What’s shaped financial markets in 2026 and what’s yet to come? Milford Portfolio Manager Mark Riggall joins Ryan Bridge for a clear, practical look at what is happening across global markets – from the dominance of US technology stocks and the role of AI, to opportunities in bonds, currencies and commodities. He unpacks what’s driven markets so far this year, where investors are seeing value, explains “market of stocks” and outlines key risks that could shape the outlook for the months ahead.

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Bridge talks Business: 14 July 2026
Episode Transcript

Ryan Bridge
Kia ora and welcome to episode 84 of Bridge talks Business with Milford. It is time for a six-month outlook. How’s your KiwiSaver balance going to look over the next six months? How’s the global economy going to look over the next six months? These are the questions I’m asking Mark Riggall from Milford. He’s a man in the know. And when he talks, I tend to listen. First, here’s your top five business bits.

    1. The Reserve Bank hiking 25 basis points, saying they’ll move us back to their perception of neutral. They said the economy’s improved, but inflation remains too high. Noting, though, this is more of a removal of stimulus rather than a tightening.
    2. Economic data in New Zealand seemed to support some of this view, with the PMI and the PSI both showing improvement, manufacturing in particular very strong, with details suggesting a broad improvement and forward-looking indicators getting better as well. Materially, business surveys data incoming will shed more light on that.
    3. The combination of better data and the RBNZ signalling hikes has helped lift the New Zealand Aussie cross off the lows. We’ve also seen short term interest rates back up toward the one-year highs helped by renewed conflict in the Middle East.
    4. The US re-initiated a tax on Iran last week after a lack of progress on the deal front. This has seen oil prices rise up to $83 a barrel sparking more inflationary concerns globally.
    5. Finally, this week we get some key data. US CPI, given hawkish comments from the Fed in recent weeks, watching closely. We also get the start of US company reporting, with the major banks releasing their quarterly results later this week.

 

Right, Mark is here. Let’s not waste any more time. Just a reminder, this segment is informational only and should not be considered financial advice. Mark, welcome back to the podcast.

Mark Riggall
Great to be here.

Ryan Bridge
Great to see you. Always good to check in. We’re halfway through the year. Thought we’d get you in and do a little sit-rep. So in terms of, let’s start with share markets, let’s start in the US. Obviously things have been going pretty well on the whole. How do you look at it?

Mark Riggall
Yeah, I mean, it’s been actually a reasonable year. We had a speed bump, obviously, with the Iran geopolitical crisis which caused a bit of a weakness in March and April, but the market took off really at the end of March. And we’ve actually had a reasonable year-to-date return from the US market. That’s not been all driven by the entire market. It’s a pocket of the market -technology – which has been the key driver of returns, but it has lifted the entire US market, given the weight of technology within US shares.

Ryan Bridge
You’ve described it as becoming a market of stocks. What do you mean by that?

Mark Riggall
Yeah, so normally when we think about share markets, they tend to kind of go up and down, all largely together. So stocks are what we call correlated. So when one stock goes up, other stocks tend to go up as well. What we’re seeing at the moment is actually when one stock or group of stocks goes up, another group of stocks goes down. And so the market or the index at a kind of top level doesn’t really change, but you’re seeing lots of volatility under the surface. And so we can think about technology as being one homogenous group, but it’s not acting like that. It’s acting like lots of different groups. Like you’ve got the Mag7 – like the Microsofts and the Metas and the Googles. And then you’ve got semiconductor companies, which are a separate group – Nvidia’s and your Taiwan semiconductors. And then you’ve got other tech hardware, like memory chipmakers like Micron or SK-Hynix in Korea. And then you’ve got software names, which are like Microsoft or ServiceNow or people like that. And these are all different groups. And when one of those groups is doing really well on a given day, chances are another of the groups is not doing so well. And you’re seeing lots and lots of volatility under the surface. So it’s a market of stocks. The stocks are really moving around of their own accord because of the idiosyncratic drivers of those stocks. But it means the index is actually quite calm at a top level. So it looks like there’s nothing going on. In fact, the opposite is lots going on with the surface.

Ryan Bridge
Underneath there’ll be a bunch of people making a bunch of money or not.

