Category: Protected – UOL Spring 2023

Donald Trump says US close to deal with Iran and calls off strikes (Financial Times, Andrew England, Peter Wells, Kate Duguid, Bita Ghaffari and Abigail Hauslohner) shows the president talking a good game, saying that the two sides had “a great settlement of the war with Iran” and that he had called off new strikes. Is this real or did he just chicken out of his threats to attack and try to make it look good? The president said that the agreement will be finalised in the next few days…TBF, this sounds like the closest we’ve got to peace but I wouldn’t bet my mortgage on it. Let’s not forget that when the US and Israel launched the initial attack on Iran on February 28th Trump reckoned the whole thing would last for up to five weeks.

Meanwhile, Janet Yellen sounds warning over US debt and threats to Fed (The Times, Mehreen Khan) shows the former US Treasury secretary and Fed chief warning about the consequences of the US fiscal deficit which is just short of 6%, its highest level outside of wartime. She also expressed concerns about the independence of the Fed.

Over in Europe, ECB raises eurozone interest rates as Iran war stokes inflation (The Guardian, Phillip Inman) shows that the ECB has decided to bite the bullet and raise interest rates for the first time since 2023. It raised its main deposit rate from 2% to 2.25% as a result of the Iran-war-driven increase in inflation. The market is now expecting three rises before next spring. It remains to be seen as to whether other central banks will follow suit in making the hikes but it sounds to me like they’re preparing the ground for it!

Back home, Keir Starmer weakened by John Healey’s scathing resignation (Financial Times, George Parker, Charles Clover and Lucy Fisher) highlights the latest blow for the PM as his defence secretary and Armed forces minister resigned yesterday. He finally signed off on a four-year defence investment plan that he’d been dragging his feet on for months. Is this another sign of the end of Starmer’s leadership?

Then in commodities news, Gold sinks to 6-month low as speculative investors exit (Financial Times, Leslie Hook, Ramsay Hodgson and Ian Smith) shows that a combination of turmoil in the Middle East, expectations of interest rate rises in the US and the SpaceX offering pushed the price down to $4,022 per troy ounce, putting it on track to have its worst quarterly performance for ten years. The gold price has fallen by over 20% since the Iran war started. * SO WHAT? * I personally don’t think this is anything to get worried about because the world is still uncertain, wars are still raging and the gold price performance overall has been stellar. If you were a central bank and were sitting on an asset whose price had boomed that much, why WOULDN’T you sell?? Speculators also headed for the exit (but I think that’s also understandable). Some are saying that because gold’s lustre is fading at the moment, investors are putting their money into the next shiny thing – SpaceX. Let’s not forget that gold became the world’s biggest reserve asset by value at the end of last year, overtaking US treasuries!

Iran war tightens ‘super-squeeze’ in metals markets (Financial Times, Leslie Hook and Camilla Hodgson) suggests that prices of industrial metals including copper and aluminium are likely to stay higher for longer due to continued strong demand powered by datacentres, which use copper for wiring and aluminium for server racks. Copper is close to its highest ever highs while the aluminium price is at a four-year high. * SO WHAT? * Right now, the war has raised costs of operating mines because of the higher price of the diesel that’s needed to power trucks and other mining equipment. Beyond that, as you know, there’s quite the demand for anything to do with datacentres – and this will carry on for a good while yet! Another major source of long term demand is the overall move towards energy security, particularly in renewables, which means more demand for copper and aluminium.

Elon Musk’s SpaceX raises $75bn in world’s biggest IPO (Financial Times, Ryan McMorrow, George Steer and Amelia Pollard) highlights what is about to be the raging success of the world’s biggest ever IPO, which kicks off today. The order book is more than three times covered thanks to strong demand from asset managers, Gulf sovereign wealth funds, hedge funds and retail investors – so I’d imagine that the “greenshoe” option will be exercised (this is where they have some extra shares set aside that could be released if demand is particularly strong). * SO WHAT? * Long-time backers of SpaceX, long-only investors (i.e. investors who buy and hold for a decent length of time and don’t short stocks) and family offices will be prioritised in terms of share allocation. On the other hand, some hedge funds have already been told that they are likely to get fewer shares than they asked for. When I was involved in IPOs, we were often told that long-onlies would be prioritised because companies don’t like the idea of allocating hedge funds much because there’s always a danger that they will sell immediately or – even worse – short them. Fun fact: investors who buy in an IPO only sell as soon as trading begins are called “stags”. They do this to lock in gains immediately and rarely have an interest in holding shares for the long term.

How SpaceX could pull millions of savers into Musk’s orbit (Financial Times, Stephen Morris, Sam Joiner, Dan Clark, Clara Murray, Irene de la Torre Arenas, George Steer and Sam Learner) is a really interesting article which describes just how incredible this IPO is. It is triple the size of the previous biggest-ever listing and a $1.78tn valuation would make it the seventh biggest company in the world. Due to the nature of this IPO, Musk has secured special dispensation not to have to go through the customary year-long “seasoning period” that companies usually have to complete before being included on the benchmark indexes. They also

have to prove consistent profitability – but SpaceX doesn’t have to do that (well, at least not with NASDAQ and the FTSE indexes). The S&P indexes decided not to bend their rules, so maybe SpaceX will get another tailwind when SpaceX is allowed to enter its indexes in June 2027. * SO WHAT? * This means that SpaceX is going to get an extra boost because tracker funds, owned my millions of ordinary punters like you and me, HAVE to buy SpaceX shares because they are compelled to reflect the constituents of the indexes they follow. Musk will have the equivalent of 80% of the vote, because he will have special shares that give him outsize voting power and he will get a $1tn pay deal if he manages to get the valuation to $7.5tn and establishes a 1m-strong human colony on Mars! Talking of this trillion dollar pay deal, You Have No Idea What a Trillion Dollars Is—and We Have Proof (Wall Street Journal, Ben Cohen and Andrew Mollica) gives you some perspective of just how big a number this is! A trillion is a thousand billion. A million seconds ago was about two weeks ago. A billion seconds ago would take you back to 1994. A trillion seconds would take you back to the Ice Age 🤯! Mind-boggling, don’t you think?!?

Meanwhile, Jeff Bezos says AI will bring ‘golden ages’ not mass job losses (Financial Times, Cristina Criddle and George Hammond) shows the billionaire founder of Amazon trying to argue the case for AI not taking jobs – but offering opportunity! He said that his new $41bn AI lab Prometheus would use the tech to change the face of manufacturing and engineering. * SO WHAT? * While many fear that AI will destroy huge numbers of jobs, Bezos reckons it’ll create a labour shortage and so net-net it will create more jobs than it destroys. On the other hand, Anthropic’s chief, Dario Amodei, reckons that the impact will cause devastation and suggested that higher capital gains taxes might be needed to fund universal basic income as a direct result of the jobs-pocalypse. Hmmm.

I know that the media have done their best to keep it quite but apparently there’s a small football competition that started yesterday 😁! ITV says its biggest-yet World Cup is a ‘six-week Super Bowl’ for advertising (The Guardian, Mark Sweney) reflects ITV’s projections that the World Cup will be the most lucrative sports event that ITV has ever aired. Right now, revenues from the tournament are running about 30% higher than they were for Euro 2024! Some media sources claims that a 30-second commercial in an England game could cost up to £300,000! Prediction market wagers on World Cup winner climb to $2bn (Financial Times, Stephanie Stacey) shows that it’s not just advertising that’s going to benefit from this kick-about – the likes of Polymarket and Kalshi are also going to do well. So far, prediction markets have taken bets worth almost $2bn on who will win the World Cup! This is already close to being the biggest market in history – and we’ve still got five/six weeks to go! Some gambling execs have described this as the “biggest betting opportunity” in history! * SO WHAT? * The World Cup is going to provide a welcome boost to some against a difficult economic backdrop. For firms around the UK, a lot of the success of their business will be riding on how long England and Scotland can last. As for prediction markets, the game here will how much market share they can take from the traditional names in sports betting like Entain and Flutter.

Meanwhile, in air travel, Emirates to offer insurance to tempt passengers back to Dubai (Financial Times, Peter Campbell) shows that concrete efforts are now being made to get people to fly to Dubai once more as multiple governments are still advising against travel to the region. Emirates is offering to fly people home, even if it means using other airlines, to try to calm traveller fears that they’ll be stranded if the conflict flares up. At the moment, around 40,000 people per day are transferring through Dubai’s airport – a number that’s down significantly from the 100,000 before the war started.

Elsewhere, Wizz Air threatens to cut UK routes over tax rises (Daily Telegraph, Christopher Jasper) reflects threats by the CEO of Wizz that the company will have to cut UK routes if the government insists on increases in Air Passenger Duty (APD). At the moment, APD is £15 for an economy class ticket to most European destinations so it can be a significant chunk of a cheap airline ticket – hence the threat!

In a quick scoot around some of today’s other interesting stories, CLSA name to vanish after four decades in Asian brokerage (Financial Times, Leo Lewis) heralds a sad day for the once-mighty CLSA (Credit Lyonnais Securities Asia) that was bought by the Chinese state-owned investment bank Citic Securities in 2013. CLSA was founded in 1986 by two journalists and expanded rapidly to become a force to be reckoned with in Asia, but the firm will cease using the name CLSA and refer to itself as Citic from Q2 next year. I guess this was inevitable but it is a bit sad!

Then in LIV Golf events in doubt as Saudis drip-feed funding (Financial Times, Samuel Agini, Sujeet Indap and James Fontanella-Khan) we see that Saudi Arabia’s PIF sovereign wealth fund has only contributed about $200m of the $600m that LIV golf needs to get through to the end of its current season. Is this the beginning of the end of the relationship and a sign that the PIF is now quietly walking away??

I grant you, this is a bit random, but I think you’re going to like this horse playing the drums! However, it’s not quite as good as the Cadbury’s gorilla playing them back in the day!

US launches fresh wave of strikes on Iran (Financial Times, Myles McCormick, Abigail Hauslohner and Bita Ghaffari) shows that the US has launched a new barrage of attacks on Iran and Iran says 20,000 people left without water after US hits reservoir tanks (Financial Times, Bita Ghaffari) reflects the result of this latest development as US airstrikes destroyed two storage reservoirs. This has been the most serious attack made since the “ceasefire” of April 8th.

In Trump says ‘I love the inflation’ as rate rises to 4.2% amid Iran war pressure (The Guardian, Gaya Gupta) we see that the president has expressed his feelings for price rises as the latest data showed that inflation rose for the third month in a row to hit 4.2% in May, its highest level in three years! He claimed responsibility for oil being at $85 a barrel because America’s military is getting tankers through the Strait thanks to them “destroying” Iran’s radar systems but then China Is Propping Up the World Economy by Importing a Lot Less Oil (Wall Street Journal, Rebecca Feng) suggests a more plausible explanation for why the oil price isn’t a lot higher – it’s because China’s crude oil imports have dropped dramatically since the start of the Iran war. To give you an idea of the scale of this drop, it is the equivalent of the combined daily consumption of Italy and France! Some are saying that this can’t go on forever and that China is going to have to increase purchases in the next few months.

Meanwhile, Donald Trump suggests he may not renew trade deal with Mexico and Canada (Financial Times, Aime Williams, Christine Murray and Ilya Gridneff) shows the president in “deal mode” as he just decided to stir things up a bit by saying that he may not renew the

existing agreement for 16 years by July 1st. * SO WHAT?  * If he follows through with this threat, it would mean that the agreement would have to be renewed on an annual basis. He went on to say that “we don’t need anything that Canada has, we don’t need anything that Mexico has, but they need everything that we have, so they have to treat us better”. Just. Wow.

Then in Trump’s AI fund idea is good politics, but bad economics (Financial Times, the editorial board) we see a bit of a discussion about whether the idea that Trump floated recently – that the government should take equity stakes in AI companies – is a go-er or not. * SO WHAT? * On the one hand, it’s good that society should share in the gains from the technology but then on the other hand it makes the tech companies even more powerful than they are already. Also, setting up such a sovereign wealth fund brings up a lot of conflicts of interest issues (but the Trumps aren’t averse to that – just look at their involvement with bitcoin!) and everything’s great when the sector is going up – but if the wheels fall off, it’s taxpayers who are going to suffer. Discussions about this are ongoing…

Meanwhile, US tech stocks sink as volatility flares up on Wall Street (Financial Times, George Steer) highlights tech sector weakness in trading yesterday ahead of tomorrow’s SpaceX IPO. I’m quite surprised at how negatively this is being taken given how strongly the sector has been performing. When you have massive equity raisings like Google’s and the prospect of a number of mega-IPOs taking place in quick succession, surely there are a lot of investors out there selling out of some of their tech holdings with a view to participating in tomorrow’s SpaceX bonanza??

There’s quite a lot of defence-related news today! Lockheed Martin cannot say when US allies will get Patriot missiles (Financial Times, Laura Pitel) follows on from what I said earlier this week about the massive delays in delivering the Patriot system and says that the company are unable to tell US allies exactly when they will get deliveries despite the fact that the company is committed to tripling capacity. They are suffering from a supply crunch which is being made worse by the war in Iran. Interestingly, Ukraine builds cheap alternative to US Patriot missiles (Financial Times, Charles Clover, Fabrice Deprez and Christopher Miller) shows that Ukrainian arms maker Fire Point has just come up with a new surface-to-air missile that it cheaper and can be produced at scale – from August, ready to ship by 2027. Talking of backlogs, Japan’s defence and turbine titan scrambles to keep up with $82bn order backlog (Harry Dempsey and Leo Lewis) shows that the usually sleepy Mitsubishi Heavy Industries has found itself in the middle of an AI and defence storm and has been inundated as a result while Mercedes-Benz set to partner with drone defence start-up Tytan (Financial Times, Laura Pitel and Sebastien Ash) shows that the luxury car maker is going to turn its hand to defence manufacturing as it signed a memorandum of understanding with Tytan Technologies yesterday to provide vehicles for a mobile air-defence system that targets small first person view (FPV) drones. This system, called Drone Defender, will use a Mercedes Sprinter van and a military version of its G-Class SUV as the chassis for the weapon. * SO WHAT? * As I keep saying, the defence sector is experiencing a huge renaissance thanks to the shock of Trump’s NATO threats and rising military activity. Established players are getting inundated with orders from governments that have suddenly increased their defence budgets and manufacturers are having to come up with new innovations all the time in order to adapt to current circumstances. I believe that there will be a lot of consolidation in the sector because the big players will feel confident about longer-term demand and will perhaps be free-er with the finances because they know the orders are there. I think that

they will want to scale up and round out their product offerings while smaller, more specialist, players will want the advantages of being part of a bigger group.

