 6,600. So yeah, you know, he's expecting this rally to continue and I guess, well, why is he expecting that to continue? And look, there's obviously the macro side. So actually after we recorded last week, we had the payrolls data. So that's the US nonfarm payrolls data for the month of June, which came in pretty strong, came in at 147,000 jobs created in that month, which was quite a bit better than expected. And continuing to show a solid resilient labor market. And obviously that's a good factor from that sort of those fears from earlier in the year. Which partly, you know, obviously Trump's tariff triggered the big sell-off back in April, but it was in amongst concerns around the sustainability of economic growth, in amongst concerns around, you know, inflationary pressures, meaning the Fed can't cut and all this kind of stuff. But whilst the tariff risk has gone away mostly, we'll talk about copper in a second, but you know, good solid data. Means this is good news, right? From a stock market point of view. And so I think this is helping with Goldman to reduce recession expectations and therefore increase their kind of stock market targets. So look, and also the S&P, as I said, it's just been on an absolute flyer. We talked about this. I'm going to give you an update. We've thrown stats at you every week as this rally's been going on. It's by every week, it's like, what? It's gone again. We're now 30% up. From the April 7th low, which is kind of making this actually the second fastest recovery from a bear market in the history of mankind for the S&P 500. So it took 1.6 months.

What was number one then?

Well, yeah, it's interesting. The most rapid was 1.1 months. Any guesses? When that might have happened?

It's got to be something where it's like either COVID or the GFC, or probably COVID would've been the bazooka beyond all bazookas.

Spot on. So February 2020, the market hit bear market territory, but it was back to new highs by mid-March. So 1.1 months. That was the most rapid, but this one, you know, yeah, point being, it's just kind of right, obviously. Extraordinary scenes with regards to the speed of the recovery.

Can I just ask then, so I'm looking at this chart, which is mapping all of the 2025 S&P 500 views from Goldman Sachs. Interestingly, the dotted lines at the top show that their initial year-end target, so I'm assuming this was issued in December of 2024 about what does the year ahead look like with 6,500. The current year-end target, 6,600. So there might be people listening going, what is the point of these targets when basically they're exactly where they were 6 and a bit months ago and you've had all this movement? So what do these targets serve?

Yeah.

What's their purpose?

Look, I don't think it's quite this chart. I don't think it's quite fair to kind of look back like this. And just laugh because, oh my God, how stupid are they? They got it so wrong. I think at any moment in time, it's really a reflection of sentiment. And at that moment in time, that's really important because sentiment drives markets. So in the moment, it's these calls and these year-end target updates and stuff I think are are important. Look, don't forget these banks are trying to, this is a revenue stream for them as well, right? They're selling research to buy-side institutions. And so, you know, obviously someone like Goldman Sachs is going to have a very strong client base for purchasing that research. And so they are sending out periodic, quarterly is obviously a perfect time to write, let's hit our buy-side clients with a fresh update, which, and let's raise some more revenue by charging them money for that. So obviously they've got to do it in this cycle of quarterly, and so they have to update based on their models. So, but I think it's, you know, it's a good indicator of where we're at from a sentiment perspective. And where we're at at the moment is no one believes Trump in terms of tariff risk. And so, you know, what are we left with? And we're left with, you know, pretty solid. And I'll say we're left with a roaring tech sector where, you know, big boys are right at the front of this kind of juggernaut that's taken this market back to a new all-time high.

And this is so interesting, right? Because I remember, what, 2 months ago, probably not long ago, the point being everyone was flashing the charts of how like big tech was underperforming and how there's an imbalance in the Mag 7 and the Mag 7 rotation. And so what's the latest status there? Maybe we could talk about Nvidia.

