This Week in Review | UK Politics, Fed Developments, IPOs (May 22, 2026)
This Week in Review covers three major developments: UK political instability following Labour's local election losses and a cabinet resignation, the swearing-in of Kevin Warsh as the new Federal Reserve chair replacing Jerome Powell, and a cautionary analysis of the current IPO wave. Fisher Investments analysts argue that while each development creates short-term uncertainty, none is necessarily negative for long-term investors.
Summary
The episode opens with UK political turmoil, noting that Prime Minister Keir Starmer faces mounting pressure after Labour suffered historic losses in local council elections. The situation escalated with Health Secretary Wes Streeting's resignation and announcement that he would challenge Starmer for the Labour leadership. The analysts explain that a formal leadership contest would involve a postal ballot among party members lasting several weeks, and that a Starmer resignation would likely produce policy gridlock until a new government is formed. However, they argue this gridlock could actually reduce legislative uncertainty, and that frequent leadership turnover in recent British politics limits the surprise factor for markets — suggesting falling uncertainty could eventually become a tailwind.
The second segment covers the Federal Reserve, reporting that Kevin Warsh was sworn in as Fed chair on the day of recording, succeeding Jerome Powell, who will remain on the board as a regular voting member. The analysts acknowledge concerns that Trump's expectation of rate cuts from Warsh raises fears of political interference in monetary policy. However, they push back on the notion that Fed leadership changes are automatically negative, citing historical data showing positive average and median stock returns in both the six and twelve months following a new Fed chair's start. They also emphasize that monetary policy is set collectively by the 12-member Federal Open Market Committee, limiting any single chair's near-term influence.
The final segment addresses the resurgence of IPO activity, with several high-profile firms reportedly eyeing public debuts. The analysts caution investors against IPO enthusiasm, noting that from 1980 through 2024, newly public companies underperformed similarly-sized peers by an average of 3.3% annually over their first five years. They attribute this to the tendency for companies to go public when market conditions favor issuers — typically later in a market cycle when optimism and valuations are already elevated. They apply this lens to current technology and AI-related IPO candidates, suggesting expectations may already be stretched relative to fundamentals. The segment closes with the observation that how the market receives major IPOs could serve as a useful sentiment indicator for where we are in the broader market cycle.
Key Insights
- Fisher Investments analysts argue that a potential Starmer resignation and resulting policy gridlock could actually reduce legislative uncertainty rather than increase it, framing political paralysis as a possible near-term positive for markets.
- The analysts cite historical data showing that average and median stock returns have been positive in both the 6 and 12 months following the start of a new Federal Reserve chair's term, countering the narrative that leadership changes are inherently negative for markets.
- Fisher Investments emphasizes that the Fed chair does not set monetary policy unilaterally — the 12-member Federal Open Market Committee makes those decisions collectively — which limits the near-term impact of a chair transition on the trajectory of monetary policy.
- The analysts report that from 1980 through 2024, newly public companies underperformed similarly-sized peers by an average of 3.3% annually over their first five years, arguing that a small number of standout IPOs obscure a much larger group of underperformers.
- Fisher Investments argues that many IPOs come to market when conditions favor the issuing company rather than investors, and that this dynamic appears to be at play with current technology and AI-related firms where expectations may already be elevated relative to reality.
Topics
Transcript
[0:06] Hello, and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up-to-date with our latest market insights, subscribe to our YouTube channel or visit fisherinvestments.com. Now, let's review what happened this week. First, an update on UK politics. [0:37] British Prime Minister Keir Starmer faces growing pressure after his UK Labour Party suffered historic losses in local council elections earlier this month. That pressure intensified last week when UK Health Secretary Wes Streeting resigned and announced his intention to challenge Starmer for Labour leader and prime minister. If a…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Fisher Investments
3 Things You Need to Know This Week | NATO Summit, Fed Minutes, Quarterly Reporting (July 6, 2026)
This weekly market briefing covers three major topics: the NATO summit in Turkey and its limited market impact despite higher defense spending, the Fed's June meeting minutes under new Chairman Kevin Worsh showing divided views on future rate decisions, and an SEC proposal to change public company reporting from quarterly to semiannual cadence.
This Week in Review | Q2 Market Recap, June US Jobs, Trade Deal Update (July 3, 2026)
This market review covers Q2 2026 performance showing global stocks rebounded 8.9% in April and 4.8% in May before experiencing June volatility, primarily in tech. Key developments include stabilizing oil prices post-Iran conflict, elevated inflation at 4.2%, weak June job growth of 57,000 with falling unemployment to 4.2%, and the US-Mexico-Canada trade agreement review proceeding without extension.
Why Oil Prices Are Falling—and What It Signals
Brent crude oil prices have fallen from the low 80s to around $73 per barrel, returning to pre-war levels. Markets have demonstrated resilience by recovering from the geopolitical shock faster than expected, with oil futures contracts for 2027 fixed around the $70 range, suggesting diminishing strategic importance of key shipping routes.
Ken Fisher on AI Bubble Warnings
Ken Fisher dismisses the Bank of England's warnings about AI bubbles, overvalued stocks, and market troubles, arguing that central banks lack meaningful insight into how future economic developments will unfold. He advocates for largely ignoring pronouncements from major central banks, claiming they are no more knowledgeable than average fourth graders despite their data and trained personnel.
Celebrating 250 Years of American Innovation
Ken Fisher celebrates America's 250-year track record of innovation and capitalism, arguing that the shift from Britain-centered capitalism in the 19th century to American-dominated innovation in the 20th and 21st centuries has produced transformative technologies and companies that benefit people globally. He attributes this American advantage to 'entrepreneurialism' or 'Yankee ingenuity'—the willingness to pursue unconventional ideas that often succeed and reshape industries.