Trump’s Iran war has propelled China’s cleantech industry (Financial Times, Edward White) goes into a bit more detail about what we know already – that Trump’s war has proved to be the latest reminder that more energy independence is needed – and that China’s excellence at cleantech is proving to be a stroke of genius. After years of stellar growth, the likes of BYD and CATL have suffered a bit at the beginning of this year due the phasing out of subsidies and the backlash against the companies’ poor treatment of suppliers. Fierce price competition and over-investment by local governments all added to the woes. Overseas markets had been putting up barriers to protect their own but then when the Iran war kicked off, the demand for Chinese cleantech shot through the roof. Sales of solar cells and battery-powered vehicles have been super-strong as a result. * SO WHAT? * The longer this war goes on, the more likely it is that the trend for cleantech will last. For now, I think that the Chinese reign supreme but I’d also like to believe that it’s possible that non-Chinese companies will take heart and seize the opportunity to make their own dent in cleantech and lean into the current momentum.

Meanwhile, China’s BYD aims to be world’s biggest car firm within five years (The Guardian, Lisa O’Carroll) shows that the Chinese car giant stated its ambitions yesterday to topple Toyota from its position as the world’s biggest carmaker within the next five years. BYD’s founder said that he believed the company could achieve this via the rapid progress being made in battery tech and fast charging in addition to increasing production overseas. The company added that it would pour almost £1.8bn into Europe to grow infrastructure for five-minute “flash charging” of its cars. It all sounds very exciting!

This was a story that I missed yesterday, so I thought I’d mention it! Anthropic releases ‘safe’ version of Claude Mythos AI model to public (The Guardian, AFP) shows that Anthropic has unleashed a new version of its much-feared Mythos model, called Fable 5, that is aimed at helping the writing and debugging of software. It can also answer complex research questions and analyse images. Unlike the model it released in April, which shocked the world and was only released to a handful of governments and organisations initially, this is available to the general public. This is amazing and will surely add to Anthropic’s credibility.

Oracle to spend $70bn on data centre build-out in coming year (Financial Times, Rafe Rosner-Uddin) highlights the latest Big Tech company to announce a massive splurge on AI infrastructure despite its rising debt and underwhelming revenue guidance. A 25% capex increase was in line with market expectations but investors weren’t best pleased!

In How tin went from baked beans to AI gravy train (Financial Times, Lex) we see another

example of an AI beneficiary that isn’t immediately obvious – tin! It is the “glue” that holds together all the racks, power modules and networking switches in the AI infrastructure. Almost 75% of the world’s tin is mined in just three countries – China, Indonesia and the DRC. Speculative interest in the metal has been increasing and the world’s governments seem to be waking up to the importance of tin. You do wonder whether this is going to be cobalt and lithium all over again??

Meanwhile, Palantir ban means hundreds of frontline police will be lost in London, Met commissioner warns (Financial Times, Robert Wright) gives us the latest reaction to Sadiq Khan’s rebuttal of the Met’s use of Palantir – this time from the police itself. Its commissioner said that this alone will mean that 700 officers will have to be removed from the frontline because the job reductions that would have been possible with Palantir’s software being used now won’t be.

In a quick scoot around some of today’s other interesting stories, Mike Ashley’s Frasers offers to buy Hugo Boss in €2.7bn deal (Financial Times, Ivan Levingston and Ashley Armstrong) shows that Frasers is making an audacious bid to buy the 74% of Hugo Boss that it doesn’t already own – all in cash. Frasers has been building up its stake since 2020. * SO WHAT? * Frasers Group’s Mike Ashely loves a deal – and he’s been biding his time. I don’t think that this will be too much of a surprise to anyone and it’ll be interesting to see whether any other bidders will come out of the woodwork. The boards are now considering the offer.

German start-up Neura raises $1.4bn in humanoid robot push (Financial Times, Sebastien Ash and Ivan Levingston) shows that Neura Robotics just raised a chunk of cash that will make it one of Europe’s best funded and most valuable AI start-ups. It now has an implied valuation of $7bn. The company develops industrial AI applications “out of Europe for the world”. Neura is taking on rivals such as Unitree and Tesla. In Europe, rivals include Agile Robots, Hexagon Robotics and Flexion. It remains to be seen as to whether humanoid robots really are the future…

Back in the UK, WH Smith’s American misadventure that sent share price crashing (The Times, Guy Taylor) highlights the company’s second profit warning in just a few months and it’s now asking shareholders for about £100m to bolster its balance sheet. The share price fell by over 15% initially on the news. WH Smith has gone from hero to zero thanks to two things – firstly, there was an accountancy scandal at its US business last year and, secondly, the Iran war broke out – which decimated footfall at airports. Ouch…

Estate agents say sales activity may be ‘beginning to stabilise’ (The Times, Tom Howard) cites the latest RICS survey which reflected a subdued market while some estate agents are hopeful

that things are bottoming out in the market because they haven’t got any worse.

Pub chain Fuller’s hopes for bumper summer of World Cup and staycations (The Guardian, Mark Sweney) highlights the hopes of all pubs at a tough time for the hospitality industry. * SO WHAT? * The evening kick-off times for World Cup matches should be a positive (England matches tend to have 9pm or 10pm kick-off times) because it won’t cannibalise normal summer trading. I would also suggest that there’s ample time for people to get to the pubs early to get seats and/or tables which means that they are going to drink more. Another potential boost could come from more people staycationing because of the rising costs of flying and the faff at airports. The whole hospitality industry will be praying for a strong three months (of which the World Cup will last for six weeks)! I believe that most – if not all – matches are on terrestrial, so there is a danger that consumers will be more inclined to drink at home where the beer is much cheaper!

Supermarkets take £800m hit from fat jabs (Daily Telegraph, James Warrington) cites research from Worldpanel which shows that supermarkets took a sales hit last year due to the rise in popularity of weight-loss jabs! The report estimated that customers who were on the drugs cut their grocery spend by £418 per household on average in the year after starting treatment. It also found that 6.3% of British households now have at least one current member using the treatments. This is a significant rise from 2024, when 2.3% of households were on it. Unsurprisingly, spending on unhealthy snacks – like crisps and chocolate – was worst hit. * SO WHAT? * This is bad news for snacks and beverages makers, but this is increasingly being priced into expectations. It’ll be interesting to see whether this is a fad or something that the companies will have to live with long term.

As we can see from this video, you can’t play a player!

US launches strikes on Iran after downing of American helicopter (Financial Times, Andrew England, Peter Wells and James Politi) shows that things are getting worse in the Middle East as US Central Command said that it had “completed self-defense strikes” against Iran after Iran shot down an American helicopter. So much for progress!

Then in markets news, Nasdaq slips in volatile trading as 2026 high-flyers pull back (Financial Times, George Steer, Kate Duguid and Emily Herbert) shows that tech stocks weakened in trading yesterday ahead of Friday’s SpaceX IPO and Earnings, not valuations, are fuelling the US stock market (Financial Times, Ben Snider) provides an interesting view of why US markets are so strong at the moment despite all the instability, doubt and debt we’re seeing! Basically, they’ve been powered by the strength of earnings rather than rising valuations or speculation. The recent Q1 results season reflected pretty decent growth while forward-looking earnings estimates also look strong. Wall Street analysts have been upgrading S&P500 earnings in both 2026 and 2027 and it is notable that upgrades are outpacing downgrades in every sector! AI investment spending is a huge driver of corporate earnings strength so far and analysts reckon that the five biggest hyperscalers – Alphabet, Amazon, Meta Platforms, Microsoft and Oracle – are going to splash out $755bn on capital investment just for this year! One thing that is making investors increasingly nervous is the increasing concentration in the market – the S&P500’s ten biggest companies make up 41% of the market cap of the index. This is the tightest concentration in decades. For now, things look good despite the uncertain geopolitical backdrop –

but there are lots of potential banana skins out there.

China factory gate prices rise at fastest rate in 4 years (Financial Times, Thomas Hale) cites the latest official data release of the producer price index from China’s National Bureau of Statistics which showed the biggest jump in growth since July 2022 as it expanded for the fourth month in a row. This is mainly due to higher global energy prices. Separately, official stats showed that exports from China grew by 19.4% in May as shipments to the US boomed compared to the previous year. * SO WHAT? * All in all, it seems like China continues to trundle on despite Trump’s best efforts to limit its progress. That being said, China still can’t quite shake off the property sector problems and confidence remains stubbornly weak.

Back home, Reeves opens door to tax rises to fund defence (Daily Telegraph, Szu Ping Chan and Tony Diver) shows that the Chancellor sounded like she was open to the idea of raising taxes to fund defence spending whilst ruling out borrowing as a way to raise the necessary funds while Keir Starmer to tell ministers to quit if they back Andy Burnham (Financial Times, George Parker, Jim Pickard and Jennifer Williams) shows Starmer getting feisty as we head towards a potential leadership battle. It sounds like he’s going to threaten party members that they need to resign if they want to support one of his rivals. All of this could mean that we’re in for a summer in political limbo – not good at such a crucial time for the economy…

In GSK to buy US cancer biotech Nuvalent for $10.6bn (Financial Times, Oliver Barnes, James Fontanella-Khan and Aanu Adeoye) we see that the pharmaceutical group has agreed to buy Nuvalent in a $10.6bn all-cash deal in what will be its biggest acquisition since it bought Novartis’s vaccines business in 2014 for $20bn. The biotech owns two late-stage cancer drugs which have been described as “potential best-in-class assets”. GSK said that the rationale of the acquisition was partly down to taking the edge off its HIV medicine dolutegravir going off patent in 2028. * SO WHAT? * There’s been a definite uptick in biotech deals – almost $211bn worth were struck between the start of the year and early June, according to Dealogic data, which implies that 2026 is going to be a bumper year. GSK’s $10.6bn cancer deal will lead to more (Financial Times, Lex) applauds the deal and suggests that GSK’s got enough financial firepower to make other acquisitions and, given that it is aiming to achieve an extra 25% in sales by 2030, it has the will.

VodafoneThree plots TalkTalk takeover (Daily Telegraph, James Warrington) shows that VodafoneThree is looking at buying the consumer division of troubled broadband provider TalkTalk. Other potential buyers are in the mix as TalkTalk put itself up for sale while it wrestles with booming debt costs. The company has been borrowing heavily in order to continue functioning.

Elsewhere, Boots in £7.5bn sale talks with billionaire family behind Primark (Daily Telegraph, Tom Haynes) shows that the high street stalwart is now considering selling itself rather than waiting to do an IPO. The billionaire Weston family, who own Primark, is considering a bid, as is Sigma Healthcare, an Aussie Pharmaceutical group. We’re still in the relatively early stages so it’s not worth getting too excited at this point – but it is interesting that it’s considering options other than flotation.

As we head towards flotation day this Friday, SpaceX’s $1.78tn IPO asks investors to buy Musk’s moonshots (Financial Times, George Hammond) acknowledges the fact that SpaceX’s stellar valuation is mainly down to the company achieving hugely ambitious targets that include reaching Mars with reusable rockets, putting datacentres into orbit and the growth of its role as a key player in AI development. SpaceX Employees Get a Crash Course in How the Rich Handle Money (Wall Street Journal, Miriam Gottfried and Ashlea Ebeling) is an interesting article that highlights “a nice problem to have” as SpaceX employees are wondering what to do when they get their shares – do they crystallise the value and sell them as soon as they can – or do they hang on for the full ride?? I suspect that wealth advisers who cater to tech employees are going to be very busy in the next few months!

The unlikely corporate winners of AI (Financial Times, Clara Murray) takes a look at what companies – other than the tech ones – are doing well out of the AI boom. Beneficiaries include Caterpillar, which supplies generators for datacentres and Nucor, a steel supplier. Ford saw its share price boom by about 20% in May when it announced that it would pivot from its EV business into battery storage for datacentres. It seems that investors are increasingly looking beyond names in chips, memory and software and considering industrial players who will benefit from the enormous build-out. You should definitely read the full version of this article if you have access – it has some very cool graphics on this topic. Companies involved in cabling, power generation and management, air conditioning and liquid cooling are among the areas seeing a huge uptick in interest. * SO WHAT? * Although the numbers that get bandied around with AI are nosebleed-inducing, it certainly feels like the momentum is going to continue. If I wanted to feel ultra-safe about things, I think that, out of everything, power generation is the place to be in AI because the whole shebang depends on electricity. The great thing about this is that our need for

electricity is only going to grow – and if there’s any slack, it will be taken up by everyone buying EVs and needing to charge them! FWIW, I think that chip demand may peak out as technological advances make them ever more efficient – but power is always going to be needed.

