Personal Wealth Management Monday Espresso Podcast

Monday Espresso Podcast - 24th August 2026

[00:00:00] Rory Dowie: Good morning. Today is Monday the 24th of August, and I hope you all had a good weekend. I'm Rory Dowie, Portfolio Manager here at Marlborough. Joined again by the one and only Andrew Shaw, one of our Investment Analysts on the team. Andrew, good morning.

[00:00:14] Andrew Shaw: Morning Rory.

[00:00:15] Rory Dowie: As usual, we have three topics this morning.

[00:00:17] Rory Dowie: Firstly, a historic moment in the US. The national debt has topped $40 trillion for the first time, and treasury Secretary Scott Bessent has stepped in to calm the bond market. Second, something a little bit more uplifting, potential cancer breakthrough from Moderna and Merck and finding close to home UK inflation, which ticked back up in July.

[00:00:39] Rory Dowie: But first, Andrew markets last week. What were they looking like?

[00:00:43] Andrew Shaw: Yeah, it was a tough week last week. Rory, though, not too bad. The S&P 500 fell 1.5% in dollar terms and the tech heavy NASDAQ fell a bit more than that. For us as UK investors. It was a shade worse because the dollar weakened again, which does eat into any gains we make, from US stocks.

[00:01:02] Andrew Shaw: European equities were down around 1.5%, which is the same as the US. UK was a little bit more resilient for the week. Broadway flat, further east in Japan, that was definitely the lagard of the week and that was off 4%. The real action last week was away from shares as oil pushed up towards $93 a barrel, and that was on fresh tensions with Iran and gold, which investors tend to buy when the nervous hit a fresh record of around $4,600 an ounce.

[00:01:33] Rory Dowie: Yeah, short term record then for Gold a nervier tone across markets. And a lot of that came straight from the bond market, which I suppose is a good place to start. Andrew, take us through the US debt piece.

[00:01:46] Andrew Shaw: Yeah. On Wednesday the US Treasury confirmed the national debt had passed $40 trillion for the first time, which is a record and one that arrived faster than anyone had expected.

[00:01:58] Andrew Shaw: The US actually only hit $39 trillion of debt back in March, and so that's a trillion dollars added in around five months. And it does matter for ordinary people because the more the government borrows, the more it spends just to pay the interest back. And so the US is now spending well over a trillion dollars a year on the interest of those bonds alone.

[00:02:21] Andrew Shaw: And that's more than the entire defence budget of the US.

[00:02:25] Rory Dowie: And the bit that really spooked markets was the interest rate on that debt.

[00:02:28] Andrew Shaw: Exactly. When a government borrows, it sells bonds, essentially IOUs, and the yield is the interest rate that pays to get people to buy them. So last week, investors grew worried about all this borrowing and demanded a higher return. That's pushing the yield on 30 year US government debt to its highest since 2007, which was before the financial crisis.

[00:02:52] Andrew Shaw: And those higher costs feed through to the rest of us in, things like mortgage rates and car ones.

[00:02:57] Rory Dowie: And this is where Scott Bessent, the US Treasury Secretary, effectively America's finance minister stepped in Andrew.

[00:03:04] Andrew Shaw: Yeah. The treasury said it would at least double its bond buyback programme and that's where the government buys back some of its own bonds.

[00:03:11] Andrew Shaw: That's adding a bigger buyer to push borrow costs back down. And it worked for about a day and yields fell sharply on that announcement, but by Thursday they'd crept most of the way back up.

[00:03:24] Rory Dowie: Right. Let's move on to something a bit more positive then some encouraging news from the world of healthcare last week.

[00:03:30] Rory Dowie: What was that?

[00:03:32] Andrew Shaw: Yeah, it's really encouraging. Rory Moderna, the name we all remember from the COVID vaccines and the US pharmaceutical giant Merck announced that their personalised cancer vaccine succeeded in a large weight stage trial for melanoma. And that's the most serious form of skin cancer. It's a genuine first as well, that this is the first time a vaccine of its kind has proven itself in a full scale trial.

[00:03:54] Rory Dowie: Yeah. Okay. So explain how that works then. 'cause it's quite a clever way they've done it this time, isn't it?

[00:03:58] Andrew Shaw: Yeah. It uses the same mRNA technology as the COVID jab, but instead of a one size fits all, it's built individually for each patient and doctors take a sample of the patient's own tumour and work out its unique genetic fingerprint.

[00:04:14] Andrew Shaw: And then machine learning algorithms that sift through huge amounts of genetic data to support patterns are used to pick out which of these mutations it needs to target the vaccine, then trains the patient's immune system to recognise and attack that specific cancer. And given alongside an existing cancer drug, it cut the risk of cancer coming back or spreading.

[00:04:38] Andrew Shaw: And an earlier study put that reduction at around 49%.

[00:04:42] Rory Dowie: Yeah. And I guess that machine learning point's worth dwelling on. I mean, machine learning's been around for a while. This is actually kind of more sort of historic kind of mathematical models that's managed to do this. This isn't actually kind of the new AI or the LLMs, which, you know, we've been talking a lot about on the pod.

[00:04:57] Rory Dowie: But again, this is one of the reasons why we are quite excited as a company around, you know, the potential impact of AI on drug discovery. That might mean we get more drugs going through the drug discovery process and potentially higher success rate in clinical trials, which in theory, you know, should benefit a lot of those pharmaceutical companies given they spend huge amount on r and d.

[00:05:18] Rory Dowie: And then obviously, hopefully a net positive to us in society. And we source strong balances in both of those stocks. Moderna was up actually 176% on the day that was announced. So yeah, market taking that well as well. Changing tact Andrew, we had UK inflation figures last week. They went the wrong way.

[00:05:36] Andrew Shaw: They did inflation, which is how fast prices a rising climb to 2.9% in the year to July. And that was up from 2.6 the month before and that's the first increase since March. And it takes us further above the Bank of England's 2% target.

[00:05:53] Rory Dowie: Yeah. And lifting the herd put was driving that.

[00:05:55] Andrew Shaw: It was almost entirely energy.

[00:05:57] Andrew Shaw: So gas and electricity were the culprits. Household bills rose about 13% at the start of July and that traces right back to the conflict in the Middle East, which has kept wholesale gas prices, high. Encouragingly core inflation, which strips out volatile things like energy and food did hold steady and so it was like an energy shock rather than prices rising right across the board.

[00:06:20] Rory Dowie: Yeah, and that's an important point to suggest the Bank of England may look through some of the headline numbers rather than rushing to react though clearly still an unwelcome squeeze on us households here in the UK and for context that 2.9% is now running a little bit higher than, than what we have in France and Germany and, and some of the rest of Europe.

[00:06:39] Rory Dowie: We have the rate setting committee next month, so I guess we'll be watching that closely. Before I let you go, Andrew, what have our listeners got to look out for this week?

[00:06:49] Andrew Shaw: Yeah, it's a busy one. Wednesday brings NVIDIA's results and that's the world's most powerful AI company. It's always a big moment for markets. Ofgem, the energy regulator that sets the cap on household bills is due to confirm the October price cap around midweek, which after everything we've just discussed, will be watched closely and at the end of the week, central banks gather at Jackson Hole in the US where the new Fed chair Kevin Warsh gives his first big speech in the role on Friday.

[00:07:16] Rory Dowie: Brilliant. Lots to digest then, Andrew. Thank you as always for making it so clear. To our listeners, thanks for tuning in. As always, do reach out if you have any questions and wishing you a great week ahead.