Thursday 08/05/25

In Federal Reserve votes to keep US interests rates on hold (The Times, Robert Miller) we see that the Fed voted unanimously to keep US interest rates unchanged in the 4.25-4.5% range. Its interest rate setting group, the FOMC, justified this by saying that “Uncertainty about the economic outlook has increased further”. * SO WHAT? * Trump wants interest rates to be cut – because lower interest rates generally act as a stimulus for markets and for spending, and that makes Trump look good. GDP increased recently, but that’s probably because everyone scrambled to get imports before the tariff deadline came into force. Given all the uncertainties at play here, it’s probably just as well that interest rates were left on hold.

In war and defence news, Pakistan vows to retaliate after India launches military strikes (Financial Times, John Reed, Andres Schipani, Jyotsna Singh, Krishn Kaushik, Chris Kay, Humza Jilani and Myles McCormick) highlights further escalation in tensions between the two countries as Islamabad reacts to New Delhi’s air strikes, which themselves were in retaliation for last month’s attack on tourists in Indian-administered Kashmir. Pakistan’s PM Shehbaz Sharif said the country would “avenge every drop of blood” of over two dozen Pakistanis killed by the air strikes. If  you want to know more about how we got to this point, Why India and Pakistan are locked in a new military conflict (Financial Times, Krishn Kaushik and John Reed) is a good article that lays it all out. Essentially, a group of 26 people, who were mainly tourists, were killed in Pahalgam, a beauty spot in Indian-administered Kashmir on April 22nd. Indian police suspected that three Pakistani militants were behind the attack and that they were members of Lashkar-e-Taiba, a terrorist group believed to be related to another militant group called The Resistance Front (TRF). The TRF has been active in the Kashmir valley for the last four years, where they have ambushed Indian troops and boasted about it on social media. The first war between the two sides over Kashmir happened in 1948 but fighting has occurred there off and on ever since. Since he was re-elected in 2019, PM Modi imposed a military crackdown and jailed thousands of people, including political leaders, and all of this had a severely negative impact on relations between India and Pakistan.

Elsewhere, US wants UK military to focus more on Europe and away from Asia (Financial Times, Demetri Sevastopulo and Lucy Fisher) shows that The Pentagon now wants the UK to concentrate more on the Euro-Atlantic region and back off from the Indo-Pacific region in a reversal of the emphasis of the Biden administration. Biden’s lot had argued that increased European presence in the Indo-Pacific would help to mitigate Chinese military activity and lessen the likelihood of a China attack on Taiwan. Meanwhile, France and Germany to set up joint security council (Financial Times, Adrienne Klasa, Leila Abboud and Anne-Sylvaine Chassany) highlights a development yesterday following a meeting between President Macron and Chancellor Merz yesterday at the Élysée Palace. They both promised to reinforce co-operation on defence against a backdrop of Putin petulance and Trump truculence. It sounds like Merz’s first state visit abroad went more smoothly than the vote on his becoming chancellor 🤣.

In energy news, Danish firm shelves huge UK windfarm project over rising costs (The Guardian, Jillian Ambrose and Joanna Partridge) highlights further problems for Ørsted as the world’s biggest wind power developer has decided to cancel plans for the Hornsea 4 project, one of the UK’s biggest offshore windfarms, because of booming costs in its supply chain. This deals a huge blow to government plans to quadruple the UK’s offshore wind capacity by 2030. * SO WHAT? * It looks like the government is going to have to get involved to get things moving again – so we’ll see how serious it is about hitting its goals. Mind you, Miliband calls for car parks across Britain to be turned into solar farms (Daily Telegraph, Matt Oliver) suggests some out-of-the-box thinking that could help with the push to net zero – that solar panel canopies could be installed above parking spaces at supermarkets, offices and shopping villages. This sounds like a nice idea but there will be costs attached to this – and it might get worse if there is a concerted effort not to buy cheap ones from the Chinese!