Back in reality, Multibillion pound data centre project risks collapse over government delays (Daily Telegraph, James Titcomb) cites British data centre company Era4 as saying that government delays are putting a multimillion pound AI data centre project in Wales in jeopardy. The government’s AI minister has so far failed to give it permission to get power from a nearby battery plant. Our energy system operator, NESO, said that it can’t give permission until it gets the go-ahead from the government. Era4 says that the situation is getting so bad that it might have to look at other sites outside the UK. Starmer needs to get on it pronto. It sounds like SMRs all over again…

Meanwhile, Palantir to sue Sadiq Khan over blocked £50m Met police contract (The Guardian, Aisha Down and Rajeev Syal) shows that the controversial US spy-tech company is, somewhat predictably, going to challenge the London mayor’s intervention in killing off its attempt to provide the Met with its software. We’ll have to wait to see whether this really does kick off…

Then in Brussels orders Meta to open WhatsApp to rival AI agents (Financial Times, Barbara Moens) we see that the European Commission has ordered Meta to restore access to WhatsApp for rival tech companies who are building AI assistants, saying that emergency action is needed to stop it from snuffing out the competition. * SO WHAT? * This follows an antitrust investigation that came about due to concerns that Meta was using its control of WhatsApp to prioritise its own AI services. Meta said that it would appeal the decision.

In a quick scoot around some of today’s other interesting stories, Renault to cap defence revenue at 5% as it pushes into drone making (Financial Times, Sarah White) shows that the French car maker wants to draw a line in the sand when it comes to its drone manufacturing and other defence ventures and put an upper limit on its activities. This comes as struggling carmakers are looking for ways to make money because their core business is taking a pasting from Chinese rivals.

Then in Driverless car start-up Wayve eyes London private market (The Times, Chris Dorrell) we see that Wayve, which develops software for driverless vehicles and is one of the UK’s most valuable start-ups, is looking into the possibility that its early backers could trade its shares on the London Stock Exchange’s private securities trading platform, Pisces. * SO WHAT? * They’re not at the decision stage yet, but this could be a real coup for the LSE that could do with some tech sector love. Pisces (Private Intermittent Securites and Capital Exchange System) was launched in March to govern trading in private companies, with a view to providing a smoother route to a full-blown flotation.

GM bets on homegrown battery tech to challenge Chinese dominance (Financial Times, Kana Inagaki) shows that the car maker is developing new battery tech using sodium ions to grow its

energy storage business and will partner up with Peak Energy, a US start-up, to scale it up. It aims to leapfrog Chinese rivals who dominate the sector. * SO WHAT? * This comes just a month after Ford announced the pivot I described above and it sounds like it could be very interesting! Battery storage is such a key area because you can have all the generation you want – but if you can’t hang on to the electricity you make and distribute it efficiently you are always going to limit your upside. Sodium ion batteries use sodium salt, which is more common and cheaper than lithium. The batteries can also work at very high and low temperatures, so there’s not need for an active cooling system that uses tons of energy. CATL and BYD are already among the world’s biggest players in this area, so it’ll be interesting to see whether westerners can muscle-in here.

Then in Airbus plans German-led alliance to replace doomed fighter jet (Financial Times, Aaron Kirchfield, Sylvia Pfeifer and Laura Pitel) we see that a group of eight aerospace and defence companies led by Airbus – Autoflug, Diehl Defence, Hensoldt, Liebherr, MBDA, MTU Aero Engines and Rhode & Schwarz – are planning to develop a European alternative to the Franco-German fighter jet initiative that I mentioned yesterday. The German-led group is called Team Gen 6. We’ll have to see whether this works out.

Here’s the proper way to open a bottle of champagne (from a French bloke – so this is defo legit) and then there’s the fun way! I’ve never seen this done live but I’m sure it causes a bit of a stir!

Israel and Iran halt counterstrikes (Financial Times, James Shotter, Najmeh Bozorgmehr) shows that the two sides have stopped attacking each other for the moment, following flare-ups on the weekend, apparently after pressure from Trump. He said that negotiations were “proceeding”.

In defence news, Berlin pulls plug on Franco-German fighter jet (Financial Times, Anne-Sylvaine Chassany) shows that plans to develop a joint fighter jet are now dead after efforts from Chancellor Merz and President Macron could not overcome clashes between France’s Dassault Aviation and Airbus’s German defence division on work share, governance and IP. Meanwhile, Switzerland weighs Franco-Italian alternative to US air defences (Financial Times, Mercedes Ruehl) shows that the country’s priorities might change as it is now thinking about whether it should opt for the French-Italian SAMP/T air and missile defence system over the American Patriot system whose production has been delayed from 2027 to 2032 or later. * SO WHAT? * If the Swiss decide to switch, this would signal a major shift in procurement strategy and be a big vote of confidence in the European system. As for the fighter-jet thing, it’s a real shame that the two sides haven’t been able to agree because the need is still very much there. Will this affect other defence projects, I wonder??

Meanwhile, Pentagon restores Alibaba, Baidu and BYD to Chinese military groups blacklist (Financial Times, Demetri Sevastopulo) shows that the companies have been put back on a blacklist because they have been deemed to pose a national security risk to the US because of their alleged connections to the People’s Liberation Army (PLA). TBF, China has a “military-civil fusion” programme where private companies are compelled to share technology with the PLA

when ordered to do so by the government. * SO  WHAT? * Obviously the companies themselves object to their inclusion on the list. It seems to me that this is a negotiation tool that Trump can always have in his back pocket so that he can threaten to put companies on it or decide to take them off it depending on his whims at any given moment.

In Donald Trump’s $100,000 H-1B visa fee blocked by judge (Financial Times, Ella Lee) we see that a federal judge ruled yesterday that the president’s decision to add a $100,000 annual fee to the H-1B highly skilled foreign worker visas is unlawful. The Department of Justice is likely to appeal. More than 400,000 of these visas were approved last year and before the government decided to jack up the fees last September, it cost $215 to register for the H-1B visa lottery plus another $780 for employers sponsoring visa applicants. * SO WHAT? * The dramatic rise in the fee was badged as a way to limit US companies using foreign workers at the expense of Americans but the federal judge said that it was just an unauthorised tax whose “obvious purpose” was to raise revenue.

Then in Reeves pushes companies to use AI in race for growth (Daily Telegraph, James Titcomb and James Warrington) we see that the Chancellor is pushing companies to accelerate their use of AI in order to power growth by asking employers to share data with a new “AI Economics Institute” (AIEI). The Treasury wants them to provide details of their use of the technology in order to keep track of this. The AIEI will also look at how AI affects unemployment. * SO WHAT? * This sounds like a decent enough initiative. It doesn’t sound like it’ll be impartial, though!

China’s ‘silver economy’ shines as birth rate plunges (Financial Times, Thomas Hale and Nian Liu) highlights the attractions of China’s “silver economy”, a term referring to its aging demographic. Chinese policymakers are looking at this sector of the economy to provide growth at a time when the struggling property market continues to weigh more generally on consumer spending. The silver economy, on the other hand, is growing and over 30% of the population is projected to be over 65 by the middle of the next decade. Last week’s International Exhibition of Senior Care, Rehabilitation Medicine and Healthcare held in Shanghai showcased all sorts of tech aimed at this demographic. * SO WHAT? * What was interesting about this was that there seems to be a major shift in emphasis in making products aimed at newborns and young kids to the other end of the age scale given that this is, in fact, a growing market. New technologies in this area could have a huge impact in the care sector in China – but ultimately, the world.

In other consumer trends news, European drivers cut back on fuel as energy price shock bites (Financial Times, Amy Borrett) cites data from Eurostat which says that European drivers are cutting fuel consumption in response to higher petrol prices, echoing what’s going on in the US, while Campbell’s Sales Fall on Continued Weak Demand for Snacks (Wall Street Journal, Kelly Cloonan) shows that the soup-and-snack maker is seeing weaker demand for its products but it didn’t say anything about whether this was as a result of the rising use of weight-loss drugs.

Surely it must do, though, as many other consumer goods makers are saying it and reacting accordingly either by tweaking recipes or making other healthier products.

Meta Launches ‘Workforce Academy’ to Train Workers to Build Data Centers (Wall Street Journal, Meghan Bobrowsky and Te-Ping Chen) is an interesting article that highlights what sounds like a great initiative – Meta is starting a “workforce academy” that puts workers through a five-week training course that gives attendees a guaranteed job at the end at a Meta datacentre construction site! The initiative is in partnership with CBRE and the Associated Builders and Contractors and people can attend free of charge. * SO WHAT? * There is a shortage of workers with the requisite skills to do this so this sounds proactive – in addition to being great for giving people new skills in a massive growth area. Will the same sort of thing happen around the world, I wonder?? It sounds like a positive development anyway…

Then in Wix.com Slashes 20% of Staff, Lowers Outlook as Restructuring Continues (Wall Street Journal, Adriano Marchese) we see that the website-building and web-services platform is making massive cuts and scaling back parts of its business as part of a major streamlining effort. It is interesting that the article does not mention anywhere that this has got anything to do with AI – but surely is has, no?? A 20% cut is really dramatic, so you do wonder about the viability of the company…

In IPO news, OpenAI files to go public in blockbuster Wall Street listing (Financial Times, George Hammond, Ryan McMorrow, Cristina Criddle and Tim Bradshaw) highlights the inevitable – that the company has filed for a listing that could value it at over $1tn. The ChatGPT maker said that it had not “decided on timing yet” but it comes just days before the SpaceX IPO goes for lift-off! On that subject, University Endowments Are About to Strike It Big on the SpaceX IPO (Wall Street Journal, Juliet Chung) highlights the fact that although Elon Musk has been critical of US universities, such institutions look set to make a ton of money from this coming Friday’s IPO because SpaceX is one of the most widely held investments across colleges and universities! It could bring massive windfalls to American endowments, with some set to make billions of dollars.

In M&A news, Tate & Lyle agrees to £2.7bn takeover from US rival Ingredion (Financial Times, Philip Stafford) shows that Tate & Lyle is to be bought by Ingredion, creating a major global ingredients business, following talks last month. Intesa Bids $35 Billion for Monte dei Paschi (Wall Street Journal, Margot Patrick and Adrià Calatayud) highlights a bit of drama in the

Italian banking industry as Intesa mounted a takeover offer for Monte dei Paschi di Siena (MPS) just a day after rival Italian lender Banco BPM approached MPS about a potential merger. Intesa’s bid for Monte dei Paschi di Siena restores some sanity to Italy’s M&A scene (Financial Times, Lex) suggests that Intesa’s offer would create a better deal than if MPS went with BPM because it would create more value.

Software buyout deals collapse to lowest level since pandemic after AI rout (Financial Times, Alexandra Heal) cites Pitchbook data which shows that software buyout deals have fallen to their lowest levels since the Covid-19 pandemic as the cloud of AI hangs over the sector, making it harder for buyout firms to pick winners. The value of software deals dropped to $50bn in the first five months of 2026 versus $88bn in the same period last year. Another reason for deal reticence is that it’s still uncertain as to how AI is going to affect the business models of software companies. * SO WHAT? * You do wonder where this is going to leave all those private equity firms who got involved in $290bn of software buyouts last year. At the moment, I think that investors are just waiting on the sidelines make a more informed decision about what to do next.

In a quick scoot around some of today’s other interesting stories, Apple unveils ‘Siri AI’ in challenge to rival chatbots (Financial Times, Michael Acton) shows that Apple unveiled a long-overdue overhaul of its voice assistant Siri aimed at helping it to compete with established chatbots inlcuding ChatGPT and Claude. Apple argues that Siri will be able to access a user’s personal information without compromising on their privacy, something that it says will differentiate it from its rivals. A beta version will be available next month before a proper rollout in the autumn. Apple also unveiled an update to its “Liquid Glass” operating system design and updates to child safety features.

Apollo and Blackstone raise $35bn in chip financing deal for Anthropic (Financial Times, Michelle Chan and Eric Platt) highlights a major private credit deal that will help finance Anthropic’s expansion plans. Private credit isn’t dead yet – particularly in the field of AI!

A New Front Is Opening in the Fight to Break China’s Rare-Earth Dominance (Wall Street Journal, Samantha Pearson) is an interesting article that highlights Brazil as being the world’s

rare earth saviour as it has the world’s second biggest reserves after China and ambitions to process them. If Brazil really did go down the road of processing it really could be a proper rival to China. China holds around 50% of the world’s rare earth reserves but controls over 90% of processing and magnet production. * SO WHAT? * This could be pretty amazing for Brazil and it has unsurprisingly not committed to joining a US-led minerals bloc, saying that it is open to any countries willing to invest. This could turn out to be a very valuable bargaining chip in trade negotiations…

Then in AstraZeneca reveals positive trial results for anti-obesity drug (The Times, Alex Ralph) we see that the pharmaceuticals giant got some good news from a mid-stage trial of its leading weight-loss drug. It has been behind rivals Eli Lilley and Novo Nordisk in the weight-loss market so it sounds like it is catching them up. AstraZeneca is definitely late to the party but I think that there is still time to make some money in this area.

I used to play the piano to about grade 7 level (fun fact: my teacher was an amazing blind lady!) but I can’t quite imagine playing piano like this…

In Israel launches retaliatory air strikes on Iran (Financial Times) we see that Israel launched strikes on Iran after Iran launched a missile attack on northern Israel yesterday, Oil prices jump after Iran missiles threaten fragile ceasefire (Financial Times, Myles McCormick) highlights the immediate reaction to this although Opec+ increases production quotas for fourth successive month (Financial Times, Verity Ratcliffe) shows that the cartel agreed to open up the taps. Although they’ve got the green light to produce more, the problem is getting it to customers given that the Strait of Hormuz is clogged up. Expensive oil is making electric vehicles look positively cheap (Financial Times, Lex) reflects one of the effects that this is having – that EV sales are rising. In the UK, petrol prices have risen by about 20% since the start of the year, so EVs are looking increasingly attractive as the total cost of running them is now falling below that of a traditional car.