Yeah, well, the latest status is most of the Mag 7 are, as I said, they are the ones that are most of the rally. Most of this 30% rally in the last, whatever, 1.5 months is because of the big tech. Nvidia are valued at $4 trillion. That's breaking news. I think that's about sort of 45 minutes old when Nvidia kind of broke through that price point. Hang on, it was 162, sorry, $164. $2.36 was the moment where it broke them through the 4-trill ceiling. That takes them, they, a couple of weeks ago they broke Apple's previous record. So Apple in December last year hit $3.92 trillion, right? So it's kind of taken that out. You know, the market, the S&P's up 30%, right? Nvidia's up 40% since early May. So it's the biggest component And it's the most rampant, you know, on the upside. And when you take the kind of big tech, like the tech sector makes up 33% of that index, right? And so when that sector's flying, obviously the whole index just kind of ramps up. And look, Nvidia, this has been one of those key concerns from the start of the year that helped to trigger, you know, and add fuel to that sell-off back in April. And it was the idea that, you know, the tech infrastructure buildout couldn't be sustained. You know, these big tech companies cannot continue spending money to build out their data centers at such a crazy rate. And Nvidia are going to be the worst impacted by that. And so obviously they were leading the sell-off, right? But what's happened? Well, actually all the big boys, so Microsoft, Meta, Amazon, Alphabet, they're now tracking to spend $350 billion this year. That's up from $310 billion last year. So far from pulling back, It's the opposite. They're kind of actually ramping up spend. And these, just those 4 companies make up 40% of NVIDIA's revenue. So when your big, big, big clients go, right, let's spend more. Well then happy days. And so that NVIDIA sort of remarkable story has continued beyond what people were worried about. And so that's helped obviously with the kind of general sentiment shift to a much more positive space.

Yeah. And there is a company there that you didn't mention and that was Apple because you mentioned Microsoft, Meta, Amazon, Alphabet, who've all been big beneficiaries of the recovery here on the AI story. But Apple's chart's looking way less tasty, right?

So you asked, you know, what's happening in amongst those Mag Seven? I said most of them are rallying. Apple ain't. So Apple's down on the year. One of the reasons is they're not in that list I've just given you, meaning they're just absent from the AI race. I don't know, do you use your iPhone? Do you ever use Siri?

I do when I'm driving.

How bad is Siri?

Siri is bad.

It's shocking. And they just don't seem to be doing anything about it. Right. And plus they're obviously more impacted by tariff risk supply chain concerns with China, even though I've contradicted myself because I've just said tariff risk isn't really a thing, but tariffs have gone up. There is a 10% tariff on the whole planet. And so companies like Alphabet, sorry, not Alphabet, Apple, do get overly impacted by that compared to most, right? So yeah, Apple's definitely still the underperformer out of those big Big Mag7. Cool. Well, and Tesla, I should say. Of course.

Yeah.

And now that, now that Musk's decided to start his own political party. Did you see that?

Yeah. Did you see? I think, I think I got a push notification about a few minutes ago saying, I think, is it the X CEO stood down or?

Yeah, that's right.

Yeah.

I saw that as well.

It's all going on now.

Yeah. It's kind of, It's kind of imploding a little. Another kind of, well, it's another part of the wave, the cycle with, with Elon, isn't it? Yeah. It's ups and downs and yeah. Yeah. We're definitely on a down leg at the moment.

Okay. Well, look, you did mention there tariffs and, and so is Trump. So let's talk a little bit about Trump and copper and then maybe the bigger picture we've been talking about for a number of months, which is Trump and the US debt situation. Yeah. So what happened with copper?

