This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Tax rules can change and benefits depend on personal circumstances.
They look at what’s driving gold volatility and the role gold can play in portfolios against a shifting geopolitical backdrop. The episode also covers earnings season, with insights from Microsoft, Meta, Apple and Tesla, and how Big Tech results and AI investment are shaping market sentiment.
Finally, they unpack the Federal Reserve’s decision to hold interest rates and what the outlook for US rate cuts in 2026 could mean for equities and inflation.
Use the player icons above to listen on your favourite podcast app, or read the full transcript below.
This podcast isn’t personal advice. If you’re unsure what’s right for you, seek financial advice. Pension and tax rules can change, and benefits depend on personal circumstances. Investments can fall as well as rise in value, so you could get back less than you invest. Past performance is not a guide to the future.
Full podcast episode transcript
[0:10] Emma Wall: Hello and welcome to Switch Your Money On from Hargreaves Lansdown, with me Emma Wall – Chief Investment Strategist.
[0:16] Matt Britzman: And me, Matt Britzman – Senior Equity Analyst.
And this week is your Investment Special – next week we’ll have the Personal Finance update. But the investment buyers have been full of activity this week. We’ve seen more volatility for gold – originally pushed past $5,000 per ounce – went up to $5,500 and is now back down on the recording, day-to-day, of 30th January. So, we’ll take you through what’s going on there and why. Plus, landing season is now underway, with some major stocks reporting the week we’re recording – and, just in case that’s not enough, we had the Federal Reserve decision to pause interest rates. So, we’ll be looking at all of that today.
Plenty to get our teeth stuck into, Emma – so let’s start with gold... what’s been going on?
[0:57] Emma Wall: It has been a rollercoaster start to the year. It’s difficult to imagine that we are still in January – we might be February by the time people are listening to this, but it has felt like we’ve had an entire year’s worth of news – and an entire year’s worth of potential gains from gold as well.
At one point, the gold price was up 30%, year-to-date – and year-to-date only being less than a month. But, yeah – ‘What has been driving that?’
So, a couple of things at play here. We’ve talked before about gold being a perceived safe haven – and what we mean by that is, when the world feels uncertain – when there is uncertainty around stock market prices, geopolitics, monetary policy – people tend to look to an asset that they believe will retain value. There are absolutely no guarantees of that, but that is how gold is perceived.
So, we’ve had some tactical reasons why gold has been doing better – and I’ll come onto those. It’s also, of course, the underlying strategic and systematic tailwinds that gold has been benefitting from – and, by this, I mean I’m talking about global central banks, which have been buying into gold – favouring gold over US dollars as a reserve choice, partly because of some of the geopolitics that are going on with the US... certain nations, for example, have looked at the threat of Russian dollar assets being frozen, and thinking, actually, they would like to decouple themselves from the US – and partly because the dollar has just been doing so poorly.
So, dollar didn’t have a great year last year – and, in fact, it’s been going on for a bit longer than that. It does precede Donald Trump being elected as President of the United States, but it has really accelerated – and, this week, we had something that was quite unexpected from Donald Trump, saying that he thought that dollar weakness was great – which, unsurprisingly, only pushed the dollar down further – and, because we have that kind of effect, when the dollar goes down, people further go into gold.
And so, we’ve had this expression of global sentiment really driving the gold price higher – and it hasn’t just been gold. We’ve also seen silver reach all-time highs, so far, this year – and even copper have a boost... copper, there, benefitting from industrial demand, but also the positive contagion around metals.
Now, the reason why we’ve seen some of this reverse, in the last 24 hours, is because some of the decisions – that we’ll come onto talking about for the future for the Fed Chair and who’s gonna replace J Powell – and what that might mean for interest rates – and, indeed US dollar strength and monetary policy for the US from there. But, really, what has been driving gold – in answer to your question – is sentiment has been negative on the US dollar, positive on gold, and a huge layer of uncertainty. Threats of 100% tariffs on Canada from the US, threats on tariffs and removing a great relationship with the UK – because UK Prime Minister is meeting with President Xi in China.
So, lots of threat – lots of negative rhetoric from the US President – and it’s having an impact on precious metals.
[3:56] Matt Britzman: Yeah – certainly feels like there’s a long and never-ending list of things that are going on.
What are we thinking for the rest of the year on gold, Emma?