Mark Riggall
Honestly, it’s a day by day thing. It really is. And so we have seen trends, like there’s been semiconductors that have done reasonably well, but memory chipmakers have done fantastically well over the past six months, and over the last months started to see some volatility there as well.

Ryan Bridge
And what’s driving that? Because the whole AI revolution thing’s happening very quickly right before our eyes. The more we learn about how much we need different parts and components, is that kind of what drives that on a day-to-day basis?

Mark Riggall
Yeah, again, let’s step back and think about the drivers of share market performance. Well, ultimately shares are thinking about profitability of companies. So if companies are delivering good profits, then you tend to want to own those shares. And what we’re seeing is the market as a whole is delivering strong profit growth, year-over-year of 25% plus. And this is in the US. And that really is unusual because what normally happens at the beginning of an economic cycle – when you’re coming out of a depression or recession – you see a big acceleration in earnings. This is happening mid to late cycle. And it’s been driven largely by this technology boom. And so what we’re seeing is the hyperscalers – the Metas, the Googles – they’re all spending money, CapEx, and they’re spending it on semiconductor chips. So the profits of the semiconductor chip companies are going up, but they also need other bits and pieces to deliver this AI, like memory chips. And that’s why the profits of the memory chip makers are going up a lot. So what we’re seeing is a profits boom. Valuations of stocks are actually going down because the stock prices are not rallying as much as the profits are going up, which is kind of incredible, but that’s the situation we’re in. So valuations actually look reasonable, but we’re in a profits boom at the moment. And the question is, how long does that profits boom last for?

Ryan Bridge
What about the rest of the world? I mean, you mentioned Hynix, which is a Korean company, which listed on NASDAQ – valuation through the roof – but other stocks around the world.

Mark Riggall
Yeah, so I mean, Asia, like Korea, Japan, doing very, very well. That’s all caught up in the same technology boom that the US has largely got exposure to. So they’re kind of linked if you like. If you think about other regions like Europe, UK, Australia, New Zealand, a lot more muted. We don’t have as much exposure in those regions to technology. And so you’re just looking at your common garden or steady Eddie-type stocks that we used to be interested in before this AI boom came along. And they’re doing alright. You’re talking single, mid-single digit, high single digit returns over the first six months of the year, which is not to be sniffed at all. It’s actually pretty reasonable, but pales in significance compared to some of the returns that you’ve seen – or highly volatile but strong returns that you’ve seen – from the technology companies.

Ryan Bridge
Alright, so here’s the big question that I’m wanting to ask you is, so first half of the year, yeah, bit rock and roll, but a lot more rockin’ than rolling. What about second half?

 Mark Riggall
Yeah, so second half is where, normally we start thinking about top down, what are the big things driving the market? But actually it’s the nuts and bolts, it’s the nitty gritty, it’s the company earnings. So what are companies saying about how they can monetise AI? And if the one’s doing the spending, like all the hyperscalers, if they’re getting good earnings growth and can continue that spending, that sustains the technology boom even longer. If there’s evidence that people are using AI more and more, and companies that are supplying the AI, the LLMs, are actually monetising that, getting revenue from that in an increasing way, then that can sustain this boom further. And that’s a question we don’t know the answer to yet. We try and grapple around and get some data points around that, but over the next three weeks, next three to four weeks in the US, we get quarterly earnings reports and that’s gonna be a key guidepost for how this technology boom is gonna keep going or not for the next six months.

Ryan Bridge
Where are we at with – because there’s obviously a whole bunch of companies that list on the stock exchange who employ a bunch of people, employ a bunch of us – where are we at with this AI overtaking some of those jobs – that undermining the consumer, that having an effect on economies bottom lines? Are we anywhere near worrying about that point in time yet?

Mark Riggall
Yeah, so for a while there was a bit of a panic about we’re gonna see lots of jobs being lost because AI is gonna replace them. I think that panic has subsided somewhat. I think people are now coming around to the fact that AI is supplementing labour, not replacing labour. And so when people are doing things, using large language models, they’re doing things to help them be more productive in their role, but it’s not something that the AI could do of its own accord, you need someone there to drive it and use it. And so that means that you get more productivity, people are doing more with the same amount of labour, which is great for company earnings, but also you don’t get that kind of risk of mass redundancies on the other side.

