Blain's Morning Porridge

Record US Stock Markets But Something Ain’t Right?

Blain’s Morning Porridge, May 27th, 2026 – Record US Stock Markets But Something Ain’t Right?  And what rough beast, its hour come round at last, slouches towards Bethlehem to be born? You can’t keep a good market down. New record US levels seem to occur daily. But, why? The underlying picture of the US economy is not weak, but the political structures around it seem to be fraying. What might give and trigger the kind of reversal many expect, or might we get a more fundamental reassessment of what the USA will look like post-Trump? Joy unbounded in markets! Stock markets have hit new record levels – yet again. If you were to snapshot the US economy – what’s not to like? The AI everything boom and the promised productivity gains are driving sentiment higher. Employment numbers are generally solid. Growth is decent. Corporates are doing well with rising outlooks. And the when the stock market is strong – well, that’s a great sign of confidence in the economy and its leadership. The US President would certainly claim so… Why do I have a gut feel a crisis is coming. Its more than just rising inflation fears, or consumers struggling with a 50% hike in gas prices. Talking with American chums, I get the sense they are increasingly worried about stability and sustainability in the debt markets. In bonds there is truth – which we shall come to below. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠ [http://www.morningporridge.com], and have it delivered fresh to your inbox every morning!

AI - Who Should We Listen To? The Pope or the AI Owners?

Blain’s Morning Porridge May 26th, 2026: AI - Who Should We Listen To? The Pope or the AI Owners? “Contemporary man has not been trained to use power well.”  The Pope has published an Encyclical warning on the risks of an ill-considered rush towards AI. It comes at a time when AI is driving the markets, and AI leaders are whispering in Trump’s ear that regulation will destroy America’s lead. It’s not just the risk we will be turned to grey gloop by AI overlords, but how jobs, the economy, inequality and social equality are at all in play. Apologies for a very brief Morning Porridge but got to travel. Even on adjusted terms, AI has probably been the biggest driver of stock market upside in recorded history. The top 10 names in the US market account for 40% of its value - $26.5 trillion of a $65 trillion market. That’s created enormous wealth and prosperity – but as a recent survey pointed out – 50% of US stocks are held by 1% of the population… Is Pope Leo set to become the moral conscience of the markets? You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠ [http://www.morningporridge.com], and have it delivered fresh to your inbox every morning!

Just how bad could the bond market get?

Blain’s Morning Porridge May 22nd 2026 – Just how bad could the bond market get? “Ships make no money sitting in port, so build and sail them to ride the storms that will inevitably assail them.” In Bonds there is truth. While government bond yields have risen some 40-50 basis points since the Iran War, and yield curves have steepened, we are not in crisis territory yet. However, the risks of “higher for longer” rates, and sustained inflation have risen. These will impact credit markets and potentially trigger a cascading corporate crisis – leading to all kinds of hell that governments and central banks are now ill-equipped to deal with. Time to talk about the bond market. The Iran inflation threat has led to mounting concern about what rising yields in Treasuries, Gilts and JGBs might herald in terms of recession and a crisis across bonds and credit. (What? You thought they were the same thing? Wrong...) Sovereign bond markets have steepened on the expectation of higher for longer interest rates primarily due to rising inflation expectations, but also due to the perception of escalating political incompetency – and it’s the yield on Bonds that set the risk rate for the whole economy. Never underestimate the probability events and bad politicians will be able to steer us into full blown stagflation!  There is no shortage of headlines about what rising debt costs mean for the sustainability of Governments – particularly here in the UK, where Sir Keir Starmer’s hapless government is scared of everything, but thinks about the bond market in abject screaming terror. Relax. It’s not the end of the world as we know it… Yet! It might become so. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠ [http://www.morningporridge.com], and have it delivered fresh to your inbox every morning!

When Personalities Lead the Markets what might follow?

Blain’s Morning Porridge May 21st, 2026 – When Personalities Lead the Markets what might follow? “Second prize is a set of steak knives…” I know I should be talking about bond yields and inflation risks, but sometimes we have to stop and listen to the noise. Trump, Musk and Bill Winters. When our idols say, do and enact stupid things there are always consequences. This is a market perhaps too focused on the personalities, and not enough on the realities. The markets are getting worried about bonds. I am watching. But there are lots of other things to consider this morning when trying to fathom the current markets. In no particular order let’s deal with wage slavery, FOMO risks, and the ultimate corruption of the US dream…

Defence Investment is evolving fast, and the winners are in Ukraine.

Blain’s Morning Porridge 20th, May 2026 - Defence Investment is evolving fast, and the winners are in Ukraine. “The war for which Generals prepare is always the last one – especially if they won it.” Investing in defence was a sadly neglected skillset for many years following the end of the Cold War. Defence primes became utility like seeking to preserve margins as real budgets declined on the peace-dividend. The War in Ukraine has highlighted many things, but critically that what the Primes are selling isn’t what’s going to win the next War. To invest in defence – you need insights into the future of the battlespace.  Time to talk my own book again – about Defence and how to invest in it. And, yes, I will mention Spitfire Strategic Capital [https://www.spitfirestrategiccapital.com/], where I am senior advisor to the managing partners. Most investors have now woken up to the reality it’s time to forget everything they thought was obvious about investing in Defence. If only it was as simple as buying swords because the trumpets are sounding. It’s not. The stock price gains European Defence Primes experienced after the Ukraine invasion went into reverse last year. That’s not because the threat is receding, but because of the old truism Generals (actually procurement departments) will always plan to fight the last war, and not the one that is coming! Last year’s stock market darling, Rheinmetall is down 40% from its top last October as that realisation has sunk in. Modern war and the weapons to fight it have fundamentally changed – we will not see the behemothic armoured clashes on the North German plains that NATO planned to fight during the Cold War. To invest in defence today you need to understand how the battlespace has evolved and expanded. That covers what happened following the fall of the Berlin Wall and, even more importantly, how warfighting has evolved over the last 4 years in Ukraine. You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠ [http://www.morningporridge.com], and have it delivered fresh to your inbox every morning!