20/04/26: Hormuz uncertainty, market rebounds & stock swings
Monday Espresso Podcast 20th April 2026
[00:00:00] Nathan Sweeney: Good morning. It's Monday the 20th of April. I'm Nathan Sweeney, Chief Investment Officer for Multi-Asset here at Marlborough, and joining me this morning, we have Sarah Todino, Assistant Portfolio Manager. Good morning, Sarah.
[00:00:11] Sarah Todino: Good morning, Nathan.
[00:00:13] Nathan Sweeney: So let's start with markets. And the key point really is after a pretty volatile start of the month, we've seen a decent rebound across major markets and regions.
[00:00:23] Nathan Sweeney: So over the last couple of weeks, it's pretty much been a US led move with technology stocks doing quite well, and actually we've seen a lot of markets just below or touching or gone through their all time highs, so we've seen some good moves over the last couple of weeks.
[00:00:38] Nathan Sweeney: But as we moved into the end of the week and over the weekend, attention started to shift back towards developments in the Middle East.
[00:00:45] Nathan Sweeney: We initially saw some easing in concerns around the Strait of Hormuz towards the end of the week, which led to a sharp move lower in oil prices. However, the situation remains uncertain. Retention still elevated and the ceasefire looking fragile. As a result, oil prices have been quite volatile, and that's feeding through into markets more broadly.
[00:01:10] Sarah Todino: Well, it's really a case of the market catching its breath, but also a clear shift in the narrative here. So a couple of weeks ago, everything was about worst case scenarios, particularly around the risk of disruption through the Strait of Hormuz. What we're seeing now is that risk is starting to ease, and importantly, that geopolitical risk premium coming out of oil prices, and that's feeding through into markets more broadly now.
[00:01:34] Nathan Sweeney: Okay, so it's less about great news and more about the removal of a key concern.
[00:01:40] Sarah Todino: Exactly. So markets don't need everything to be perfect. They just need things to stop getting worse. And when you see oil falling sharply like this, it takes pressure off inflation expectations as well.
[00:01:52] Nathan Sweeney: And that's showing up across asset classes.
[00:01:55] Nathan Sweeney: We've seen equities move higher, but at the same time, bond markets have been relatively stable, suggesting investors are a bit more comfortable with the inflation outlook, than they were.
[00:02:07] Sarah Todino: That's right and it reinforces the idea that the spike in inflation we saw recently was more about energy than underlying demand.
[00:02:15] Sarah Todino: So if oil stabilises or moves lower, that gives central banks a bit more breathing room.
[00:02:21] Nathan Sweeney: Yeah, and that probably feeds into the broader theme we've been seeing this year. So markets have felt a bit like Formula One this season.
[00:02:28] Nathan Sweeney: You've seen these sharp swings, particularly for the fans between, should we have these hybrid engines, electrification versus the old school engines. And you're kind of seeing that in markets too, so despite all the geopolitical concerns we've had and everything that's been driven as a result of that oil price, inflation, et cetera, we've seen AI stocks come off and real world economy stocks doing well.
[00:02:54] Nathan Sweeney: So think of heavy industry like energy, but now we're seeing that rotation back. Particularly last week, as people are kind of looking at those companies again as we come into earning season. So you're seeing this kind of shift in leadership and shift back?
[00:03:09] Sarah Todino: Exactly. Technology has bounced back strongly over the past week, particularly in the US but the same time other parts of the market haven't fallen away.
[00:03:17] Sarah Todino: So it's not a narrow rally, it's more a balanced recovery, which is encouraging.
[00:03:23] Nathan Sweeney: So let's move on from, you know, kind of the key market news last week, and let's touch a bit on inflation briefly. So the US data didn't really look great on the surface, headline inflation has ticked higher. So I suppose, what's your take on inflation?
[00:03:37] Sarah Todino: So the key point is that increase was largely energy related, and we are now seeing that reverse into the end of the week with oil prices falling. So if you strip that out, the underlying trend hasn't really changed. So from a policy perspective, it doesn't dramatically alter the outlook.
[00:03:53] Nathan Sweeney: So again, it comes back to not overreacting to the headlines really.
[00:03:57] Sarah Todino: Exactly. Inflation isn't moving in a straight line, but the broader trend is still more stable than the headlines might suggest.
[00:04:04] Nathan Sweeney: Yeah, and I suppose the other thing coming into to view is earning season, so they've started to come through company earnings. Is there anything worth highlighting at this stage?
[00:04:12] Sarah Todino: Well, it is early, but the key theme so far is resilience. So some companies are still showing strong pricing power. Others are starting to see a bit more pressure. So it's becoming a more selective environment. Not everything is moving together.
[00:04:27] Nathan Sweeney: Yeah, and that kind of fits with what we've been saying.
[00:04:29] Nathan Sweeney: So you know, this is a market where dynamic positioning really, really matters.
[00:04:34] Nathan Sweeney: Let's look ahead actually, so what have we got this week coming up?
[00:04:37] Sarah Todino: Yeah, so plenty to watch. We've got UK labour market data early next week, inflation midweek, and then retail sales to finish off.
[00:04:45] Sarah Todino: So the focus is really on wage growth and inflation because that will shape expectations for those Bank of England rate cuts
[00:04:53] Nathan Sweeney: And markets are still expecting cuts later this year.
[00:04:57] Sarah Todino: That's right. So any upside surprises could push those expectations back, which would have a knock on effect on equities, bonds, and Sterling.
[00:05:06] Nathan Sweeney: So to wrap up, markets have stabilised after a volatile start of the month, supported in part by some easing in geopolitical concerns. But the situation in the Strait of Hormuz remains uncertain, and that's being reflected in continued volatility in oil prices.
[00:05:23] Nathan Sweeney: That's taken some pressure off inflation expectations, but it also highlights how quickly conditions can change.
[00:05:30] Nathan Sweeney: Underneath that, we're still seeing rotation, but a much more selective market environment.
[00:05:37] Nathan Sweeney: This week, the focus shifts back to data, particularly in the UK and what that means for interest rates.
[00:05:43] Nathan Sweeney: Sarah, thank you for joining me.
[00:05:45] Sarah Todino: Thanks Nathan,
[00:05:46] Nathan Sweeney: And thank you to our listeners. If you do have questions, send them in, we'd love to bring them up on the podcast. We'll be back next week. Have a great week.