In UK regulator to dilute mortgage lending rules (Financial Times, Martin Arnold) we see that the FCA outlined plans yesterday to dilute the rules on mortgage lending to make it faster, cheaper and easier to get a mortgage. Consumer groups cautioned that this increased risks of mis-selling and leaving borrowers more exposed but it means that lenders will have a free-er hand because they will have fewer obligations imposed on them. It will also ditch guidelines for lenders dealing with interest-only mortgages and related advice. Banks cheered the new developments. * SO WHAT? * This is a risky move because a lot of these guidelines were put in place to avert a future financial crisis – but then again if you want to have a more active property market and give more people the chance to own their own homes, then changes need to be made! I guess it’s just a case of shifting priorities. The problem is that caution means that those who do not have access to large lump sums and the Bank of Mum and Dad are frozen out because rising rents and the cost of living makes scraping together a deposit incredibly difficult.

Meanwhile, Trump tariffs ‘risk forcing Britons to delay retirement’ (Daily Telegraph, Szu Ping Chan) cites research by the Society of Pension Professionals which shows that savers’ pension pots could take a hit of up to 20% as a direct result of the effect of Trump’s tariffs on the market. This may mean that some people are going to have to put off retirement because their defined contribution pensions may be substantially invested in the stock market.

In leisure/entertainment news, AMC Entertainment Logs Wider Loss, Lower Sales as Box Office Hits Low (Wall Street Journal, Connor Hart) shows that the cinema giant announced a bigger

loss and weaker sales for Q1 as box office results fell to their lowest level since 1996 (excluding the Covid years). Despite this, the company is optimistic about the year ahead thanks to upcoming releases. Disney plans first Middle East theme park in Abu Dhabi (Financial Times, Christopher Grimes and Chloe Cornish) highlights plans for Disney’s first theme park in the Middle East in partnership with state-backed Miral Group. The park will be on Yas Island and will be Disney’s first new one since Shanghai Disneyland opened in 2016. An opening date has yet to be announced, though. * SO WHAT? * Investors clearly liked this as Disney’s share price jumped by 10.8%, although the company also announced a decent Q1 performance as well. Investors also liked its confident outlook although the company did refer to current conditions by saying that “uncertainty remains in the operating environment”.

Lights, camera, inaction: why film tariffs would be a flop (Financial Times, Lex) follows on from the whole 100% tariff on movies thing and pokes holes in his latest gambit. First of all, the industry is already in surplus to the tune of $15.3bn according to the Motion Picture Association – and exports were treble the amount of imports. Also, it’s difficult to put a tax on something that’s not a physical product. * SO WHAT? * By following through these threats on an industry that’s not in deficit, there’s a real risk that it could be a target for other countries wanting to push back on other tariffs, which would see that surplus shrink.

US scraps Biden-era rule that aimed to limit exports of AI chips (Financial Times, Michael Acton, Demetri Sevastopulo and James Politi) shows that the US is on the verge of ditching a rule that the previous administration implemented to restrict exports of AI chips. The rule was supposed to come into force on May 15th but the Trump administration said that it was too complicated, rendering it “unenforceable”. Trump’s chums want to overhaul the rule instead. * SO WHAT? * It seems that this administration is, in some ways, taking a more relaxed approach to the regulation of AI and other advanced technologies. Changes to the Framework for Artificial Intelligence Diffusion rules could be beneficial to the likes of Nvidia because implementation of them in their current form would restrict how much it could sell in countries including India, Switzerland and Singapore. We’ll just have to see what the new rules will be!

Alphabet shares slide as Apple seeks AI alternatives to Google search (Financial Times, Tim Bradshaw) is an interesting article that sort of follows on from the story I mentioned last week about the evolution of search as Alphabet’s share price took a 9% dive on comments by a top Apple exec who said that Apple was seeking out alternative search engines, such as Perplexity, for its AI-powered web browser. * SO WHAT? * This is baaaad news for Alphabet because it pays

billions to be Apple’s default browser so that it can get access to tons of users that power its ads business. As I said in the story last week, though, it seems to me that we are on the verge of a historic change to SEO – and Apple seems to be acknowledging this with its actions.