Over in the US, Donald Trump piles pressure on Kevin Warsh with call for rate cut (Financial Times, Myles McCormick) shows that the president’s at it again – pressuring the chief of the Fed to do what he wants – ahead of the new chief’s first meeting. In an interview aired yesterday, Trump demanded lower interest rates and he has called for the current benchmark rate – which is currently in the 3.5 – 3.75% range – to be cut to 1% or lower. This came after a strong jobs report was published on Friday which indicated a stabilisation of the jobs market. This prompted investors to bet that interest rates were more likely to go up as the Fed concentrated on ensuring inflation doesn’t get out of control.

Voters sour on Trump’s handling of inflation and grocery prices — FT poll (Financial Times, Lauren Fedor and Ian Hodgson) shows that things are a bit tricky on the domestic front for the president as a nationwide poll conducted last week by Focaldata showed that 68% of registered voters disapproved of his handling of inflation and the cost of living. Around two-thirds of

respondents blamed his policies for the increase in grocery prices. * SO WHAT? * There’s a still a good few months left before the midterms but Trump could definitely do with some wins on the domestic front. It seems that the candidates he’s been backing have been doing well in the build up to November but I think that he could really do with grocery and petrol prices coming down in the very near future.

Ministers told to cut budgets to fund boost to UK defence spending (Financial Times, Anna Gross) shows that there’s a lot of back-room cajoling going on as Starmer and chums look for ways to inject about £15bn into Britain’s military as part of the much-delayed Defence Investment Plan. It seems like this is going to be funded by spending cuts elsewhere as opposed to hiking up taxes or increasing government borrowing. * SO WHAT? * At the moment it looks like the energy and net zero department and the transport department who are going to be targeted. Clearly we’ll have to wait and see what happens here but I guess Starmer’s not got much time before he potentially gets kicked out.

Then in Britain is staring into a £3tn debt abyss (Daily Telegraph, Szu Ping Chan and Tim Wallace) we see that, according to some estimates, the UK’s national debt will breach the £3tn mark and high interest rates are going to make the situation worse. Costs of the financial crisis, lockdown and big energy subsidies have all had a cumulative effect and have brought us to our current situation. * SO WHAT? * Some projections suggest that Britain’s debt burden is going to breach 96% of GDP in the next few years – and the last time it reached these heights was in the 1960s when we were still paying down the huge costs of WW2. That being said, we have the second lowest debt ratio in the G7, according to the IMF. However, this combination of higher debt and toxic politics is probably going to hold back any growth and the prospect of Burnham in the hot seat means that everyone expects the debt situation to get even worse. 

Are we at the start of a new investment super-cycle? (Financial Times, Rana Faroohar) is a really interesting article which highlights something I’ve also been wondering myself recently – are we in a bubble or are we actually at the beginning of something new? The themes of AI, clean energy and defence spending are converging – and all of this is resulting in an increase in spending. The argument for “the beginning of something new” depends on AI being a transformative technology that will need more energy to scale, that we’re on track for a clean energy revolution and that every industry is going to have to spend huge amounts of money on upgrading processes, infrastructure and human capital to make the most of these developments. There’s also been a tremendous impetus for countries and regions to become more self-sufficient after the pandemic, Russia’s invasion of Ukraine and Trump’s skittishness have all highlighted how vulnerable we are in terms of energy, food and defensive capabilities following decades of globalisation and relative calm. This means that there’s definitely an argument for why we’re at the beginning of another super-cycle but the problem is how’s everyone going to finance it??

In markets, Tech sell-off widens as South Korea index plunges (Financial Times, Song Jung-a and Leo Lewis) highlights a tech sell-off in Asia which saw the booming KOSPI drop by over 8%, which triggered a trading circuit breaker than halted trading for 20 minutes. The KOSPI is dominated by Samsung and SK Hynix which both fell by over 10%. This followed the NASDAQ’s 4.2% fall on Friday. However, Chips, ships and guns: South Korea booms on AI race and global conflict (Financial Times, Daniel Tudor) highlights South Korea as being a winner from making chips, ships and guns so it seems to me that any sudden weakness is not actually down to anything fundamental – perhaps its down to investors selling down their “winners” to build up money to put into the upcoming mega-IPOs (like SpaceX later this week). Chip and AI-related stocks have had such a good run that perhaps it’s time to take some money off the table. This is just my opinion but it does feel that way…

In Billions spent and hypothetical returns: the AI boom explained with six charts (The Guardian, Dan Milmo and Aisha Down) we see an interesting breakdown of the AI boom. The article contains charts that show AI powering indexes, that spending on AI is growing at break-neck speed, how firms and consumers are adopting AI at a rapid pace, that Claude has made up a tremendous amount of ground on ChatGPT, that AI is getting more expensive to use, that datacentre demand may outpace the ability to build, that each model is getting increasingly capable and that the datacentre build out in the US is actually supporting the economy. It’s certainly a very good visual summary!

In air travel news, Air fare rises ‘inevitable’ as airlines face extra $100bn jet fuel bill this year (The Guardian, Gwyn Topham) highlights some of the things that were said at the IATA summit in Brazil. Top execs said that they thought that jet fuel shortages were unlikely but that the industry’s profits could halve. The industry body went on to say that some carriers may not survive the fuel price shock (jet fuel prices are expected to rise by 70% by the end of 2026) and that the rises would inevitably lead to higher fares, something that was reflected in British Airways chief says air fares will rise again if fuel costs stay high (Financial Times, Peter Campbell), although British Airways already warned last month that it would raise prices. * SO WHAT? * Prices rises are pretty much inevitable particularly because consumers are all expecting it. It’s this fear that is powering demand for staycations IMO – that and the prospect of delays and disruptions because of the new passport control rules!

Will a World Cup boom be coming home for British business? (The Times, Jessica Newman and Jack Barnett) highlights the hopes for businesses, particularly in the hospitality and gambling industries, regarding a potential World Cup boost. The tournament starts this Thursday and will go on for six weeks. The problem is that because the games are being hosted in the US, Canada and Mexico, kick-off times are a bit awkward for Europeans, so upside might not be as big as it could be. That being said, more matches will be on terrestrial – meaning that pubs won’t have to pay to screen games – and licensing hours have been extended. Pub operators like Marston’s have invested heavily in enhancing the fan experience and have high hopes but then cinemas, ten-pin bowling alleys and sit-down restaurants are expecting a quiet period. Delivery platforms like Deliveroo, Just East and Domino’s are also expected to benefit.

Has Britain fallen out of love with discount retailers? (The Times, Isabella Fish and Guy Taylor) cites the latest figures from Global Data which shows that although the combined share of the UK retail market held by big discounters (this includes Aldi, Lidl, B&M, Poundland, Poundstretcher and Primark) is still growing (up from 8.55% in 2019 to 10.39% last year) the sector has been losing momentum since 2022, if you exclude Aldi and Lidl. * SO WHAT? * Given what’s going on with utility bills along with food and petrol prices I would not be surprised to see people returning to the discounters. We saw consumers migrating towards them during lockdown and in the “previous” cost-of-living crisis and I don’t see why that won’t happen again. I suspect that the likes of Tesco and others are going to have to up their game even more on the pricing front. We already saw last week that Morrisons was overtaken by Lidl to become the UK’s fifth biggest supermarket.

SpaceX signs $30bn deal to lease computing capacity to Google (Financial Times, Ryan McMorrow and George Hammond) cites SpaceX signing a $920m-a-month deal to lease out computing capacity to Google which could be worth over $30bn for the duration of the contract. The deal was disclosed to the SEC on Friday. This comes not long after a similar deal was struck with Anthropic and just before SpaceX has its market debut this Friday. * SO WHAT? * This sounds great, but then the last time everyone got excited about such a deal, Musk appeared to backpedal on it fairly soon afterwards.

Meanwhile, OpenAI plots biggest ChatGPT overhaul since launch (Financial Times, Cristina Criddle) shows that OpenAI’s sense of urgency is ratcheting up a couple of notches as OpenAI announced intentions to become a “superapp” that combines coding tools with AI agents whilst adding new products that management believe will generate more revenue. * SO WHAT? * The company created a huge splash initially, but now many of its rivals have not just caught up with it – they have surpassed it in many respects. Growing competition has forced the company to take things very seriously, particularly where it concerns revenue generation and it has meant that it has put more emphasis on focusing on profitable areas. The overhaul is expected to be rolling out over the next few weeks and it looks like the company believes that AI agents are where the smart money is going. It certainly looks like it is copying Anthropic’s decision to focus on business users.

In EU efforts to combat US tech dominance may backfire (The Times, Chris Dorrell) we see that the EU’s digital sovereignty legislation that was published last Wednesday has caused concern among some UK tech companies like Synthesia because the legislation, which is designed to encourage European tech champions, could cut out British companies. Industry body TechUK is very keen to secure recognition as a trusted partner. Details are not yet finalised but it has also caused alarm among European companies.

Then in Britain’s questionable reliance on Palantir (Financial Times, the editorial board) we see that the debate between needing Palantir’s AI expertise and concerns about its ethics continues to rage. The cross-party Science, Innovation and Technology committee believes that Palantir’s role within the public sector is divisive because of the “clear mismatch with UK values” and the company’s willingness to support “highly controversial policies and activities”. * SO WHAT? * The fact is that the NHS’s data management has got much better since Palantir got involved so it’s not a given that the break clause should be broken next year. In the meantime, it is advisable that the government should try to find UK alternatives where possible, particularly in the creation of the NHS Single Patient Record.

In a quick scoot around some of today’s other interesting stories, Walmart tells workers that AI will improve their jobs, not steal them (Financial Times, Gregory Meyer) highlights efforts by the retailing giant (which is the biggest private sector employer in the US) to calm fears about AI taking everyone’s jobs by emphasising that it’ll help them, not eliminate them. The company is using AI across the board and it was notable that the company did not mention AI at all when it announced layoffs last month in the company’s tech and product design teams. I’m sure that it will help many in the firm but I can’t help thinking that it is an employee’s biggest threat.

Back home, in terms of employment trends, UK employers hiring more temps as staff costs rise (Financial Times, Delphine Strauss) cites the latest monthly poll by KPMG and REC which shows that the number of permanent hires is falling while the hiring of temps is increasing. REC’s chief exec said that this reflected “a lack of confidence” from employers. The conclusions here were also echoed by trends seen at recruitment group Hays. How Britain became a nation of reluctant freelancers (Daily Telegraph, Tim Wallace) highlights a growing trend of employees ditching full time roles to become freelancers, something that employers complain has been brought about by the government’s recent policies which makes employing them too expensive.

Meanwhile, US law firm offers City graduates £189,000 (Daily Telegraph, Louis Goss) shows that the US law firm Quinn Emmanuel has announced that it will pay its newly-qualified solicitors £189k a year. Clearly it thought that the previous salary of £180,000 was a bit stingy to scrape by on. Will this kick off a new salary war in the legal sector?? This is a standout as all of the “magic circle” law firms pay their newly qual’s the mere pittance of £150k 🤑. How they get by I shall never know…

Then in news on education, The £450,000 degree: how English university fees for overseas students are surging (Financial Times, Amy Borrett) highlights the fact that overseas students studying at the Uni of Cambridge this autumn are going to have to stump up at least £450,000 for a medicine degree as part of a plan for England’s top-ranking unis to raise international undergraduate fees over four years. Domestic students currently pay a fixed fee but the cost for overseas students can vary between subjects and institutions. “Paupers” could potentially go to Oxford to pay a minimum of £343,950 for their six-year cheapo degree. The situation is clearly getting ridiculous and it seems to me that charging overseas students exorbitant fees just papers over the cracks of a system that is in dire need of a complete overhaul.

Running on treadmills is dull – I think that we can all agree on this. Most people listen to music to get them through the boredom – but this guy has some unusual moves! This then got me thinking about this classic OK Go video from about twenty years ago 😱😱😱!

On the subject of wars and conflict, Hizbollah rejects US-brokered ceasefire as Israel pursues offensive (Financial Times, Raya Jalabi and James Shotter) shows that peace ain’t anywhere close while US plans cuts to Nato’s rapid response force (Financial Times, Anne-Sylvaine Chassany and Henry Foy) shows that it looks like the Americans are going to withdraw key military assets from NATO’s rapid response force (or is this just another Trump negotiation tactic?). The Gulf states and Ukraine need each other (Financial Times, Bilal Saab) is a really interesting article which makes the connection between the Gulf states who need drones/counter-drone equipment and Ukraine, who can supply the expertise! Trump is expected to ditch security assistance for Ukraine in next year’s defence budget – and if this happens, the Gulf states could conceivably step in with financing in return for Kyiv’s help in counter-drone capabilities and training. Although the US has provided them with some of the best missile systems in the world, it is not the most adept or experienced counter-drone operator – whereas Ukraine is. The UAE, Bahrain, Saudi Arabia, Qatar and Kuwait have all suffered drone strikes, so the need is very real. * SO WHAT? * I think that this is a very interesting – but I think what would be even more interesting is how such alliances might affect the relationship that Gulf states have with Russia. It seems to me that they’ve been keen to keep the US, China and Russia onside for the most part, tip-toeing a fine line between being welcoming and being careful not to breach sanctions. However, if they actively contribute to Ukraine’s war effort by financing it, Russia isn’t going to like it. Perhaps Ukraine can use their expertise as leverage to get the Gulf states to reel in their support for Russia in some way.