Well, Trump said today we're doing copper. That was this quote. Yeah. So what does that mean? Well, he's kind of now, you know, in his playbook, which is just repeating again and again and again. He's now, right, let's focus on copper, right? 50% tariffs, right? On everyone. Let's start there. Yeah, I mean, you got a spike higher in the copper price. I mean, this, it's a bit of a throwaway line. We got absolutely no details. It's just classic Trump. But look, within an hour, copper prices did spike 11%. They then came off that spike. They kind of sold, well, I don't know, they've kind of sold off maybe a third of it and then it's kind of consolidated. But so there was a big, move. And actually what was notable about that move did mean that it, and I would say what was notable and probably contributed, because look, on the one hand you got Trump, right? Who threatens tariffs and then, well, taco, right? He pulls back and you get nothing like 50%, right? So why would the market react? And actually you look at some of the copper producers, their share prices hardly moved. And when you look at some of the other markets, broader macro markets, because copper's obviously such a key component in our electronic world. And when you look at some of the other, like, I don't know, Nvidia, right? Nvidia, when they're making their chips, need a load of copper, right? That's a really key input. And so did the Nvidia share price really react or any of the other tech producers? And the answer's no, nothing really reacted except for the copper price and it's pung, it pinged 11%. But I think what led to that mostly was 'cause it was a break to a new all-time high and it was a breakthrough, this $5, you know, quite psychological level. We've been knocking on the door of $5 for a few years. So actually the 2021 high, the 2022 high, the 2024 high, the high from earlier this year in 2025, you know, all around that $5 mark. You know, really, really key kind of technical resistance. And that broke off the back of this throwaway comment from Trump, which just— so there was obviously a lot of stop orders just sitting up above that $5 mark that got triggered. These are stop orders. So if you are short copper expecting the resistance to hold and you want the copper price to hit $5 and then reverse back down, So you're selling at 5 expecting resistance and making profit from the fall from that point. But to protect yourself and manage your risk, you'll have a stop order above 5. So if the price does punch through, well then you're out. 'Cause you know, my strategy's wrong. I don't want to be short anymore. This thing's going up. So to get out, you buy. But if there's a concentration of stop orders, when you have a really important significant technical level, there's a concentration of stop orders and once triggered, leads to a really accelerated kind of stop order buying volume that kind of exaggerates then the reaction in the market. And I think that's a lot of the reason why we pinged 11% here.

And what this compounded by the fact that copper, it's not like a treasury bond in terms of its market depth. And there's a lot of automated algorithmic systems that will jump on momentum signals and it all compounds and exacerbates the short-term market. Reaction. Would that be correct?

That would be correct indeed. But look, kind of stepping back from the market reaction for a sec, you know, what is this a thing? I mean, firstly, as we know, Trump, this is his playbook, so it's not going to be 50%, right? I don't know where it'll end up. I guess we'll find out, but definitely a lot lower. So, you know, where are we left? Because from a sort of supply and demand perspective, so for your info, the US like over the last few years anyway, have been importing about 44% of their refined copper. Okay. So from a tariff point of view, that's a lot. That's a lot of their copper that they're having to import. So obviously from a tariff point of view, that's really significant, but they have actually been importing a lot. And look, people are, this tariff thing's obviously not new. Everyone was expecting copper to come under the spotlight at some point. So you have seen copper prices drifting generally higher. That's why we're up at $5, right? We're up at an all-time high already. So people have kind of been looking at this and they've been front-loading some of their copper imports. So actually from a supply point of view, it's believed that the US have probably got about one-third of a year's worth of supply already in the country. So I don't think there's like an immediate concern here about tariffs. And I guess it just buys time for Trump to do his thing and we'll end up at a much lower tariff point than 50%, right? So I think that's why generally markets haven't particularly, other than that copper price specifically for those reasons I've given, I think generally everything else was pretty sanguine about that. There's one, we don't have any details and there's one interesting point someone spotted, which was quite funny. 'Cause like, so some of that The 44% imported refined copper, most of that comes from Chile, right? So Chile's the world's biggest copper producer. A bit of random, a random stat for you there to utilize at your next pub quiz. But so a lot of it comes in from Chile, right? So would they, so that'd be tariffed, but then, right, to take the refined copper and to turn it into something useful. Well, actually typically the US send a lot of the refined copper to Canada. And there's a lot of, there's a process in Canada that turns it into like copper wire, for example, and then it gets brought back into the US. So there's a double tariff problem here for Trump. 'Cause what, is he going to tariff it on the way in from Chile? Then he is going to send it to Canada. What, he's going to tariff it again on the way back from Canada? So, you know, obviously from a practical point of view, you know, more reason to expect that you're not going to get a 50% tariff on copper, you know, come the end of this sort of latest saga.