[4:04] Emma Wall: It’s a good question – and we don’t think some of the extreme levels of outperformance that you’ve seen from gold will continue, but we do think that gold does have a place to play in portfolios when you have this level of uncertainty in markets.
You know, Donald Trump still has a number of years left in his presidency – and we do think there are certain calendar events, like the mid-terms, which could cause stock market volatility. So, having some ballast in your portfolio – particularly for those investors who are more cautious, approaching retirement – you know, thinking about capital preservation as what they want from their portfolio... We do think gold has a place to play, but we think it, very much, should be understood that this is a diversification factor in a portfolio, rather than an expectation that you’re going to see another 30% increase from here.
So, Matt, it’s now my turn to ask you some questions! We’ve had a big blockbuster week – big week for Big Tech – and that is one of your areas of specialism. So, turning our attention to earning seasons, what have been the key takeaways? – maybe take it stock-by-stock, starting with Microsoft.
[5:10] Matt Britzman: You know, heading into this earning season for Big Tech, one of the major things investors were looking at is, ‘What are these CapEx budgets gonna look like for 2026 and further out?’ So, that is, ‘How much money are these companies gonna be investing in things like the AI infrastructure buildout?’ And, almost to a tee, all of the major players are continuing that investment – even growing in most of the cases. However, investor reaction to results was very sporadic, to say the least – with some companies having a positive reaction and, others, the opposite.
Taking us, just broadly, across the companies that have reported so far... we had about 18% earnings growth in total. So, broadly speaking, [s.l. things 5:56] are moving in the right direction – but, like I said, some of those company-specific changes are really having an impact – and Microsoft, as you said, is a perfect example to start with. Results were good – as far as we were looking at it, revenue was up 15%, profit was growing – the Cloud Number, which is always important for Microsoft, at 38% growth for Azure... that’s a good Number.
Stock reacted pretty badly, on the day, to this – it was down over 10% at one point after the results. ‘Why?’ Well, in part, software is under pressure at the moment – and, obviously, Microsoft being a Cloud Drive on one side, but it’s also a software giant as well – with Microsoft 365, etc – and there’s a growing story, at the moment, that AI is gonna come in and disrupt a load of the software names.
We tend to think that this has been slightly overdone. Yes, ChatGPT, and Gemini, and all these language models are great – but it’s a very different story between coding something with natural language and building something like Excel, and running it, and distributing it.
So, you know, we think some of those concerns are slightly overplayed – and we think the stronger names in the software sector are actually gonna be net winners from AI and not net losers.
[7:07] Emma Wall: And who else reported this week? We had Tesla – which, of course, you’re a shareholder in – which had some big news for the market, didn’t it?
[7:14] Matt Britzman: Yeah – Tesla results were interesting.
So, it’s been a while now where the core business has been deteriorating – and that’s, in part, because competition is significantly more advanced now than it was perhaps five years ago.
So, the core numbers, themselves – they’re actually reasonably good, but investors have tended to look beyond that over the past few quarters, really, to the future. And Elon Musk and the Tesla management team had some important updates to share with investors on the earner score – the first one being a significant ramp-up in CapEx spend, over-doubling to $20bn across 2026.
Now, that is a step change from Tesla’s existing spend. Now, they’ve been progressing with their new autonomy journey for a while now, but this is the first time where we’ve really seen them put serious capital behind the next leg of that.
There’s a couple of ways to think about this. On the positive side, it suggests that they are very confident that they’ve solved autonomy – and they now wanna push the production of things like the Cybercab – which is a two-seater car without steering wheel or pedals... it either works with autonomy or it doesn’t. They’re pushing into the energy storage business more – they’re looking to get rid of the Model S and X, and replace that production capacity for ‘Optimus Robot,’ which is gonna be a product down the line.
And so, you know, that’s the positive take. There’s a slight negative take... oh, you know, maybe something that investors should consider – which is that we’re gonna enter a stage now where the free cash flow performance of Tesla is gonna very different to what it has in the past.
We’re expecting at least a year now on negative free cash flow reflecting all of that increased spend – potentially moving into 2027 as well. So, it’s something for investors to consider. It’s not necessarily a ‘Good’ or ‘Bad’ – it’s just it has to be considered in a factor of Tesla as a whole... that the capital structure – and investment that’s going into the business – is likely to change the financials.
