Monday 07/07/25

Benjamin Netanyahu and Donald Trump to discuss new Gaza deal at White House (Financial Times, Neri Zilber and James Politi) highlights the latest developments in the Israel-Gaza war. Netanyahu has sent a negotiating team to Doha to finalise a deal put together by the US to stop the fighting for 60 days, release 28 Israeli hostages and start talks about the end of the war while he himself headed to the White House. Trump said “we’re close to a deal on Gaza…we could have it this week”. He added that the two leaders would also discuss the Iran situation.

Meanwhile, Elon Musk launches US political party to fight ‘one-party system’ (Financial Times, James Politi) shows that Musk is coming good on his threat and announced the launch of a new political party on X – the America Party. He said that “the America Party is formed to give you back your freedom”. There were no details given and it’s not clear as to whether he’ll be a candidate for political office himself. Trump reacted by saying “Third parties have never worked, so he can have fun with it, but I think it’s ridiculous”. * SO WHAT? * Trump is right in that third parties have tried and failed to garner support in the US but given how divisive he has been and given how apparently useless the Democrats have been in response, maybe there’s a chance – particularly if Musk throws his vast wealth at it.

In trade news, China reroutes exports via south-east Asia in bid to dodge Trump’s tariffs (Financial Times, Peter Foster, Amy Borrett, John Reed and Andy Bounds) highlights China’s response to Trump’s tariffs. Although official figures from the US census bureau say that the value of Chinese exports to the US fell by 43% year on year in May, figures from the Chinese side

showed that overall exports actually increased over the same period because the shortfall in trade with the US was more than compensated for by a 15% rise in trade to the Association of Southeast Nations Trade bloc and a 12% increase to the EU. * SO WHAT? * The deadline for the pause on Trump’s  “reciprocal” tariffs is due to end this Wednesday and a lot of countries still don’t have a deal with the US in place. In the trade war with China during Trump’s first term, US imports from China fell but they increased from Vietnam and Mexico. This ended up providing Vietnam’s manufacturing industry with a massive boost – and it now looks like it’s getting another lift! Research from Capital Economics suggests that 30% more Chinese exports were rerouted via Vietnam in May versus May last year. It also looks like China exports are being rerouted via India as well. Will Trump turn a blind eye??

Then in Ministers to launch £500mn scheme to help struggling families (Financial Times, Jim Pickard) we see that the UK government is trying to take the initiative back again after backpedalling last week on its welfare reforms. Ministers announced a £500m scheme to help disadvantaged kids much in the same way a popular policy of the Blair government did back in the day. The government intend to roll out hundreds of “Best Start” family hubs which offer parental support and youth services across the country. New Labour’s “Sure Start” centres were set up in the early 2000s but many were closed in 2010 when the Conservative-led coalition had to cut back on public spending. That said, Sunak’s government last year introduced 400 “family hubs” with similar services offered across 75 local authorities.

In business trends, China snaps up mines around the world in rush to secure resources (Financial Times, Camilla Hodgson, Leslie Hook and Edward White) cites analysis by S&P and Mergermarket which show that there were 10 mining deals done last year worth over $100m, the highest number since 2013. This was confirmed separately by research from the Griffith Asia Institute which said that last year saw the most overseas mining investment and construction from Chinese companies since at least 2013. * SO WHAT? * It seems that the Chinese are upping the ante on the M&A front in anticipation of a worsening of the geopolitical situation! The most active Chinese mining groups in overseas deals include CMOC, MMG and Zijin Mining.Will the US and Europe be caught napping yet again after seeing what happened with rare earths and battery materials??

Japan’s shipbuilders look to consolidation to take on China (Financial Times, Harry Dempsey and Leo Lewis) shows that the country is making its biggest push in decades to revive its shipbuilding industry by consolidation and the injection of money from a proposed $7bn national fund. Japan’s biggest shipbuilder by revenues, Imabari Shipbuilding, said last week that it would take a 60% stake in Japan Marine United to form the world’s fourth biggest shipbuilder that would take on the likes of China State Shipbuilding Corporation and South Korea’s HD Hyundai Heavy Industries. It could also benefit from the injection of cash from a proposed ¥1tn public-private fund. * SO WHAT? * This is a reaction to China’s massive dominance in the shipbuilding industry. The country got 70% of the world’s ship orders last year versus 32% just 7 years ago and delivered quadruple the number of vessels as Japan. Interestingly, Washington approves of this as a counter to Beijing and might even support funding for shipbuilding.

I’ve been mentioning this trend before but London IPO fundraising falls to 30-year low (Financial Times, Emily Herbert and Patrick Mathurin) shows that fundraising from IPOs in London has dropped to its lowest level since at least 1995, when Dealogic data started to be collated. There have been just five listings in the first half of this year, raising a mere £160m. This is 98% lower than H1 in 2021 and even lower than 2009 levels in the aftermath of the global financial crisis. * SO WHAT? * Hopes of a 2025 revival in the IPO market have not materialised and there is a risk that London is being avoided because it’s increasingly being seen as a “loser’s” market. Companies cite poorer valuations versus a New York listing and deeper pockets of capital stateside. Recent analysis by the FT showed that European companies that add a US listing often don’t see any increase in their valuations but I guess that perception’s the thing here!

Consulting sector rebounds amid efficiency drives and AI adoption (The Times, Tom Howard) cites the annual industry report of the Management Consultancies Association which predicts that the industry will return to growth this year after companies cut down on expenditure on external advisers last year. * SO WHAT? * This growth is expected to be driven by companies looking to cut costs and improve cybersecurity. Defence consultants are also expected to be more demand this year as geopolitical tensions continue to ratchet up in Europe and the Middle East. There is also a definite trend to do more with less, including the use of AI.