Elsewhere, Applovin Posts Higher Profit, Revenue as Advertising Business Continues to Scale (Wall Street Journal, Connor Hart) shows that the company which specialises in connecting advertisers with mobile game developers reported higher profits and sales over Q1 thanks to the ongoing growth at its ad business. The company’s share prices has almost quadrupled in value over the last year as some analysts reckon that Applovin could be the next TikTok because of its powerful AI that can harvest data on app users and use it to target their ads.

Then in British chip designer Arm latest to be hit by Trump tariff uncertainty (Financial Times, Tabby Kinder and Michael Acton) we see that Arm has joined the army of companies talking about tariff uncertainties meaning that they were unable to provide guidance for annual revenue. It reported its Q4 results yesterday and issued a conservative sales outlook. * SO WHAT? * The problem is that these results reflect the period BEFORE Trump announced that raft of “reciprocal” tariffs, which would explain the caution over the outlook…

In a quick scoot around some of today’s other interesting stories, Ford Increases Prices for Certain Vehicles Amid Tariff Uncertainty (Wall Street Journal, Connor Hart) highlights further tariff consequences as the company announced price rises for three of its popular vehicles – the Maverick, the Bronco Sport and the Mach-E. The increase in the suggested vehicle price will be somewhere between $600 and $2,000 per vehicle! The price rises will apply to the models above that were built after May 2nd. This comes just days after it withdrew its 2025 outlook and against the backdrop of a fall in Q1 net income and sales.

Staying with the subject of cars, Geely to take EV unit Zeekr private a year after New York float (Financial Times, Gloria Li and Kana Inagaki) highlights an interesting development for the Chinese carmaker as it has decided to take its Zeekr EV unit private just one year after it listed on the NYSE! Geely blamed the “increasingly complex economic environment”. * SO WHAT? * This is pretty embarrassing but I guess it’s just a sign of the times and a reflection of ongoing public apathy with regard to EVs at the moment.

Amazon’s Zoox to scale up robotaxi production for US expansion (Financial Times, Rafe Uddin) shows that Amazon’s self-driving start-up plans to increase production next year ahead of the commercial rollout of its fleet of robotaxis in the US. * SO WHAT? * This comes at a time when Trump’s administration just announced plans to make it easier to deply driverless cars on US roads. Increased production will help it to compete more effectively with Waymo, Zeekr and Tesla. It sounds like this venture is proceeding apace!

Uber Swings to Profit on Bookings Growth but Misses Revenue Estimates (Wall Street Journal, Rob Curran) highlights a swing to Q1 profit from a loss a year earlier, but it was less impressive than Wall Street analysts had been hoping. Separately, Uber announced a JV with China’s Pony AI to roll out robotaxis in Middle Eastern markets. * SO WHAT? * This sounds quite reasonable – but you also wonder how the competitive landscape will change in food delivery if the acquisition by DoorDash of Deliveroo goes through.

Back home, UK construction activity contracts for fourth straight month as costs rise (The Guardian, Phillip Inman and Julia Kollewe) cites the latest S&P Global PMI which shows that the rebound seen in the final quarter of 2024 evaporated as the sector faced political uncertainty and rising costs. Meanwhile, Rayner’s building blitz risks creating tens of thousands of uninsurable homes (Daily Telegraph, Louis Goss) cites worries expressed by the Association for British Insurers that government efforts to build 1.5m homes over the next five years could include houses built in flood zones which would be uninsurable. Talk about a gloomy sector!

Wegovy maker Novo Nordisk cuts profit forecast as US prescriptions tail off (The Guardian, Julia Kollewe) highlights a slowdown from the weight-loss drug maker as prescriptions in the US, which is its biggest market, seem to have peaked as they haven’t changed since February. Ironically, the success of its weight-loss treatments has been the nail in the coffin to another company in WeightWatchers files for bankruptcy as Ozempic hits demand (The Times, James Hurley) which says that WeightWatchers has now filed for bankruptcy protection to cut its debt burden. The business will continue to trade while it reorganises its finances.

This video must have taken ages to make! However, it does show you how to grow your own cherry tree from a single cherry pip! It’s a pretty amazing (well, to me, anyway!) process…🌱🍒