Now, obviously, this is a company that trades at over 200 times earnings – so sentiment is everything for Tesla valuation at the moment. The positive news on that front is that we’re expecting to see a few more milestones over 2026, with robotaxis expanding into seven new cities – the Cybercab launch now, as I mentioned – and then the dangling carrot that is the ‘Optimus Robot’... that we’ll likely see an update in the first half as well.
[9:37] Emma Wall: The market didn’t love the news though, did it? Once the market opened, you did see Tesla shares fall on this news that there’d be considerably more CapEx than expected.
[9:46] Matt Britzman: Yeah – I think what we’re seeing is... Okay, this is a company that trades at a significantly high valuation – so there really needs to be a significant catalyst to push that further – and what we saw here is... I think investors now going away and digesting some of these numbers and really thinking about what this means for the future of Tesla – ‘cause it will look like a different business than it has for the past few years.
[10:05] Emma Wall: And now, Matt, it’s onto another ‘Tech bro’ – Mark Zuckerberg of Meta – another stock that you do hold shares in. What’s been going on there this week?
[10:13] Matt Britzman: Yeah – this was a really strong set of numbers from Meta. Actually, this is the second quarter in a row where they’ve really delivered with the core business.
The interesting thing about the Meta story is that it’s been under pressure for the past six months or so – and that’s, in part, due to Mark Zuckerberg’s pedal to the metal on AI investment – and that hasn’t stopped. So, we got a CapEx guide for 2026 – which is, at the top end, $135bn – and that’s enormous, by anyone’s standard – and this is gonna push Meta into the one of the biggest CapEx spenders across all of the big Tech companies.
Now, interestingly, whilst other companies are being punished for investing heavily in AI – and Microsoft, you might say, is one of those... this was actually a quarter where Meta was rewarded, I think – in part, because we can see the benefits of AI really starting to come through for Meta now into the core performance – you know, revenue up 24% this quarter... that’s expected to accelerate again into the next quarter. So, that idea of the law of large numbers doesn’t really seem to be applying right now – obviously, there’s no guarantee that that continues.
But, you know, we’re seeing sentiment come off what we think was a low point – and starting to recover as the AI investments start to yield real returns for Meta – and we actually believe that Meta is one of the most obvious examples of where AI is benefitting the business – and that’s perhaps not the case for some of the other big spenders at the moment.
[11:42] Emma Wall: And then, last but not least, we’ve also heard from Apple in the last 24 hours, haven’t we?
[11:46] Matt Britzman: Yeah, Apple – last night, as we’re recording – a really big iPhone sales number – which... you know, we were expecting a good number, but I think the growth in China was surprising to see.
Apple’s in an interesting conundrum at the moment – again, similar to Tesla, with a big 2026 coming up... Apple has exactly the same. The AI-story for Apple has, so far, been disappointing. The positive news for Apple is that it has, arguably, the best brand in the world – so consumers are still buying the latest versions of the iPhones, even though they fumbled the ball on Apple Intelligence – which is their AI layer for the phones. So, what we’re expecting to see in 2026 is a relaunched version of Siri – which, itself, has been a disappointing product.
So, an AI-Siri coming. They’ve got a relationship with Google now to use Gemini – which is Google’s language model – to back that up – which we think increases the chances that this is actually gonna be a success in 2026, but it does really need to deliver.
The brand gives it time – but, eventually, consumers are gonna demand a really strong AI product to go along with their iPhone – and, you know, Apple has to deliver that, I think, over the course of this year.
[12:57] Emma Wall: Thanks, Matt – really interesting. Those are the companies that... So, they don’t just move their owner share prices, but their dominance and their size also moves not just the US market – but, as you say, sentiment towards those tech stocks can really move the global market as well.
I mean, one stat I saw from JP Morgan earlier this week – which I thought was really interesting, though – is that, actually, that dependence on tech stocks and tech earnings is coming less so. So, JP Morgan suggest that, actually, companies across the board are upping their forward guidance for 2026 – what that means is US C-suites, basically, are feeling more optimistic about the year ahead than they were previously – and that Big Tech dominance is broadening out – which is a positive thing to see because it diversifies where investors are getting their gains from – which is a positive thing.
[13:43] Matt Britzman: Yeah – absolutely right. I mean, we know concentration risk across the Big Tech names has been something that’s been a hot topic of late – so it is good to see a broadening out across the wider market.