Talking about AI, On-the-job learning upended by AI and hybrid work (Financial Times, Emma Jacobs) is an interesting article which contends that training for juniors is going to need to be much more deliberate as they won’t be able to be fobbed off with grunt work because that’ll be taken by AI. The good thing is that those who are AI-savvy will be able to add value by helping their less-savvy colleagues! Also, it’s possible that AI could help senior managers identify more learning opportunities with the help of AI. * SO WHAT? * This is all very well, but at the moment, increased AI adoption is one of the factors contributing to the falling number of junior roles being available. Employers’ appetite for hiring falls to a 13-year low (The Times, Patrick Hosking) cites the latest BDO Business Trends barometer which shows that hiring confidence has hit a new low as the effect of “Awful April” continues – another factor behind the relative lack of junior roles…

In consumer trends, Michelob Ultra Is the One Bright Spot in a Gloomy Beer Market (Wall Street Journal, Haley Zimmerman) shows that although beer is “having a bad year”, one rare bright spot is Michelob Ultra, the low-calorie, low-carb beer for health-conscious consumers. * SO WHAT? * It’s been around for over twenty years but its marketing seems to be working at the moment. In contrast to this, brands such as Modelo Especial, Bud Light, Coors Lite and Miller Lite have all seen their sales fall over the last quarter. It seems that the thirst for Ultra is tapping into younger-adult customers’ interest in moderation and the current heatwave.

In Elon Musk Is Running Out of Road in China (Wall Street Journal, Raffaele Huang, Lingling Wei and Yoko Kubota) we see more evidence of what we know already – that Tesla is losing ground in China and the evaporation of his clout with Trump means that he’s becoming less useful to Beijing. * SO WHAT? * Tech in cars made by Chinese companies is proving to be increasingly superior and battery evolution by the likes of CATL and BYD is making huge advances. Until Tesla gets full support for its Full Self Driving software, it’s unlikely to have any unique selling point. The other thing is that his latest stunt in creating a new political party is going to make it even less likely for Beijing to engage with him publicly.

Back home, UK carmakers on track to meet EV sales target despite intense lobbying to lower quota (The Guardian, Jasper Jolly) follows on from what I said last week about UK EV sales being on track and says that the pressure on manufacturers may be eased even further by

government plans to weaken the targets for this year. * SO WHAT? * Those behind the headline target of 28% of EV sales versus total sales – like Nissan, Toyota and JLR – will obviously benefit the most by this easing. Although EV sales are rising, this is still being powered by fleet buying as just 13% of private buyers have opted for fully electric this year, so there’s still a lot to do!

In car financing news, 23m people expecting compensation for car finance scandal (The Times, Patrick Hosking) highlights a very large number of people potentially looking to get compensation from mis-sold car loans sold between 2007 and 2021. According to Slater & Gordon, 45% of all UK adults are hoping that they’ll get some compensation. The Supreme Court is due to rule this month on a case that could open the floodgates to all sorts of claims for a very wide range of products.

In a quick scoot around some of today’s other interesting stories, Japan switches back to nuclear, 14 years after Fukushima (Financial Times, Harry Dempsey) highlights Japan’s re-engagement with nuclear after years of looking at alternatives in the wake of the Fukushima disaster in 2011. * SO WHAT? * Nuclear dropped from representing 30% of Japan’s energy mix to virtually zero in the years following. Japan is now planning to proceed with next-gen nuclear energy plants because rising power demand from data centres and booming gas prices are forcing the subject back to the forefront of Japanese consciousness. In the interim, Japan is reactivating reactors that were shut down following the disaster, a process that could take until at least 2030. At the moment 14 of the 54 have been reopened. Interestingly, it’s not so keen on SMRs because it wants to see how those work elsewhere first. I guess that at least part of this is because Japan gets a lot of earthquakes, so it’s extra-cautious.

Cyberattack gives Marks & Spencer an ‘opportunity for a reset’ (The Times, Isabella Fish) is quite a perky-sounding headline for the retailer that has suffered greatly from the cyberattack a few months ago. M&S has forecast a £300m dent to profits this year as it has lost ground to the likes of John Lewis, Zara, Next and H&M. * SO WHAT? * FWIW, I think that M&S has been on an upward trajectory and everyone wants it to do well, so I don’t see any reason why it wouldn’t recover. Badging this as an opportunity for a reset is really just another way of saying that the retailer is making the best of a bad situation. I guess it’s now a case of how quickly it can recover.

You will have noticed that my usual sparring partner for the Weekly podcast has been absent for a while recently. He’s been off in Canada downhill mountain biking!!! He’s taken a few videos from his GoPro and what he’s doing looks positively frightening (although he sounds very calm)! I’ve never done mountain biking because I know the way I ride I would definitely end up wrapped around a tree! I used to do road biking and triathlons (before I ate all the pies 🤣!) and particularly enjoyed descending, although there were two notable occasions where I came close to flying off mountains (once in the Pyrenees and once in the Alps!). I think that the fastest I ever went was 90km/h on a descent on Mont Ventoux and I was hanging on for life. I think that I could have gone faster but I chickened out! Fun fact: when descending big mountains, it is advisable to use the brakes as sparingly as possible because the wheel rims heat the brakes up at high speeds and your brakes then start to melt, which isn’t nice. That being said, these days disc brakes are the norm, so I’d assume they don’t have the same problem! Anyway, I always maintained that if I crashed on the road, at least the ambulance could get to me (and I’ve had that happen as well!) whereas if I was incapacitated in dense woodland it would not be possible…