One Knightsbridge Capital Monday Espresso Podcast

Monday Espresso Podcast 27th April 2026

[00:00:00] Andrew Shaw: It's Monday, April the 27th, I'm Andrew Shaw, and we're here to give you your weekly market update.

[00:00:06] Andrew Shaw: Last week delivered a lot to discuss, a wobble in equities off record highs, oil surging past a hundred dollars a barrel again on Middle East tensions, and a brutal split in how the market is treating AI earnings.

[00:00:19] Andrew Shaw: Joining me to unpack all this is our Investment Analyst, James.

[00:00:23] Andrew Shaw: James, good to have you with us.

[00:00:24] James Millward: Thanks Andrew. Yes, there's definitely a lot to get through.

[00:00:27] Andrew Shaw: Today, we're breaking down the week ending April the 24th. The renewed pressure from the US-Iran standoff around the Strait of Hormuz and surprisingly punishing market reaction to big tech earnings, plus a big central bank week ahead of us.

[00:00:42] Andrew Shaw: So let's start with the scoreboard. The S&P500 hit a fresh intra day high on Thursday before giving some back. Where did we end up last week, James?

[00:00:51] James Millward: So the S&P closed Thursday at 7,108, down about four tenths of a percent on the day, but still within striking distance of the record. For listeners, the 7,000 level is a really psychological benchmark.

[00:01:04] James Millward: Think of it like a runner breaking a four minute mile. It doesn't change the track, but its signalled momentum. Elsewhere in markets, Japan rose just over 2% while in Europe, the FTSE100 fell around 2% with the wider Euro area falling a similar amount.

[00:01:19] Andrew Shaw: And the catalyst for that pull about last week, James?

[00:01:22] James Millward: Yes, two things really, oil spiking back above a hundred dollars a barrel, which we'll come to in a second. And a genuinely ugly reaction to some of last week's tech earnings, which was the biggest story.

[00:01:34] James Millward: The higher for longer narrative is still in the background too, when rates stay elevated, it acts as a headwind for global growth stocks. It makes their future profits look a little less attractive today.

[00:01:45] Andrew Shaw: Let's talk about oil. There was a significant week for energy. The US-Iran standoff around the Strait of Hormuz, reignited in quite a big way, didn't it?

[00:01:53] James Millward: Indeed, yes. Brent crude blew past a hundred dollars on Wednesday for the first time in a couple of weeks, and by Friday morning it was trading north of $105 a barrel.

[00:02:04] James Millward: That's a meaningful move. For context, Brent was under $94 a barrel last week.

[00:02:10] James Millward: When shipping lanes are disrupted, energy prices spike and that feeds directly into fuel, freight and input costs across the economy.

[00:02:18] James Millward: Gasoline in America is averaging over $4 a gallon. For companies it's a double-edged sword. Energy majors and oil filled service names benefit, but for almost everyone else, high transport costs eat straight into margins.

[00:02:32] James Millward: We saw that inflation figures for March in the US were meaningfully higher as at 3.3%, mainly due to the all price moves.

[00:02:40] Andrew Shaw: Yeah and it does really have an impact on the wider economy and in everyone really doesn't it? There's no hiding from it.

[00:02:46] Andrew Shaw: The macro read that came in from this, from the IMF, can you run us through that, James?

[00:02:50] James Millward: Yes, indeed Andrew. The IMFs April World Economic Outlook cut its 2026 global growth forecast to 3.1% down from 3.4% in 2025, explicitly citing the Middle East conflict.

[00:03:04] James Millward: They also flagged headline inflation ticking up to 4.4%. That's their reference scenario, which assumes the conflict stays limited. They have adverse and severe scenarios that get considerably worse.

[00:03:17] Andrew Shaw: Let's pivot to earnings in the US and that's where the real story was last week.

[00:03:21] Andrew Shaw: Tesla reported on Wednesday evening, and price reaction was negative on Thursday morning. Revenue came in, it was up 16% year over year, and they beat on EPS, but the underlying picture was weaker. They had deliveries of 358,000 cars, but they missed by nearly 8,000 cars.

[00:03:39] Andrew Shaw: And the biggest story there was that there's actually an inventory buildup of more than 50,000 cars from Tesla. So that's not a great sign for them, and the market punished them. We'll leave that there.

[00:03:50] Andrew Shaw: Who else was reporting James?

[00:03:52] James Millward: Indeed, Andrew, IBM and ServiceNow were reporting. IBM beat on the top and bottom line and maintained full year guidance. The stock was materially lower on these results down more than 8%.

[00:04:04] James Millward: While ServiceNow dropped almost 18%. The market is no longer rewarding we use AI. It's asking pointedly, when does the AI spend turn into AI revenue?

[00:04:15] Andrew Shaw: And that is a big question. On the flip side, Intel jumped 26% pre-market on Friday on its beat.

[00:04:22] James Millward: Yes, indeed. That's what one analyst is calling the great dispersion. The market is no longer pricing AI as a single trade. It's separating the enablers, the monetisers, and the lagards.

[00:04:33] James Millward: Intel delivered, ServiceNow shares reacted badly to news on guidance in the same week. The opposite reaction. We've moved firmly past the hype phase now into the show me the receipts phase.

[00:04:46] Andrew Shaw: Yeah. Looking forward, what's going on this week? What's on the radar, James?

[00:04:49] James Millward: It's arguably the biggest week of the quarter. Two big things are happening on Wednesday, the 29th of April.

[00:04:55] James Millward: First, the Fed decision in the afternoon. Rates almost certainly on hold but the language matters. The Fed also has to navigate inflation that's tipped up on energy. Core PCE, still above target and Q4 2025, GDP of just no 0.5% so the economy continues to weaken.

[00:05:14] James Millward: The question is whether they sand hawkish on inflation or keep the later cuts alive into late 2026.

[00:05:21] Andrew Shaw: And after the market on the same day, as you mentioned, after the Fed decision, we've got Microsoft, Meta, Alphabet, and Amazon all reporting. The four hyperscalers in one evening.

[00:05:31] Andrew Shaw: What does that mean for us, James?

[00:05:34] James Millward: AI CapEx will certainly be in question. These companies are collectively spending hundreds of billions of dollars on AI infrastructure in 2026. And after what happened to IBM and ServiceNow last week, investors will be unforgiving if monetisation story doesn't add up.

[00:05:49] James Millward: The Apple reports on Thursday and the Bank of Japan decision also lands on Thursday into Friday. Any hints of another hike and we'll see it in the Yen and in the global currency markets. Plus Q1 GDP, and PCE data Thursday morning.

[00:06:05] Andrew Shaw: Yeah, it's a busy week. Fed Wednesday afternoon, the four hyperscalers Wednesday night and Apple and the BOJ on Thursday. It's gonna be a big week for data releases.

[00:06:15] Andrew Shaw: Thank you very much for walking us through this, James, and glad to have you on board.

[00:06:19] James Millward: Not at all. My pleasure, Andrew.

[00:06:21] Andrew Shaw: That's it for this week's Monday Espresso podcast. The takeaway, markets resilient, near record highs, but there's a new sensitivity, out there, and that's the three C's conflict, central banks and corporate earnings, and this week we get heavy doses of all three.

[00:06:35] Andrew Shaw: I'm Andrew Shaw and we'll see you next Monday.