Yeah, it's just really interesting to not think of it as just a final finished product. And that goes really for any commodity product across the space, I guess, in terms of when we talk about this sort of thing. I saw one analyst saying the US does not have nearly enough mine smelter refinery capacity, or each 3 different parts of this process to be self-sufficient in copper. The point being mines take too long to develop for that to be achieved. And they were giving timeframes really for that to go full circle, to be productive. That's going to be a 10-year timeline. Yeah. And the US would need to rely heavily on foreign mines to meet demand for the foreseeable future. So actually, Yeah.

As you said, and this is the problem with the US. One of the problems, like from a regulatory perspective, why, how can it take 10 years? Like China can bring on these facilities in like 12 months, but the regulatory burden, I mean, this is one of the things that Trump got voted in for was to try and get in amongst that regulatory situation and start chopping away at it and making doing stuff just more efficient. But, you know, again, trying to adjust these regulations, that's, you know, something on the radar for Trump. He will get to that. At the moment though, it's time for copper.

Yeah. And just to conclude, like why the time for copper? One thing I saw in terms of timing-wise that makes a lot of sense is Trump's proposed copper tariffs came a day after, so 24 hours after he had sent letters to 14 trading partners, including big hitters, Japan, South Korea, obviously threatening to whack some steep levies on them if they don't make a deal by August 1st. So this is like page 7 out of Art of the Deal. It's like you send the letters and then you go out with a really meaningful splash and then you follow up with the email the next day. How's that consideration going on that trade deal?

Yeah. How are them apples?

Exactly. All right, so look, with Trump, let's finish the Trump part. We're talking about the big beautiful bill and a few updates that we've got on that side.

Yeah, like classic Trump, he never misses an opportunity, does he? So his big beautiful bill was signed into law on July 4th.

Of course.

Independence Day. So obviously never want to miss a kind of media opportunity there, but look, he signed it off. You know, obviously there's a raging debate out there as to, right, I mean, is this a good thing? Is it a bad thing? And look, there's good and bad parts. That's the thing. The thing about this bill, it's just a monster of stuff that they've just shoved into one bill and kind of got through. And so often a lot of stuff in there goes overlooked 'cause the media, or let's say the left-leaning or the right-leaning media will latch onto certain specific things, right? But you know, There's tax cuts, extended tax cuts, so they now become law. They're tax cuts Trump implemented back in his first term, by the way, that were expected to expire. So we get continued tax cuts. He put in some other new tax cuts that he promised on the campaign trail, like his very famous no tax on tips. So that's now law, which I don't know, it's quite interesting 'cause like if I was in the US, I would now put my prices down. My official prices and have like a kind of side agreement with my client that, look, just pay me a bigger tip. Now I'll reduce your price, but pay me a bigger tip. Right. And then, so I don't know whether that particular, that's the scope for a lot of shenanigans there, I think, which may lead to, of course, lower tax receipts for the government. Right. But anyway, that's in there. They've obviously slashed some other programs in terms of government, like healthcare, government payouts for healthcare for the poor. It's kind of been changed. You've got changes to, like, particularly interesting from an Elon Musk battle point of view. They've chopped and removed the electric vehicle subsidies. They've removed various electric manufacturing subsidies. So there's definitely the Green Party of Ferry, not they were very unpleased about all of this. But one thing that was in there that I didn't realize, and no one's really talking about, is they've actually agreed to raise the debt ceiling. So that whole debt ceiling crisis, which I had right at the top of my list of risks for 2025, has now been entirely removed. So another reason why people like Goldman are going, all right, let's go more upside here for things like the S&P is because one of the key risks is gone. So in this debt, in this bill, they've agreed to raise the debt ceiling by $5 trillion, which actually is the single biggest one-time increase to the debt ceiling ever in history. So takes them to $41 trillion.