But, moving on, Emma – finally... I think we touched on it earlier, but the Fed made a decision to hold rates steady – this week that we’re recording, last week if you’re listening. What’s been the impact of that? – and then, perhaps, if you can put a bit more colour around the next Fed decision and what the impact that might have on markets.
[14:09] Emma Wall: Absolutely – and not just that, but breaking news, as we’re recording... it looks likely that Trump will be announcing the potential successor for J Powell as Fed Chair as well – so we can talk a bit about that.
So, as very much expected, the Fed did vote to hold rates at 3.75% this week – you know, that was in line with not just the market’s expectation, but also our house view. You know, we do think – particularly while J Powell remains Chair – that, actually, this sort of steady approach – very measured, very data-driven approach to interest rate policy will remain – and we expect, probably, around two cuts coming through 2026.
Now, I’ll caveat that heavily with... you know, our house view is based on the forward guidance that the current Chair has given – and this could change, if you get a particularly dovish – or somebody who likes rate cuts – coming in as Fed Chair.
Now, the market – because that move was expected by the Fed – has limited impact. What we have seen, as we’re recording today... the market reaction to that potential successor, so I will share a bit more information about that.
So, the rumoured – highly rumoured, although hasn’t been confirmed – will be confirmed, probably, by the time our listeners have our dulcet tones in their ear... is that there will be a new Fed Chair in the form of Kevin Warsh.
So, actually, was very much rumoured that Rick Rieder – who works for BlackRock – was gonna be the next Fed Chair – but, now, the rumour mill is that Kevin Warsh will be the next Fed Chair. So, he has a history of working in this area. What’s interesting is, previously, he had a very hawkish approach to interest rates – by which I mean, even when inflation was running at levels much lower than we have in the US at the moment, he was in favour of keeping rates high – so that was last time that he was a voting member – and, because of that, we’ve seen markets, in the last 24 hours, really react in anticipation he will continue to have that stance, if he’s elected.
So, you’ve actually seen treasury yields come up – you’ve seen share prices come down – however, we think this is potentially overplaying how his position from... Now, you’re looking over a decade ago, actually, when he was holding that position – and, actually, what the markets should pay more attention to is his public rhetoric in the last couple of years – where he has been very much on the side of Donald Trump, in saying that rates should be lower. So, although he hasn’t been a voting member in recent years, he has been in the market, vocal – saying, ‘Rates should be lower from where they are’ – and that is probably why – if Trump does elect him – he was leaning towards him... this more recent rhetoric versus his voting history.
[17:03] Matt Britzman: Thanks, Emma – yeah. I mean, as we know, Fed independence has been another hot topic recently, so it’s gonna be interesting to see how this one plays out.
But, before I let you go, it’s time for the random question of the week – and, this time, we’ll turn to Apple, and the question of how the founders came up with its name.
Three options for you:
Was it because Steve Jobs was on a fruit-based diet – and, at the time, he was trying to come up with a name?
Was it because he’d just visited an apple farm – and liked the idea?
Or was it because Apple was ahead of Atari in the phone book?
[17:35] Emma Wall: I thought I’d heard it’s because he was a great fan of Newton – [laughs] – so none of those answers are the ones that I would given!
I really don’t know, Matt – please enlighten me!
[17:47] Matt Britzman: Well, actually, Emma, it was, in part, a trick question because there’s been reports that all three of those are true – but I actually prefer your original answer.
[17:57] Emma Wall: Well, we learn something new every day with this podcast!
Before we go, I should say that this was recorded on 30th January 2026 – all information was correct at the time of recording. Nothing in his podcast is personal advice, and you should always seek advice if you’re not sure what’s right for you.
[18:12] Matt Britzman: Investments rise and fall in value, so you could get back less than you invest, and past performance is not a guide to the future.
[18:19] Emma Wall: This is not a recommendation to buy, sell, or hold any of the investments we’ve discussed today. No view is given on the present or future value, or price of any investment – and investors should form their own view on any proposed investment.
[18:30] Matt Britzman: So, all that’s left is for us to thank our Producer, Elizabeth Hotson.
[18:34] Emma Wall: And thank you to you, so much, for listening – we’ll be back again soon. Goodbye!
[18:38] Matt Britzman: And goodbye from me!