Ryan Bridge
Yeah, phew, dodged it for now. Alright, so we’ve done shares, what about bonds?

Mark Riggall
Yeah, so kind of interesting as well, not quite as exciting as shares.

Ryan Bridge
Bonds never seem to be.

Mark Riggall
You know, we do have diversified portfolios and funds that do invest in bonds, and so we pay attention to those as well. And what we’re seeing is inflation is not going away, unfortunately. So we’re now in year six of elevated inflation and Central Bankers’ patience is wearing thin. And the latest inflation driver, of course, is oil price. We saw oil move from 50, 60 to over a hundred, and now it’s back to mid-70s. And so there’s been some volatility, but oil prices are being elevated and that’s lifting inflation. And inflation never really got back down to target. And so Central Banks have lost patience and are having to hike interest rates. They’re also able to do that because the employment market around the world is stabilising. And so Central Banks are largely comfortable that we’ve not got a labour market recession and inflation is too high, therefore they’re gonna have to hike rates. We saw that in New Zealand last week.

Ryan Bridge
Yeah, on that, now that the RBNZ is in a hiking cycle, certainly done with cutting, does that mean that our currency should appreciate as well?

Mark Riggall
Yeah, we’ve seen the Kiwi dollar being pretty weak really. And that’s because we had low interest rates here and our economic growth was pretty mediocre. And so people were happy to sell the Kiwi dollar and own other currencies, including the Aussie dollar where you were earning more interest from holding that currency. The change last week did change the fortunes for the Kiwi dollar. And we think that might persist for a little bit longer. So yeah, we’re more constructive on the Kiwi dollar against the Aussie and to a lesser extent against the US dollar, which has been quite strong this year.

Ryan Bridge
What about the big risks over the next six months? We have midterm elections in the US. And I was thinking about this this morning, knowing I was going to talk to you. Would markets be more worried if Trump gets more power out of the midterms and does more stuff, or has some power taken away and goes crazy? How do markets view such a – it’s obviously not a presidential election – but it’s a pivotal one in terms of power, right?

Mark Riggall
Yeah, that’s right. And we’ve seen over the last 18 months or so of this new Trump presidency, his willingness to try and dictate what markets are doing. The tariff episode came and he was willing to send equities lower, only then to come out and say equities are a great value, go and buy them and all of a sudden, we’re off to the races again. He did it again this year with the attacks on Iran. This is a market that’s talked up and down by this US administration, in a kind of greater way than we’ve ever seen before. And so what happens at the midterms, I think will be consequential, but we just don’t know yet. We’re a little bit far out. It looks like the Republicans are gonna take a beating, but given that much of the policies that Trump’s been doing has been just from the presidential office rather than involving Congress or the Senate, actually you could probably still expect a lot of those to continue irrespective of whether they take a beating or not.

Ryan Bridge
No, you’re right that the tariffs, a short war, I mean, these are things the President can do, right? Well, until the courts say you can’t. What about other risks to the economy, heading into the second half of the year? What else are you keeping your eye on?

Mark Riggall
Yeah, so the global economy is largely running reasonably well, and it’s not something we’re concerned about. We’re not concerned about a global recession anytime soon. Look, we’re kind of in and around trend growth, if you like, in most regions. If Central Banks have to hike much more then maybe that will weigh on that a little bit, but I don’t think anyone’s expecting, including ourselves, material economic weakness going forward. It’s really about this AI boom and whether that can continue bubbling away and bubbling, I think, is the right word. There are elements of this which kind of rhymes with what we saw during the dot-com boom. So that can continue for a while, but of course it creates risks on the other side. And arguably the volatility we’re seeing in some of the pockets of the market now are akin to what we saw in ‘98, ‘99, back in the dot-com boom. So that’s what we’re watching very closely. Technology as a sector is now such a large component of global share markets that it is, by definition, the biggest risk and the biggest thing that we’ve got to focus on.

Ryan Bridge
Excellent stuff. Now don’t make it six months before I see you again, Mark. Thank you very much for being with me.

Mark Riggall
Thanks very much.

Ryan Bridge
That was Mark Riggall, Portfolio Manager at Milford, talking to us about the six months ahead. Don’t forget you can like, follow, subscribe this podcast wherever you like to listen. Until next week, don’t forget to invest in yourselves.

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