It's like, so just an NVIDIA with some change, basically just boosted it. So perhaps then did we, we could go into what is a CDS. So this default swap, like what is it first? What do people need to know as simple facts? And then what's happened in terms of why are we talking about it?

Yeah, I mean, in simple terms, it's insurance against bankruptcy. So if you are at risk, if you've got credit risk, right? If you're at risk of someone going bankrupt, i.e., you've You've lent them money. So in the bond markets, this is you've bought their bonds, right? So from a government point of view, this is the government issuing bonds, selling those bonds to investors. That's how the government borrows. So now the investor is carrying the default risk. They're obviously getting paid an interest for that loan, but they're at risk that the borrower's going to go bankrupt. Okay? So now you can buy insurance to protect yourself so that should there be a default event, actually you don't lose all your money. The insurer basically pays out. Okay. Now the price and the cost of insurance, like with anything, your car insurance, if you have a crash, then you renew your insurance, it's going to go up, right? The premium on your insurance is going to go up because hang on, the risk on you is higher now because look, you've crashed. So obviously the cost of borrowing increases as the risk of default increases. And so this year the CDS US price for US 1-year debt, right, had increased. And through the months of February and through the months of April, it'd been going up and up to as we were approaching the summer, because the whole risk was, well, actually the US hit their debt ceiling, their self-imposed limit of $36 trillion. They hit that in January. So since January, the government hasn't been borrowing any new money. They've obviously been paying for stuff, but they've been dipping into their savings account at the Fed, right? And the thought was that the savings account would run out this summer. So if the government can't do a deal to raise the debt ceiling, the government's going to run out of money and technically default, right? So the cost of insuring was increasing as a result. But after this bill's been announced, there was a big drop in the CDS price, now reflecting the fact that default risk, whilst look, was still small because they always get this deal done, it had been rising. And so anyway, it's now sold off again to reflect that deal's done. And I'm surprised it hasn't been, hasn't got any more airtime, to be honest. But yeah, it's another big 2025 risk that's been removed from the table.

So just a final question then on what you've described. So of what proportion are people having a CDS, a credit default swap, as insurance, as opposed to those people who are speculating on CDS price movement?

Oof. Okay. That's a good question. I don't know the answer to. So like you are basically asking the volumes that get traded in the CDS market, what proportion are actually people buying insurance because they're holding bonds and have that real default risk, but you don't need the underlying. To trade that CDS market, you can just punt your way around as a speculator betting on whether the cost of insurance is going to change, right? So I actually don't know the answer to that. So I dunno what the volume split is, speculator to actual hedging parties. I don't know.

If you're listening and you do know, let us know in the comments. And you know, give us some facts there. Stat check. Verification check going on here. Perhaps then to finish, we could talk about another kind of similar related situation because we were talking about the UK government and borrowing costs because there was quite a big fluctuation in 10-year gilt yields. So maybe we can talk about what's a gilt as well, just to quickly make sure everyone's on the same page. But then also we had this really sharp move higher in a very short timeframe on the 1st going into 2nd of July. And so that obviously sparked a lot of concerns that, you know, are we going to get a repeat to the yield crisis that we had going back a few years with Liz Truss? And then the markets reversed and there's also headlines now going that BlackRock showed us kind of saw through the market volatility, but what made them so confident as well? So yeah, Couple of different angles here to cover.

Well, firstly, do you know why they're called— well, so what's a gilt? That's just the name we use for UK government bonds. But do you know why is it called a gilt?

I don't know. Come on.

It's actually, so they're called gilts. So this is short for gilt-edged securities. And this is because they were originally issued with gilded So gold-edged certificates. So that was to kind of symbolize that the high quality and the reliability of the UK government as a borrower, right? So that's why gilt-edged.