Back home, Burnham confirms he will seek to replace Starmer as UK prime minister (Financial Times, Jennifer Williams) shows that Andy Burnham is – surprise, surprise – keen to oust Starmer as PM if he wins the Makerfield by-election that will be held on June 18th. Apparently bears also 💩 in the woods…

Bitcoin tumbles after Strategy sale unnerves crypto traders (Financial Times, Jill R Shah) highlights bitcoin weakness as it is now approaching its biggest weekly loss since November 2022 on news that one of its biggest corporate fans, the bitcoin-hoarder Strategy, sold 32 bitcoin last week for $2.5m. This is only the second time it’s sold bitcoin since it began buying in August 2020. Bitcoin’s price fell up to 5.5% initially on the news, but then recovered slightly. * SO WHAT? * Bitcoin has lost 14% of its value this week. I guess the fall came more because of WHO was selling rather than WHAT they sold. After all, prior to last week’s sale, Strategy had bought 843,738 bitcoins in 110 transactions for almost $64bn (I believe this works out as an average of $75,853 per bitcoin). It seems that retail investors are putting tech stocks over bitcoin for now. Strategy is leveraged up to the eyeballs regarding bitcoin so obviously its chief banged on about how great bitcoin is on X, saying that now was a good opportunity to buy.

Lululemon Cuts Outlook as Headwinds Mount (Wall Street Journal, Kelly Cloonan) shows that the posh athleisure retailer cut its forecasts for the full year due to new challenges including negative commentary on the brand from its founder and the lukewarm response to its new products. This goes against positive noises the company had been making about Q1 and its business in China. The share price is down by 40% year to date. * SO WHAT? * Lululemon has leadership issues for now, but it needs to get back on track pronto because this is a very competitive space and more rivals will be pleased to make ground while the company is napping.

Americans on GLP-1s Are Overwhelming Retailers With Their Nonstop Returns (Wall Street Journal, Jennifer Williams) highlights another side-effect of more people taking weight-loss drugs – that apparel companies are seeing a significant rise in returns! Basically, it’s got to the stage that when some people order, say, three sizes, retailers have started asking the client whether they are losing weight or advising them to buy garments closer to the event that they are buying for. There is also a noticeable trend that larger sizes are being returned for smaller ones. Apparently, at peak weight loss, those on weight-loss drugs can drop one clothing size per month. * SO WHAT? * Returns are a major headache for retailers, particularly for online ones. Shipping, labour and warehousing costs all take their toll – and by the time garments come back, they can be out of season, meaning that the retailers have to sell them for a discount. I would say that some retailers are victims of their own laziness because the accuracy of the size charts can be highly variable. I do wonder whatever happened to customer avatars and virtual changing rooms because surely the tech is even better these days. I am going to sound like an old man here but I remember over ten years ago there was a Japanese company that sent out a whole body measuring device and that you could then have jeans actually made to measure – and it wasn’t particularly expensive (they did a lot of other garments as well). OK, so they had to abandon that, but surely everyone would benefit by having some kind of virtual avatar for themselves with brands and retailers buying into it with all their weird and wonderful sizings, don’t you think? It would take all the guesswork out of shopping and if you had some kind of virtual sizing booth in high street retailers it would increase footfall and help online sales as well.

UK car sales hit post-Covid high for May as Chinese EV makers gain ground (The Guardian, Jasper Jolly) cites the latest data from the SMMT which showed that British car sales increased to their highest level for the month since before the Covid pandemic, thanks in part to strong growth from BYD and Chery. Car registrations overall rose by 7% over the month with batter electric cars sales showing the strongest uptick. * SO WHAT? * This was particularly interesting because PRIVATE BUYERS were the main drivers for the best May sales rise since 2019. Until now, fleet buyers have been the ones powering sales.

Sales of weak beer rocket after tax raid (Daily Telegraph, Tom Haynes) highlights another interesting trend – that sales of beer with strengths of between 1.3% and 3.4% alcohol by volume (ABV) have boomed by 2,500% between 2022 and the end of 2025! Lower strength beers made up just 0.4% of the market in 2022 but they now account for around 12.5%! This follows reforms introduced in August 2023 that reduced duty on drinks with an ABV of 3.4% or less, giving brewers/makers a big incentive to overhaul their products – and pretty much everyone has.

Then in Amazon expands ultra-fast deliveries in UK and adds same-day fruit and veg (The Guardian, Sarah Butler) we see that Amazon is expanding fast-track deliveries in the UK that already delivers goods in less than 30 minutes to some parts of London. Its Amazon Now service will be rolled out to cover Manchester and Birmingham this year. It will expand its same-day service to Ipswich and Coventry. * SO WHAT? * Amazon is now putting more effort into its Whole Foods business following the closure of its Amazon Fresh stores last year. It’s had this grocery business for a while now but hasn’t really dented the incumbent supermarkets at all. After all the hype regarding online grocery shopping during lockdown and the subsequent drop-off, I doubt this is going to be a major money-spinner, but then again, given Amazon’s logistical expertise if anyone can make a mark Amazon can!

US National Security Agency using Anthropic’s Mythos for cyber attacks (Financial Times, Cristina Criddle and Demetri Sevastopulo) shows that Anthropic is now helping the NSA use its Mythos AI model for offensive cyber operations by installing around six staff as forward-deployed engineers to assist with use of the technology. They will customise models for specific applications. This is happening despite Anthropic suing the defence department for designating it as a “supply chain risk” in response to the company refusing to let its Claude AI models for the mass surveillance of American citizens and in lethal autonomous drones.

Then in Kirkland & Ellis and Palantir to build AI tool to assist private equity firms (Financial Times, Kaye Wiggins and Suzi Ring) we see that the US law firm has signed a multiyear deal with Palantir to develop AI tech that will help in advising private equity groups on how to raise money from investors. The idea is that it will make the expertise of top partners available to over a thousand of its lawyers and will enable outcome-based fees rather than the current billable-hour based ones. * SO WHAT? * This Palantir agreement is one of a number of such agreements being made by the company at the moment as part of its stated $500bn investment to create a proprietary AI platform. It’ll be interesting to see the detail of subsequent deals and whether proprietary really is the way to go.

Goldman Sachs expects SpaceX’s AI revenue to increase 100-fold by 2030 (Financial Times, George Steer, James Fontanella-Khan and Stephen Morris) shows that Goldman Sachs, which is lead investment bank on the IPO, forecasts that revenues at SpaceX’s AI division will increase a hundredfold by 2030. * SO WHAT? * For this to actually happen, the Grok family of models will have to catch up with and overtake those of Anthropic, Google and OpenAI across the board.

Still, I think that xAI did amazingly well to come as far as it has in such a short space of time. If Musk can somehow stabilise the top management, you would have thought it will be able to do a lot better. BTW, re Goldman Sachs, when an investment bank is lead on a deal, you have to be sceptical as to their forecasts because it is obviously going to be portraying the client in the best light (although it is supposed to be “objective”,  yeah right). Having been involved in IPOs myself back in the day, investors tend to want to see what the banks on the deal have to say because they arguably get access to more information and are possibly “closer” to the company than everyone else. Those NOT on the deal will issue research which extolls their own virtue of being independent and being able to provide a more realistic opinion to investors. Further to this, SpaceX IPO shows Musk’s genius is in mythmaking (Financial Times, Richard Waters) remarks on SpaceX’s wild valuation and that, really, investor faith is pretty much based on the mystical abilities of Musk to bring the future to life rather than on any kind of reality!

I’ve commented on this before but The coming equity surge will test the US bull run (Financial Times, the editorial board) emphasises just how incredible the current situation is with mega-IPOs. Fun facts: if you added up the expected valuations of SpaceX, Anthropic and OpenAI in their upcoming or expected IPOs, you are looking at about $4tn – the equivalent to about one-third of ALL US IPOs, adjusted for inflation, between 1980 and 2025! No one seems to be overtly worried as to whether the markets can absorb this – and there are many more IPO candidates waiting in the wings who will compete for investor attention, including the likes of Stripe and Databricks. In addition to the flotations, there could be further capital raisings if Google’s mammoth $85bn raise does well. Right now, it looks like investors are OK with all this but if resolve wavers, the downfall could be huge.

In a quick scoot around some of today’s other interesting stories, China’s clampdown on capital flight wipes billions off UK banks (The Times, Helen Cahill) highlights the plight of Asia-focused UK financial stocks that have lost ground due to Chinese regulators clamping down on capital flight. The South China Morning Post reported that residents in mainland China have been experiencing much stricter limits on opening offshore accounts. I mentioned this clampdown earlier this week but in the realm of Chinese citizens’ exposure to US equity markets. The clampdown is real – which is why share prices of HSBC and Standard Chartered suffered on the news.

Staying with financials, Blackstone caps withdrawals from $79bn private credit fund (The Times, Louisa Clarence-Smith) highlights the latest company to restrict fund withdrawals from its private credit funds. Blackstone is the world’s biggest alternative asset manager and redemption requests have shot up over Q2. It’s not alone in this (other private credit funds have been experiencing the same thing) but for the Blackstone to restrict fund withdrawals is a big deal.

World Cup sparks betting battle between bookmakers and prediction markets (Financial Times, Stephanie Stacey) shows that the established gambling companies – including Flutter and

DraftKings – are upping their game in sports betting to offer new in-play bets and other promotions to stop punters’ attention being turned by the up-and-coming prediction market players like Polymarket and Kalshi. * SO WHAT? * The World Cup, which begins on June 11th, is a major gambling event so there is quite literally a lot at stake here! It’s too early to tell who will win the battle of the gambling platforms, but it’ll be interesting to see who does!

Then in Private schools in England lose 20,000 pupils in first full year of VAT on fees (Financial Times, Chris Smyth and Amy Borrett) we see that impact of the government’s decision to impose VAT on private school fees has resulted in pupil numbers falling by over 20,000 over the course of the first full year of this policy. Whether the money generated by this has actually funded the 6,500 new teachers, as per the government’s promises, is a moot point. * SO WHAT? * I think that this move has pushed some private schools over the edge and the pupils are the ones that have suffered in the end through no fault of their own. They are the ones who will suffer from the instability and uncertainty as well as the inevitable bullying that is likely to occur when they go to state schools. I just wonder whether it was all worth it for the sake of the damage it will cause those whose parents scrimped and scraped to get their kids to those schools for whatever reason.

I thought it would be nice to end the week on some relaxing music. I was originally going to use this video to end the week on but decided against it because it was too silly/annoying. Phew! At least I didn’t do that…

In war news, Israel and Lebanon agree to implement ceasefire (Financial Times, Jacob Judah and Myles McCormick) shows that the two sides have agreed to a US-brokered ceasefire, issuing a statement yesterday. Hizbollah is yet to comment publicly on this latest development, which the state department says is a stepping stone towards “a comprehensive peace and security agreement” between the warring sides.

Putin’s solution to replace Russia’s vanishing workforce (Daily Telegraph, Melissa Lawford) highlights an interesting effect of the war in Ukraine – that Russia has lost so many men to the war that it has ramped up its recruitment of workers from India for roles in construction, factories and food processing. The number of Russian work permits issued to Indian nationals has boomed tenfold since the beginning of the Ukraine war and it looks like the numbers will continue to swell. This is becoming a more attractive option at the moment for Indian migrant workers particularly as work in the Middle East has dried up due to the war there. * SO WHAT? * Labour shortages are becoming acute – so much so that the Russian government is now talking about easing restrictions on hiring teenagers in high-risk industrial jobs while schools are increasingly calling on teachers to come out of retirement.

Republican-led House deals blow to Donald Trump over Iran war (Financial Times, Lauren Fedor and Abigail Hauslohner) heralds a bit of a blow for the president as the Republican-controlled House of Representatives has just passed a resolution to stop him from conducting any more strikes on Iran without approval from Congress. Trump maintains that talks are “going very well”. * SO WHAT? * This is quite a development because there have been numerous attempts up until this point to force congressional oversight on the war. Is the tide turning?? Meanwhile, Donald Trump’s Iran war drains US oil stocks to lowest level since 2004 (Financial Times, Jamie Smyth) shows the reality of the consequences of his war, which would suggest that prices are about to go up again and Sticker Shock at the Pump Fuels a Surge in Hybrid Sales (Wall Street Journal, Christopher Otts) highlights another real world consequence of the war – that higher oil prices mean higher petrol prices, which now means that hybrid sales in the US jumped by 33% in May versus May last year, according to data from Motor Intelligence! 

Elsewhere, Scott Bessent says US inflation jump will be ‘short-term blip’ (Financial Times, Myles McCormick) shows that the US Treasury secretary was doing his best to talk down inflation at a congressional committee hearing yesterday, preferring to point out that “the economic data is very strong” while US proposes tariffs of at least 10% after forced labour probe (Financial Times, Peter Foster and Andy Bounds) highlights Trump’s latest attempt to divert attention away from his failure in the Middle East – he’s now trying to impose tariffs of at least 10% on 60

countries following an investigation into forced labour practices. According to the Office of the US Trade Representative, China, the EU, India, Japan and the UK are among those deemed not to be doing enough to prevent the import of goods using forced labour. What an absolute load of 🐂💩. Given that the latest tariffs are due to expire soon, it’s not surprising that he’s trumped up some other excuses to keep the tariff party going.

Back home, UK government to pay £1.3bn to help fund Universal Studios theme park in Bedfordshire (The Guardian, Mark Sweney and Heather Steward) shows that a lump of taxpayer money is going to go towards financing Universal’s first theme park in Europe. The UK had been in the running to get the theme park with a number of other countries, so the promise of finance from the government swung it for us in the end. * SO WHAT? * The project, which is due to start soon, is expected to generate 20,000 jobs in construction along with another 8,000 when it’s actually up and running. The theme park will be called Universal United Kingdom Resort and is due to open in 2031.

In oil news, Gulf states in talks for oil pipelines to bypass Hormuz (Financial Times, Verity Ratcliffe) shows that countries that export oil via the Strait of Hormuz are now talking about building pipelines that would allow them to bypass the Strait if it remains closed. Kuwait, Saudi Arabia and the UAE are looking to build pipelines across their respective countries that would connect their production with global buyers. * SO WHAT? * This sounds like a good idea in theory but they will take time to build, will be expensive and could prove to be a bit of a white elephant if things get sorted out with the Strait of Hormuz. Talks about this have occurred from time to time but they’ve never really come to fruition due to concerns about over-reliance on neighbouring states and possible vulnerabilities.

