Halftime for the markets
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What does the current market landscape look like halfway through the year?
Pushkin. Okay, who else needs a holiday? 2026 is 50% loaded. We're halfway there and we're very much living on a prayer. Markets have been on a kind of wild and honestly kind of stupid ride. Threats of war, actual war, rotations and rotations, and a big jump in fun-sized stocks. We're Worse, the Americans are getting into football and starting to talk about the offside rule. This feels like the bit in Jurassic Park where the velociraptors learn how to open doors. Today on the show, what does it all mean? Does it mean anything? What are we doing with our lives talking about markets? This is Unhedged, the markets and finance podcast from the Financial Times. I'm Pushkin. I'm Katie Martin, a markets columnist at the FT in a slightly cooler and football-mad London.
Joining me down the line from his bunker in Long Island, hopefully without the technical issues he had earlier this week, is soccer cat Rob Armstrong.
Rob. I was going to say, congratulations to the Britain soccer cats, which I think is what your team is called.
How have the Magnificent Seven stocks performed recently?
Katie, I should mention that we are near our day of national independence, the 4th of July. And what we do to celebrate independence in this country is we mow lawns. And so you may hear out here on Long Island the sound of a lawnmower in the background because there is always a lawnmower going.
Is this also the holiday where you all throw fireworks at each other?
This is the one. Sounds fun. See, I used to have a pinky finger day, I think is what it's called.
So, look, some years you feel like you have a sort of spell in markets and you kind of know what to call it or you know what the big theme is. And I don't know, like, I really feel like so far in 2026, we've just been trying to nail jelly to a wall. Like, it's just... What is even the big theme? What is going on?
Am I alone in feeling like just sort of spun around? of this year might be this year to date might be the fact that in the last month, the master narrative of the last five years has kind of broken down. And that master narrative is watch the magnificent seven go up. Right. And that, you know, the Magnificent Seven could do no wrong. It led the market up when it stumbled. Everything went down. And you might have told the story. It's AI. It's the Magnificent Seven. Everything is great until June started. And then it's like everything falls out of bed. And you're like, where are we?
So we've talked about the Magnificent Seven, but let's just kind of rewind for people who've missed this whole thing. There's like a clutch of seven massive stocks in the States, most of them very tech-flavored. We always forget at least one, but we're talking Apple, Alphabet, Microsoft, Amazon, Meta.
The one we'd all like to forget is Tesla, which is kind of like in a family of seven, it's like the embarrassing brother who went to prison and nobody wants to talk about it.
What impact does inflation have on wage growth in today's economy?
We don't talk about it. The black sheep of the family.
When I think about it, I like to swap out Tesla and swap in Broadcom. But officially, Tesla's in there. Yes.
But so the point is, this is what I was talking about right at the top. This is one of the big rotations. So if you look at one of the big sort of US stocks indices, it looks a bit like a plateau, but it's still broadly going up. But beneath the surface, you've kind of got this kind of wrenching noise because the leadership has completely switched because those magnificent seven stocks have become, like the MAG7 has become the LAG7.
Yeah.
And in fact, we pointed this out in the newsletter today. The Magnificent Seven group of stocks has underperformed UK government bonds so far this year.
Which is very sad. That's a sad story. That's like a seven word tragedy right there you just composed.
Yeah.
Yeah, like a tragedy in three words, worse than guilt. But that's like, so you've got that kind of tectonic shift beneath the surface of US stock markets, which therefore is of global stock markets, because they're just so much bigger than the rest of us. But it's everywhere, right? So at the start of this year, it feels like a million years ago now.
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