Wow. Do you know what? I am going to absolutely smash this pub quiz coming up the next one when it comes. Chilli gilt-edged bonds. Let's go.

That's right. That's right. I mean, that's just the value I bring. To the listening community. Yeah, I mean, look, the UK, or let's be more specific, the Labour market is the government here in the UK and has been for the last year. Yeah, let's just say they haven't been having a great time of it from a fiscal kind of sustainability point of view. And last October they set about They put forward a huge budget. So every year they obviously renew their budget, right? What are we going to spend money on? How much are we going to spend and right, where are we going to get it from? So right, what's our borrowing requirements? Okay. And at the end of last year, they basically said, right, we're going to have to, we got a £40 billion hole we need to fill. So we're going to raise tax. And so they did a few tax increases such as increasing National Insurance for employers. Okay. And they said at the time, look, this is going to be a one-off. We've got this hole, we're just going to sort it right now. We're going to make big moves, big changes now, and then that'll be it. Okay? This will be the only time we do it. Okay? Here we are like 7, 9 months later. And unfortunately, as time's been going on, the UK economy hasn't been necessarily firing. Tariffs have come along, which, you know, we have tariffs, right? There's a 10% tariff on our stuff going into the US. So, you know, that has had an impact. And ultimately, as time's been going on, The gap that was 40 billion that they filled, that gap's now widening again and it's like between 20 and 30 billion apparently according to some measures. And so everyone's going, ah, okay, sorry guys, you're going to have to, you're going to raise taxes again, aren't you? Because so how else are you going to manage this? And Labour are like, ah, well, yeah. And not really saying whether they, or not, not certainly not saying they're not going to raise tax, right? So they're going to have to. And so look, there's fiscal, so it's just back to that simple point about creditworthiness and about supply. Are the UK government going to have to borrow more money? Are they going to raise taxes to avoid borrowing more money? But if they raise taxes, well, isn't that going to derail economic momentum? So you're stuck here, right? But if they go down the path of borrowing more, well, interest rates are actually still relatively really high. The one thing that the UK has in its favor from its debt position, they've actually got quite a, that their average maturity of their debt book is actually really long compared to most countries, just meaning that there's less pressure on refinancing debt in the short term. Right. But if they need to borrow more like right now, well, okay, you are borrowing in the short term and that's going to cost you money. Right? So there's kind of all that going on. But yeah, I guess the big boys were saying, look, let's buy the dip. So if prices come down, then, you know, they're just saying, we don't believe it's our strategy that we don't believe this is going to end in a debt crisis for the UK. So we believe this is a good opportunity to hoover up some more on the cheap.

Yeah. I mean, my interpretation of this when I was following it, a few days ago was, you know, what you've explained is all like the technical process, if you like. But the trading part of this was basically on the catalyst was Keir Starmer, the PM, not giving backing, not publicly immediately giving full backing to his chancellor. That then triggered because the marketplace sees her as a a voice of rationality, a market-friendly person, fiscal discipline. And oh, what if he buckles, lets her head roll and someone else comes in who's not so disciplined and the market's kind of fretted over that and that kind of jumped things to life. But then I think he quickly understood or got the memo 'cause perhaps he didn't connect the dots of exactly what that meant. And things reversed course. Well, within a day, within the day, Right. Pretty much.