Then in BP considers quitting North Sea after Labour tax raid (Daily Telegraph, Emma Taggart) we see that the embattled oil major is on the verge of quitting the North Sea after over 60 years due to Labour ramping up the taxes. It’s been close to selling its UK offshore operations to Ithaca but is considering other deals. The chancellor launched her latest tax raid on the sector last month and says that she’ll use the proceeds to fund £1.8bn of the cost of living support package. * SO WHAT? * We’ve already seen the damaging effect the previous tax raid had on the oil and gas sector – and the Offshore Energies UK trade association said last year that the North Sea industry is already losing about 1,000 jobs a month. This is good news for environmentalists but bad news for the oil companies. Ultimately, it’s probably bad for the consumer as well because we’ll have to spend more on importing oil.

Elon Musk’s SpaceX pitches investors $1.8tn valuation in historic IPO (Financial Times, Ryan McMorrow, George Steer and Stephen Morris) highlights the amended IPO filing made yesterday as it is looking to raise up to $86bn at a valuation of $1.78tn. The IPO could raise anything from $75bn to $86bn. The company will use the proceeds to expand its AI infrastructure, developing space launch vehicles and building its Starlink satellite internet constellation. SpaceX wins tax exemption for $55bn AI chip plant despite local backlash (Financial Times, Stephanie Findlay) shows that the company just won an exemption from property tax for its planned Terafab semiconductor facility despite the threat of legal action. Musk is on a roll! Meanwhile, As the tech mega-IPO race heats up, has OpenAI missed its moment? (The Guardian, Aisha Down) begs the question – what next for OpenAI now that SpaceX is launching its IPO and Anthropic has also thrown its hat into the ring?? Will it go down the flotation route as well? Can it afford not to?? * SO WHAT? * Clearly, there is a massive frenzy. Traditional valuation methods just don’t apply any more and everyone is just buying into hopes for the future. I think that OpenAI just needs to get on board the hype train and ride it all the way to Flotation Central.

Google upsizes historic equity raising to $85bn to back AI spending spree (Financial Times, Stephen Morris, Ryan McMorrow and Peter Wells) has now increased the size of its equity fund raising from $80bn to $85bn as strong demand emboldened the company to ask for more! This is Alphabet’s first stock offering in over twenty years and will be the biggest one in history. Meanwhile, Google must give publishers more control over AI search, orders CMA (The Times, Emma Powell) highlights the CMA’s decision to order Google to give publishers more control over how their content is used. * SO WHAT? * This will give news publishers in Britain the power to block their content from popping up in Google’s AI search results. The CMA said that this would “put publishers, like news organisations, in a stronger position to negotiate content deals with Google”. Google will have to clearly attribute content that appears in its AI overviews and put in

links back to the original stories. News publishers have said that they have experienced a major drop in click-through traffic to their websites since Google rolled out the AI overviews at the top of search results.

In Meta bets on AI agents to unlock WhatsApp revenues (Financial Times, Tim Bradshaw and Hannah Murphy) we see that a new AI agent, called Business Agent, is going to be rolled out to WhatsApp business users. It will be able to automatically respond to customers’ messages, give business owners feedback and analysis in addition to closing sales or booking appointments without the need for any humans to get involved. This will also be rolled out to Instagram soon.

It’s not all sunshine and rainbows in the world of tech, though – Broadcom loses more than $300bn in market value as revenue forecast disappoints (Financial Times, Michael Acton and Peter Wells) highlights an enormous one-day loss in value yesterday as the US chip company unveiled AI revenue guidance that fell short of market expectations. The share price fell by up to 15.4% in after-hours trading on the announcement. The company’s share price had actually risen by over 14% during the course of the last week. * SO WHAT? * This is only my opinion but I wonder whether at least some of the sell-off was down to investors taking some money off the table to build up some dry powder so they can buy into the SpaceX flotation. If that is the case, perhaps we’ll see more selling like this if there is a whiff of tech company performances falling short of expectations.

Mobile gaming companies lash out at Brussels (Financial Times, Richard Milne) highlights the ire of the mobile gaming industry in the face of a proposal by the European Commission to force mobile games to display pop-ups every time they use virtual currency to buy something and have paid money to get that currency. The industry says this will kill gameplay and put people off. What a Battle Royale this is proving to be…

The employment gloom continues in Number of workless households hits fresh record high (Daily Telegraph, Tim Wallace) which cites the latest ONS data which shows that the number of households in which no adult has ever worked reached a record high in Q1 of this year. That is up from Q1 last year and is the highest level since records began in 1996. This comes at a time when there are a lot of depressing stats about youth unemployment and employment in general. This is just another stat to throw in the pot…

Online adverts for UK starter jobs halve over past decade (Financial Times, Delphine Strauss) cites analysis by Lancaster University’s Work Foundation which shows that online ads for starter jobs have fallen dramatically over the last ten years, further emphasising just how hard it is to get a first job. * SO WHAT? * OK, so this could reflect employers using job boards less because they don’t need to advertise in a weak jobs market but given the current climate and other data releases, which back this up, it all makes sense. Until the government does something dramatic to address this, I really don’t think things are going to improve. There’s some talk about hospitality

doing better this year because of more people staycationing, but I think that will only provide brief respite to what has become a structural problem rather than a cyclical one.

Then in Several UK universities nearly ran out of cash last year, says report (Financial Times, Andrew Jack) we see that, according to a report by the University of East London, almost 25% of British universities had less than 70 days of cash to cover their costs at the end of 2024-25. The research was based on the published accounts of 160 universities and showed that 60 performed badly against their metrics. It was interesting to note that 25% had very narrow sources of income and that spending had grown more rapidly than income in the last few years. Staffing accounted for at least 60% of the costs – and with strikes going on at the moment, that could well rise even further! London South Bank University was the worst performer with just seven days of cash to cover spending. I really do think that the government needs to step up and make some very difficult decisions here and slim down the number of universities and courses – but it probably can’t do that at the moment because of the whole leadership thing.

In a quick scoot around some of today’s other interesting stories, Saudi wealth fund replaces foreign CEOs with locals (Financial Times, Ahmed Al Omran, Nicolas Parasie and Andrew England) shows that the Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has been executing a leadership overhaul at some of its companies over the last few months, getting rid of foreign execs and replacing them with locals. * SO WHAT? * A lot of start-ups that have been funded by the PIF have been established by foreign execs with experience outside the kingdom but there is now a trend of getting locals to take over. This makes a lot of sense given the fund’s narrowing of focus. I would have thought that this is something that would have happened over time anyway – but plans were accelerated to do this because of the war. As I’ve

said before, I would have thought there will also be a lot of asset disposals around the world where they don’t fit into the new priorities.

Then in Nissan signs deal with China’s Chery for Sunderland car production (Financial Times, Kana Inagaki) we see that Nissan has now signed a deal with China’s Chery to make Chery’s vehicles at its Sunderland factory as part of a plan to secure the plant’s long term future. Production of Chery vehicles will start next year. This was inevitable given Nissan’s ongoing troubles – and it’s a lifeline for jobs there.

I tend to avoid people who offer me things when I walk down the street because 99% of the time it’s a waste of time or they’re trying to sell me something. However, there’s that 1% chance that something pretty extraordinary will come of it – as one couple found out…

US and Iran exchange renewed fire as tensions rise over stalled peace talks (Financial Times, Lauren Fedor) shows that there’s been an exchange again as US forces apparently intercepted Iranian missiles and drones. That “ceasefire” is looking pretty leaky to me! We’re almost at the end of the week, so it’s probably about time that Trump makes some kind of outrageous boast about peace/Israel/opening the Strait of Hormuz that is just pure fantasy. I predict Friday (because the oil markets are closed over the weekend). We haven’t heard him insulting anyone/countries/a region for a bit so maybe he’ll mix it up and do some stirring to distract attention from a) the rising cost of living in the US and b) the war dragging on.

America’s AI boom is carrying more than investors admit (Financial Times, Chris Watling) makes the observation that there’s something funny going on in the US economy at the moment! Consumer spending hasn’t collapsed, corporate profits have hit – or are near – record highs and equities still have punchy valuations – and yet real disposable income growth and job creation are losing momentum. This anomaly is due at least in part to particular strength of anything in the AI supply chain. Outsize performance here has masked more sedate performance elsewhere, something that I mentioned earlier this week, which has the effect of making the economy look stronger than it actually is. Consumer spending has remained pretty resilient so far because richer households are getting richer (this is because their portfolios are performing well thanks to tech and AI in general) because of the boost in spending power but lower income households are really suffering with squeezes on their disposable incomes and lukewarm job market. * SO WHAT? * Tech and AI could still carry the economy as long as the spending continues but if we start seeing cracks in this, the reality of what’s underneath will be brutally exposed. Fun fact: I used to work with the guy that wrote this article (he was at Cazenove like me – along with Ralph!). He was very good and popular with the clients (well, he was with mine, anyway!).

Gold replaces US Treasuries as world’s top reserve asset, ECB says (Financial Times, Olaf Storbeck and Leslie Hook) highlights something that is pretty interesting – that gold is now the world’s top reserve asset, overtaking US government bonds, after years of central banks loading up in an effort to seek out alternatives to US assets. Central bank buying of gold slowed down a bit last year but the ECB chief said yesterday that “Geopolitical tensions continue to drive strong central bank demand for gold”.

Back in the UK, Government borrowing £60bn higher than OBR prediction (The Times, Jack Barnett) shows that government borrowing was higher than expected – and the OBR also admitted to underestimating the dent on growth from Reeves’s payroll tax raid. The OBR said that it had “adjusted our analytical and modelling toolkit” to make sure this uselessness wouldn’t be repeated but I’m not filled with confidence. TBF it is tricky to get this sort of thing right, but then again if they don’t get it right (and let’s face it – it’s their job) we may as well use a dartboard to come up with forecasts…

Palantir should not have ‘significant role’ in UK public data systems, MPs say (Financial Times, Laura Hughes) highlights resistance from the House of Commons technology committee regarding controversial company Palantir’s “significant role” across sensitive UK defence, health and policing data systems. Members wanted ministers to trigger a 2027 break clause in the company’s £330m contract to build the Federated Data Platform (FDP) and instead use a UK-based provider. * SO WHAT? * I would wholeheartedly agree with the sentiment here given the company’s close ties with the Trump administration but the problem is – is there anyone at could actually do it?? At the moment, Palantir has major contracts with the MoD, the police and the FCA. It got booted last month from getting the contract with the Met. At the very least, we should get someone European involved…

Chinese investors fear missing out on SpaceX IPO after crackdown (Financial Times) shows that there’s a crackdown going on by state authorities who want to curb Chinese citizens’ exposure to US equity markets. The China Securities Regulatory Commission are making sure that investors can only buy overseas stocks via official channels, clamping down on brokerages that are helping them get around it. * SO WHAT? * Chinese investor interest in US equities has increased in recent years but the authorities want to limit capital flight. Investors are looking at ways of growing their money because their usual go-to for growth is the property market – and that has been in the doldrums for years. I don’t think that this will have any real impact on the SpaceX IPO because I’m sure there is plenty of existing demand elsewhere anyway.

Meanwhile, SpaceX worth less than half its $1.8trn valuation, analysts warn (The Times, Ben Martin) shows that Morningstar analysts believe that SpaceX’s valuation should be more like $780bn and that they are likely to be “overvalued in almost any scenario, at least in the near term”. They have advised investors to avoid the flotation itself and just buy shares in the aftermarket. * SO WHAT? * Everyone and their dog knows that SpaceX’s valuation is hysterically detached from reality. Musk companies always are. Just look at Tesla – even now! I haven’t looked at its size recently, but as an EV company, it grew to such an extent that it was bigger than many of the other established car makers put together – and this was despite them selling not very many cars. When it comes to Musk, investors tend to leave their usual parameters at

home and buy into the future he is building. I know this is going to sound cynical but when you consider that institutions that are in the deal – and/or sniffing around for other deals in the future – will be fully partaking of the Kool-Aid and throwing conventional investing wisdom to the wind, you can bet that they will be on board with all the crazy valuations (certainly in public anyway). Morningstar is independent and so can say what it likes. I don’t think anyone’s going to take any notice though – and this thing will fly.

Fears of dotcom bubble 2.0 as trillion-dollar AI floats swamp the market (Daily Telegraph, Chris Price) is just the latest article reflecting fears of a bubble that will cause chaos when it bursts. * SO WHAT? * FWIW, I lived through the tech bubble (and a few other things besides!) and it feels to me like the benefits of AI are going to be more tangible than the benefits that were promised in the tech bubble of the late 90s/early 2000s. As I’ve said on many occasions before, I think that investing in AI infrastructure is a very good move now – despite the expense – because it will put up the most almighty barriers to entry for any later players. The other thing is that any power-related infrastructure that is used for AI could potentially pivot to supplying EVs as take-up increases dramatically over the coming years. I think that the main difficulty, in the short term, is that in order for investors to get a piece of the AI IPO action, they’re going to have to sell off other assets – and they are going to fall HARD.

Donald Trump signs watered-down AI vetting order after Maga infighting (Financial Times, Joe Miller) shows that the president has signed an executive order that creates a “voluntary framework” for the US to get first-look at AI models. Trump had been reluctant to sign because he thought that government oversight would slow down the tech advances of the likes of OpenAI, Google and Anthropic. Meanwhile, America’s Data Center Build-Out Is Falling Way Behind Schedule (Wall Street Journal, Katherine Blunt) shows that supply chain backlogs and permit issues are delaying the rollout of datacentres despite the huge amounts of money being thrown at them. Recent JP Morgan analysis reckoned that over 60% of data centre capacity scheduled for completion in 2027 isn’t yet under construction and an additional 7% is delayed! * SO WHAT? * If this results in delays to AI companies making money from their investments in infrastructure then it’s not going to go down well with investors. That being said, I think that there will be a bit of a grace period in expectations given the enormity of the task – but that’s not going to last forever!

In model news, Anthropic to expand Mythos access to more than 15 countries (Financial Times, Madhumita Murgia and Jamie John) shows that Anthropic is going to allow 150 organisations across the world to have access to its Mythos AI model, vastly expanding existing access.

Anthropic said that it would use Mythos to find and patch security vulnerabilities for companies and institutions in over 150 countries. New countries getting access include those in the “Five eyes” intelligence alliance (including Canada, Australia and New Zealand), as well as France, Germany, Italy, Switzerland, the Netherlands, Spain, Belgium, Sweden, India, Japan and South Korea. Companies getting access include Okta, Samsung, SK Hynix and SK Telekom as well as Euroclear, the NYSE owner Intercontinental Exchange and international payments platform Swift. NATO and the EU’s cybersecurity agency, ENISA, will also get access.

Then in Microsoft targets Anthropic with new model releases (Financial Times, Rafe Rosner-Uddin) we see that the company unveiled seven new AI models in its Build conference yesterday. The company’s AI chief, Mustafa Suleyman, did concede that although these models have made huge leaps, Anthropic is still a few months ahead in tech capability terms.

Google’s $80bn equity raise adds to that giant AI sucking sound (Financial Times, Lex) highlights the fact that although an $80bn equity raise is substantial, it is better placed than the likes of OpenAI and Anthropic – who are pure AI plays – because it still has a very lucrative advertising business.

In a quick scoot around some of today’s other interesting stories, Will the IT consulting share price rout ever end? (Financial Times, Stephen Foley) refers to the current trend of consulting companies seeing their share prices take a battering every time some big advance in AI is made. In the past, such companies benefitted from tech disruption. It told companies how to adopt enterprise software in the 1980s, did well from the shift to the cloud and the subsequent digital transformation that came from the Covid work-from-home boom. However, investors are worried about the current shift with AI while the consultants themselves say it is generating new categories of work that didn’t previously exist. * SO WHAT? * Accenture’s share price has more than halved in less than 18 months because investors think that AI could potentially replace a lot of what it does or at least force them to cut what they can charge their clients. IT consultants Cognizant, Infosys and Tata Consultancy Services are other companies that have seen their share prices crater. The billable hour is looking particularly vulnerable here and pricing is moving towards being outcomes based.

Back home, Buy-to-let lending fell after November budget, says Paragon (The Times, Helen Cahill) cites research from one of Britain’s biggest buy-to-let lenders which shows that the number of new mortgages is falling as the impact of last year’s late Budget flow through, which doesn’t bode well for tenants who might be seeing less choice in the market and higher rents.

In Crypto tech is about to transform how you buy your home (Daily Telegraph, Tom Saunders) we see that there are moves afoot in the housing market that could potentially transform the way properties are bought and sold. At the moment, it takes about 120 days (about four months) to buy a house in the UK. This is way longer than in Australia, for instance, which takes 35 days. New tech being tested by UK banks aims to cut the average in half, which should help with lowering the chances of sales falling through and cut costs by about £1,600 on average. * SO WHAT? * The new tech will cut out mortgage brokers and conveyancers and will involve deposits being tokenised and being on the blockchain. Within the token itself, the loan and property rights will be digitised while payment obligations and property rights will go through automatically. Some banks reckon that they will be able to transact tokenised mortgages in less than three years. If this works, it could be transformational!

Working from home blamed for surge in youth unemployment (Daily Telegraph, Hans van Leeuwen) cites a study by the New York Federal Reserve which concluded that working from home was to blame for almost two-thirds of the recent rise in unemployment among uni grads. While more experienced workers can execute tasks with remote supervision, those with less experience are less able to do so – and that has weakened incentives to hire younger workers. This could explain our own youth unemployment situation – although I think that’s also got a lot to do with the government jacking up employment costs.

Love the improvisation in this video! This reminds me of when I was at school sitting at the back of chemistry with my drummer mate who used to make improvised “drumkits” with any objects that came to hand. It looks to me like this guy is using tinned tomatoes as his cowbell…

Donald Trump claims Israel and Hizbollah agree ceasefire after Iran threats (Financial Times, Najmeh Bozorgmehr and Andrew England) highlights Trump’s latest war claims – firstly, he’s reassured everyone that Israel and Hizbollah have said that “the shooting will stop” whilst also saying that talks with Iran were “continuing, at a rapid pace” and that an agreement with the Iranians to extend the “ceasefire” and reopen the Strait of Hormuz would happen “over the next week”. All this posturing came just hours after Iranian news agencies said that Tehran was suspending negotiations with the US. At this point, anything that comes out of the president’s mouth is just noise but I guess that the media needs sound-bites.

Donald Trump drops $1.8bn ‘anti-weaponisation’ fund (Financial Times, Ella Lee and James Politi) signals the president’s decision to abandon his plan for a $1.8bn “anti-weaponisation” fund that would dish out the dosh to his mates for being targeted by the justice system under Joe Biden. This only came after a court ruling last week temporarily blocked the fund. Trump’s DoJ said that it strongly disagreed with the decision but the administration said that it will abide by it. That being said, it is technically possible for him to revive it. * SO WHAT? * The $1.8bn fund was created last month to give alleged “victims” of purported “weaponisation and lawfare” the financial wherewithal to get payouts and formal apologies from the government. The fund was

strongly criticised for being a way for Capitol Hill rioters to get compensation and Democrats said that this was a good example of “an abuse of executive power”. Even the Republicans weren’t keen and urged the president to withdraw his support for it.

Meanwhile, in Europe, Mette Frederiksen secures third term as Danish premier after coalition deal (Financial Times, Richard Milne) shows that the Danish PM has finally been able to form a coalition government following over two months of negotiations with rival parties since her narrow victory in the elections in March. Denmark now has a four-party centre-left coalition government. This sounds like a recipe for disaster (because there’s a risk they’ll all pull in different directions), but let’s hope that it works!

Then in Hungarian PM to remove president and other ‘Orbán puppets’ from office (Financial Times, Marton Dunai) we see that the newly-elected PM, Péter Magyar, has promised to change the constitution in order to get rid of predecessor Orbán’s stooges and have a proper clear-out. Magyar said that “We will modify the constitution…and will restore the rule of law and Hungarian democracy” but it seems that not everyone is willing to go quietly – the country’s president, Tamás Sulyok, being one of them. Magyar’s conservative Tisza party won a parliamentary supermajority in the recent election, so he has momentum behind him.

Chinese firms’ market share gains driven by subsidies, says OECD (Financial Times, Peter Foster and Joe Leahy) cites the not-particularly-surprising conclusion from the OECD’s latest report that subsidies and cheap loans have been behind Chinese companies’ stellar growth in 15 key industrial sectors. They attributed almost 60% of Chinese firms’ global market share gains since 2005 to subsidies! The report suggests that Chinese firms got between three and eight times more government support on average in 2024 than then 38 OECD countries. * SO WHAT? * I think that everyone has known it for quite some time, so this is just the OECD is actually putting a number on it. It’s all a bit academic because in many cases, it’s too late to do anything about it (think solar panels, rare earths etc.). I believe that there are many factors at work here but I think that the main reason why so many countries have turned a blind eye to this for so long is that, over the last twenty or so years (but particularly in the last ten) everyone has been keen to trade with the Chinese because they could provide decent enough products and materials for the best prices whilst also arguably being the world’s biggest growth driver when other macroeconomic events (like the financial crisis, Brexit, Covid, the Ukraine War and now wars in the Middle East) have forced everyone to rely more on them. The country has sucked in commodities and resources when markets were patchy elsewhere as it pushed forward in so many areas – and now everyone is complaining. The Chinese will probably just see this as sour grapes and keep moving forward. I think that the only way to push back here and not let China and the US have a monopoly on all the good stuff is to form alternative alliances (perhaps with Europe and, when things get calmer, the Gulf states). Europe’s previous perma-slumber has been rudely interrupted by America’s unreliability and China’s obvious dominance in raw materials (among many other areas) and there are now many more reasons to pull together – or we’ll just get left behind! I believe that an increased desire to have “European champions” will power M&A against the backdrop of a less draconian regulatory regime that will encourage such activity and not hinder it.

Britain has rarely been this anti-growth, says M&S chairman (Daily Telegraph, Hannah Boland and Tom Saunders) cites criticism from the chairman of M&S, Archie Norman, about the effect of high taxes and too much bureaucracy on the growth prospects for British businesses that is hollowing out the high streets. This is having a detrimental effect on youth employment and, the boss of Britain’s biggest pub company, Stonegate, remarked yesterday that “We don’t lack the desire to hire young people; we lack the economic breathing room to do so”. Nearly a fifth of young people set to be unemployed next year (The Times, Jack Barnett) cites the latest forecasts from the BCC which warn that a toxic combination of higher taxes, rises in the minimum wage and the ongoing effects of AI will result in a joblessness rate of 17.8% in the 16-24 age group in 2027 following its rise to 16.9% this year. I would have thought that this is a factor at play in Confidence in the value of a degree hits record low in England (Financial Times, Amy Borrett) that cites the latest British Social Attitudes (BSA) survey which shows that 22% of respondents disagreed with the statement that a university degree is worthwhile – a marked decrease from the 46% in 2018. This is the first time since 2005 that negative sentiment towards uni education has been greater than positive sentiment. * SO WHAT? * It’s tough to be young at the moment! The received wisdom until now has generally been that going to university is a worthwhile and positive experience but rising costs, falling employment prospects and fear of massive debt obligations is questioning this. If you factor in uncertainties surrounding the precarious finances of these institutions, striking academics at the worst of times and the prospect of AI rendering courses obsolete you can understand the reticence. I am a firm believer of the positive nature of university – if done for the right reasons at the right place and with the right intentions. However, in order to fix the system, the government is going to have to get its hands dirty and make some unpopular decisions that will take some time to implement.

In Florida sues OpenAI and Sam Altman for ‘hurting’ children (Financial Times, Joe Miller) we see that the US state of Florida filed a lawsuit against OpenAI and Sam Altman yesterday alleging that its chatbots have inflicted a “litany of harms” on Americans by releasing products that it knows are addictive and unsafe, particularly for kids. The office is also considering action over alleged harms caused by other leading AI models. I am sure that everyone is going to watch how this one unfolds…

Meanwhile, Alphabet to sell $80bn in stock to fund AI spending spree (Financial Times, Ryan McMorrow, Eric Platt and Oliver Barnes) highlights yesterday’s announcement that it’s going to raise up to $80bn in equity to finance its massive AI infrastructure investments. $10bn of this will be via a share sale to Berkshire Hathaway. Execs want to do this in order to diversify their sources of funding. * SO WHAT? * This is a big deal because it’s the company’s first stock offering in over twenty years! The company sees this as “an expansionary moment” and that the fund raising will help it “support the significant growth opportunity ahead”. AI spending has boosted growth at Google Cloud. This is pretty epic!

Then in Anthropic files for blockbuster initial public offering (Financial Times, George Hammond) we see that the AI giant has now filed for an IPO that’s probably going to value it at over $1tn less than a week after it closed its latest funding round! This isn’t really all that much of a surprise and, while we’re on the subject of Anthropic, Anthropic offers EU access to Mythos (Financial Times, Laura Dubois and Madhumita Murgia) shows that the company is in talks with the EU to allow access to its cyber security tool. It is currently available in the US and UK. * SO WHAT? * The IPO thing wasn’t all that much of a surprise although I was expecting at least a few weeks to pass between its latest funding and an announcement! Still, all eyes will now be on when OpenAI’s going to throw its hat in the ring for IPO superstardom. Confidence in Big Tech continues to abound!

In semiconductor news, Nvidia unveils PC ‘superchip’ in challenge to Apple and Intel (Financial Times, Michael Acton and Eleanor Olcott) shows that the company is going to launch a new chip for PCs this year, pitting it directly against the likes of Apple, Qualcomm, Intel and AMD. Thus far, Nvidia has concentrated on products for AI infrastructure. The likes of Dell, Asus and HP will use what Nvidia describes as “the most efficient PC chip ever built”. * SO WHAT? * This is an interesting pivot for the company but it sounds like a good idea because there is an expected windfall coming where consumers will be looking to upgrade from their existing “non-AI” devices to AI-enabled ones. The idea is that they will be better able to cope with the latest AI apps. The new chip will be able to run massive AI models locally on the drive. Nvidia’s CEO said that new AI-enabled PCs will have responsive AI agents that will ultimately displace the mouse and keyboard as the main way that users interact with their computers. Such AI-enabled devices will hit the market later this year and will be aimed initially at the “premium” end of PC users –

meaning AI developers, creators and gamers. After that there will be other models aimed at the mass-market.

Amid all the AI hype at the moment, I thought there were some interesting articles on the downsides! ‘More harmful than helpful’: young people sour on AI (Financial Times, Jamie John) cites research by the FT which shows that Gen Zs are increasingly concluding that while AI has been portrayed as something to improve productivity, creativity and employability it’s actually harming their prospects. One person who had recently completed  a master’s degree in computing at Imperial College London observed that “It feels like junior software developers are basically just micromanaging AI at this point”. Candidates are using AI to generate more applications, employers are using AI to screen them and candidates are pushed through multiple rounds of automated interviews and tests before they even encounter a human. Estate agents under fire for using AI pictures in property listing (Daily Telegraph, James Warrington) reflects another example of how AI has crept into other areas of our lives – it’s being used to make properties better than they actually are! Winkworth, which has over 100 offices across the UK, is currently in hot water for using AI to enhance photos of a number of its properties in London. It seems that they are not the only ones doing this – Savills and Knight Frank also use AI to enhance their photos!