Yeah. Yeah, exactly. And so it's just volatility that people are just trying to exploit. I mean, look, I would say from a yield perspective, we're right up at, we're just like on a 10-year gilt. We're kind of sat camped out under the 5% handle, which is really high. And we've been camped out, largely speaking, around that point for the whole of 2025. And we're kind of, this was the kind of highs from 2023 and the whole Liz Truss saga got us up. So we're actually sat at yields higher than the spike up in the Liz Truss saga. Okay. We're actually just slightly higher than that right now and have been for the whole year. I'm just below 5%, right? This is a quite a precarious position and markets are broadly, all right, there's ups and downs and short-term volatility, which is what we're talking about here where they came in and bought the dip. But longer term, you know, are we going to break 5% and move higher and this is going to become a real crisis for the UK or not? You know, can the Labour government get it right from a strategy point of view? Can the Bank of England cut? Can we get some momentum going and positive sentiment around the economy? In which case these yields, you know, might come back off again. But at the moment we're quite precarious just living under that 5% handle.

Question for you. I know you won't have a specific answer. What do you think in terms of like, if you were BlackRock and I was hoovering out some gilts here on the spike, wouldn't you, it'd be like Wall Street, like the original Wall Street, Michael Douglas. I'll pick up the phone and I'll be like, blue horseshoe loves it. UK gilded bonds. And then my buddy at Schroders goes, you hear BlackRock saying they're going to do that. And Like how incentivized are you and what guardrails are there regulatory-wise that if I'm buying, I want to tell everyone I'm buying. Yeah. A, to turn the market and B, to other people to join my trade, to push my position. Yeah.

And that's fine. That's not illegal. You could tell people I've bought, you know, why do people go on Bloomberg and CNBC every day? Like these PMs, portfolio managers get wheeled out, you know, every hour there's someone else chatting about their book and telling them, telling the audience what they've done, right? Of course, once you've bought, tell everyone else you've bought, because if you've got a good reputation, they're going to buy as well. And you've already bought and you are kind of front-running them buying, but not in an illegal way. It's not like you're giving away insider knowledge here. So that's not a thing. But look, I think—

What about when Rishi Sunak goes to work for Goldman Sachs though?

Wow. Yeah, that was interesting news, wasn't it? Wow.

Where do you draw the line between then the era of Westminster and power of influence and the financial masters of the universe?

It's a very good point. And there is a long history of, was it George Osborne went Trotted off to work for Goldman's, wasn't it? After he left the Conservative Party. Or look, there's a long history of politicians going to be advisors for banks and look, yeah, where is the line? That's a definite gray area, but it happens. And if the paycheck's big enough, then they'll do it.

Right.

But look, final point. 5% yields, right? If I said short-term volatility and like they're buying the dip, but actually there's some long-term play in here as well. 'Cause if you think this is the highest yields will be, if you think this is long-term, look, it's taken 5 years to go from yields that were nearly down around zero, around Covid. It's taken 5 years to go to 5%. So do you think that now in the next 5 years, Ultimately yields will drop again. Do you think the inflation crisis is fully in the rearview mirror and inflation will get to 2% or lower? You're going to get a rate-cutting cycle. Do you think those things are going to happen? In which case, this is a beautiful time to buy gilts because they ain't going to be as cheap as this for years, if that's your opinion. Now there's other people on the other side of that trade who think Labour are going to cock it up. Inflation is going to stay stubbornly high. Bank of England aren't going to cut. They're going to have to borrow more money. They're going to have to increase supply, driving prices down and yields up. You're going to get a break of 5 and this is going to be a crisis, right? So that's the opposite side of that sort of thought process.

I wonder as well, just connecting the dots then, if you have the midterms and let's say Trump loses a bit of power, the messaging around tariffs, given he's gone so hard now, it's not going to be, you would think, as intense in 2 years' time towards the back end of being reelected. And that would all be favorable conditions, if you like, for believing that yields will decline over time. But yeah, interesting. Good stuff. Well, look, we'll wrap it there. As per usual, any questions at all about anything we've discussed, please do put your point of view. We'd love to hear from you. Any questions, criticisms, might be steady, might be some, might be some Tories on the call who want to give their two pence about the fiscal situation, then please just let us know. We're open to all arguments with valid substance, let's say. All right, we'll wrap it up there. Thanks everyone for listening and we will see you next week. Take care.

See you later. Bye-bye.