When AI is more expensive than people, why replace the people? (Daily Telegraph, Andrew Orlowski) is an interesting article which points out that, further to the practice of employees being discouraged from “token maxxing”, if the cost of using AI actually ends up costing more than having humans do something – then what’s the point of sacking everyone? After a major growth phase, it seems that even tech companies are thinking about how they are going to pay the energy bills and unless it can be shown exactly how AI can enhance productivity then perhaps adoption is going to slow down. * SO WHAT? * I suspect that, over time, we are going to work out where AI can be deployed in the most efficient way and where its utility is questionable. At the moment, it seems that everyone is assuming that it’ll be able to do everything. OK, so it will get better – and at pace – but I really do believe that human involvement will increasingly become part of more premium experiences.

Tencent moves closer to launching AI agent for China’s most-used app (Financial Times, Zijing Wu) highlights what could be a pretty amazing development – the embedding of an AI agent for WeChat, the “everything” app used by China’s 1.4bn people that brings together messaging, social media, ride-hailing and payments. It sounds like there will be a limited rollout sometime this month before there’s a proper public one. * SO WHAT? * I think that this sounds amazing. Given how many people use the app for so many things, it makes sense to make the experience more “agentic” and bring all the apps together. However, it’s not clear yet as to whether there’s enough computing power to support it – and this could be its Achilles heel.

In a quick scoot around some of today’s other interesting stories, A US firm is eyeing easyJet — but would a takeover be allowed? (The Times, Robert Lea) shows that US private credit firm Castlelake is putting in an offer to buy easyJet. The budget airline is listed in London and is headquartered here but its licences are governed by the EU – and under EU rules, no non-European entity is allowed to take a stake of 50% or more in an EU airline. Why does Castlelake want to buy easyJet? (Financial Times, Peter Campbell and Ivan Levingston) suggests that it’s putting in a cheeky bid to take advantage of a depressed share price, which has fallen by almost a third in the last 12 months and by over 75% since its peak 11 years ago. EasyJet says takeover bid would be ‘highly opportunistic’ as shares jump (Financial Times, Peter Campbell and Aaron Kirchfeld) shows that the airline itself is of this opinion and EasyJet may be budget, but an acquirer won’t get it cheap (Financial Times, Lex) suggests that if it’s going to work, an acquiror is going to have to pay a hefty premium for it. It sounds like this could get very messy…

Elsewhere, People Inc. Offers to Buy Rest of MGM Resorts, Valuing Company at Around $12.4 Billion (Wall Street Journal, Jessica Toonkel) shows that People Inc, which already owns a 26.1% in MGM Resorts, has offered to buy the rest of the company to take it private and Entain stake in play as Barry Diller offers $18bn for MGM Resorts (The Times, Jessica Newman) highlights the fact that this will probably involve Entain getting a bit of a windfall for its 50% stake. * SO WHAT? * There’s speculation that Entain itself might be taken over as there seems to be a bit of consolidation going on in the industry what with Fertitta buying Caesars Entertainment last week…

Then in General Mills sells Häagen-Dazs ice cream stores in China (Financial Times, Thomas Hale) we see that US company General Mills has become the latest foreign company to give up the day-to-day operations in China and hand over to a group of local investors. Starbucks and Burger King have made similar moves as competition in the market has become far more intense.

It’s possible that I may have posted this video on here in the past (or something like it) but anyway – it looks like this lady is a fun person to drive with!

In Robotaxis Are Spreading Across the U.S.—and So Is the Backlash (Wall Street Journal, Sean McLain) we see that resistance is building towards robot taxis just at a time when they are supposed to be going more mainstream. They’ve been barricaded in a cul-de-sac, taken passengers into flooded streets and then got stranded themselves, blocked an ambulance responding to a mass shooting and passed stationary school buses. The likes of Alphabet’s Waymo, Amazon’s Zoox and Tesla continue to emphasise their safety record but even Musk said that Tesla’s moving forward cautiously on the robotaxi  rollout because the vehicles get confused when facing atypical traffic situations. * SO WHAT? * Musk said last year that robotaxis would soon be available to half of the US population but it would seem that ongoing safety issues and concerns about jobs for human taxi drivers are holding back a rapid rollout. I still believe that one of the main sticking points is fault and it’s going to be a really tricky problem to solve. If robotaxis are widely adopted, there are surely bound to be accidents and fatalities. When humans are behind the wheel, the finger of blame can be pointed and compensation can be decided accordingly. However, in the case of an autonomous taxi, is it the software maker’s fault? The hardware maker’s fault? Each side will blame the other and nothing will get done. The only real solution I can think of is if governments have a central compensation pot or perhaps a part of everyone’s road tax contributes to a central fund. But then when it comes to dishing out compensation, how do you decide the cost of someone’s life? Their inability to walk? The psychological damage? Although I think that there are many good arguments for robotaxis and autonomous vehicles in general, these knotty questions will take a long time to be resolved – and that’s what’s going to delay their advance the most IMO.

Almost all businesses yet to profit from AI (The Times, Emma Powell and James Hurley) reflects the observation from the CEO of Accenture UK and Ireland that around 90% of companies have not yet seen any financial benefit from using AI despite the sharp rise in its uptake. He said that this was due to companies not applying it effectively “across people, process and technology”. * SO WHAT? * Funnily enough, Accenture is just one of the many management consultancies that can help you to tap into the benefits of AI (for a fee, of course!), so the guy is obviously talking his own book! Perhaps that’s why this industry is actually taking on MORE graduates, as per Bain, BCG and Alvarez in hiring spree: ‘We actually need grads’ (The Times, Daniel Woolfson) which argues that juniors will be assisted by AI, not replaced by it.

Meanwhile, Higher taxes driving youth jobs crisis, hospitality bosses say (The Times, Jessica Newman) cites hospitality industry bosses as saying that the chancellor should reverse changes to NICs due to this being the major reason behind the major slowdown in the employment of younger people. The publication of Alan Milburn’s report last week made for grim reading and pointed out that businesses were getting more reluctant about taking on younger workers because of the higher costs involved. UKHospitality, the industry body, also threw its weight behind the argument. We need a plan!!!

Wall Street bulls bet US stocks rally will defy bubble fears (Financial Times, Kate Duguid and Harriet Clarfelt) observes that concerns about the bursting of the AI bubble are falling on deaf ears as the S&P 500 hit record  closing highs on 11 occasions over the course of May while Q1 earnings smashed expectations across the board. The bull argument is advances in AI tech and massive investment in chips and data centres will continue to power outrageous growth and profitability (eventually). Just to illustrate the point, Sandisk’s share price has risen by an impressive 600% in the year so far while the share prices of other AI plays including Micron, Dell, Intel, Seagate and Western Digital have climbed 200% over the same time period! * SO WHAT? * I guess that the danger is that AI stocks make up an increasingly big proportion of the indexes that they’re in and so they drag the whole thing with them – but I’d argue that this can potentially mask a lot of poor performance underneath. That being said, the fact that Q1 results in the US have been pretty robust despite the backdrop of wars and a lack of consumer confidence would suggest that this is either a last hurrah or that all the worries have been overdone. I think that it’s going to be really interesting to see what happens when all the mega-IPOs hit the market. A lot of investors are going to be selling off stocks that aren’t AI-related but that have done well in order to fund IPO participation – and I’d be trying to find out what those are in the run-up.

Berkshire Hathaway to Buy Home Builder Taylor Morrison for $6.8 Billion (Wall Street Journal, Rachel Louise Ensign) shows that Berkshire Hathaway agreed yesterday to buy Taylor Morrison Home Corp for $6.8bn in cash. This is one of the first big investments by CEO Greg Abel, who took over from Warren Buffett as CEO in January. It’ll be interesting to see how this pans out as everyone will be watching!

Then in Investors race to get exposure to SpaceX ahead of IPO (Financial Times, Emily Herbert and Steve Johnson) we see that investors have been falling over themselves to get some kind of exposure to SpaceX ahead of its much-anticipated IPO. They’ve been doing this since December last year by putting money into mutual funds and four ETFs that hold slices of SpaceX, according to data from Morningstar. Some new products are likely to be launched and at least 14 ETFs are going to be offering exposure once the flotation happens. The demand is going crazy at the moment, so this could get very interesting. * SO WHAT? * SpaceX’s flotation needs to go well given the heightened expectations but I don’t think there will be any problems because it’s such an interesting integrated AI and satellite play. A successful launch will no doubt bode well for valuations of the likes of OpenAI and Anthropic when they eventually come to market as well.

Jamming-resistant radio maker seeks $3bn-plus sale (Financial Times, Aaron Kirchfield) highlights efforts by Radionor Communications, a Norwegian firm that makes tactical broadband radios for the battlefield, to look for a buyer. It’s engaged Deutsche Bank and ABG to advise them on a sale. The company has seen a major increase in demand for its comms equipment which sends very narrow signals that make detection and disruption difficult. Their radios are currently being used in Ukraine and by the Norwegian Armed Forces. * SO WHAT? * I think that there will be a lot of consolidation in the defence sector as strong demand should underpin future growth and it’s a fragmented industry. This will get more interesting as time goes on!

SoftBank overtakes Toyota to become Japan’s largest company (Financial Times, David Keohane and Leo Lewis) marks a historic moment as tech giant SoftBank has now become Japan’s most valuable company by market cap thanks to AI demand powering the tech companies in its portfolio. Toyota has been Japan’s biggest company for over two decades! SoftBank’s share price has shot up by almost 73% so far this year. Meanwhile, SoftBank pledges €75bn to build Europe’s biggest AI facility in France (Financial Times, Tim Bradshaw, Sarah White and David Keohane) highlights an investment pledge to funnel up to €75bn in a network of AI computing clusters in France in what could be Europe’s biggest data centre project. * SO WHAT? * This is an impressive feat for SoftBank that has had quite the journey to get to this point! CEO Masayoshi Son has been a major disruptor for around thirty-odd years now and to overtake a veteran like Toyota is quite something. I think that it shows two big things – one is the massive hype of tech (and AI in particular) and the other is the downfall of an automotive titan.

SoftBank seems to be going all-in on AI infrastructure to the extent that it is pushing aside original plans for the $500bn Stargate joint venture that had been intended to provide massive capacity for the exclusive use of OpenAI. It’s not clear yet who the customers are going to be for this French venture.

Then in Intel targets Nvidia with new AI chip by year end (Financial Times, Michael Acton) we see that Intel has put a marker down by saying that it plans to to produce an AI chip by the end of this year that uses cheaper memory and cooling tech than rival products from Nvidia and AMD. Its new chip focuses on speeding up “inference” tasks rather than the training of models, which is the area that Nvidia dominates. * SO WHAT? * This sounds like a decent move and will get Intel a seat at the AI table. Intel has been in limbo for a few years now and stood on the sidelines whilst watching Nvidia’s flight into the stratosphere.

In a quick scoot around some of today’s other interesting stories, China’s activewear boom puts spring in foreign brands’ step (Financial Times, Thomas Hale) shows that Rapha and Lululemon are proving to be really popular in China as the activewear market is booming. Other companies including On and Columbia Sportswear have also been benefitting from the trend despite the wider trickier economic backdrop. * SO WHAT? * It seems that the Chinese consumer base is embracing a more active lifestyle – and getting all the right gear is part of that. Other makers definitely need to take note of that!

Meanwhile, House prices set to fall 2% as Iran war pushes up mortgage rates (The Times, Melissa York) shows that Iran war-driven higher mortgage rates are going to cause house prices to fall this year, according to the latest predictions from Savills. The war has “fundamentally changed” the company’s outlook for this year, unsurprisingly. Buyers are withdrawing and more homes have come onto the market, partly thanks to landlords leaving the market because of rental reforms that came into effect last month. The company expects prices to bounce back next year.

I think that it would be fair to say that I have never seen a burrito like this before! Amazing!

Benjamin Netanyahu orders Israeli forces to take control of 70% of Gaza (Financial Times, James Schotter) shows that Israel’s PM has ordered his military to take control of at least 70% of Gaza, which goes against the terms of the US-brokered truce between Israel and Hamas. The comments came after Israel upped the ante once more against Hamas in Gaza and Hizbollah in Lebanon. Israel had withdrawn to the so-called “Yellow Line” in Gaza which gave them control of about 53% of the enclave – so this is a significant change.

Meanwhile, Washington nearing deal to extend Iran ceasefire, US officials say (Financial Times, Abigail Hauslohner, Andrew England and Najmeh Bozorgmehr) highlights the latest talk coming from Washington, but let’s face it, there have been so many false dawns that it’s only

really worth mentioning in passing. As usual, the Americans say that a deal is close to extend the “ceasefire” by 60 days and the Iranians say the opposite.

Then in Chevron CEO warns oil prices to jump over summer as supplies dwindle (Financial Times, Jamie Smyth) we see that the oil chief warned that oil prices are likely to increase over the next two months thanks to falling inventories. It’s these inventories that have been holding prices back from what they could be, so once they run out, prices could spike dramatically. The comments come after prices have fallen by 10% over the past week amid rising optimism about a deal between the US and Iran.

Chip stocks race towards biggest gains since dotcom era on AI demand (Financial Times, George Steer and Michael Acton) confirms the effects that the AI boom is having on markets – the Philadelphia Semiconductor Index that tracks 30 of the world’s biggest US-listed chip manufacturers is currently on course to hit its biggest annual return since 1999! It’s already up 75% since the start of the year. Demand for chips from the likes of Meta, Alphabet, Amazon, Microsoft and others to power their AI ambitions appears to be continuing unabated. Nvidia is still the world’s biggest public company with a market cap of $5.1tn. The world’s wildest stock market (Daily Telegraph, Hans can Leeuwen) highlights the outrageous performance of Korea’s KOSPI index – and that’s also been thanks to Korean companies like Samsung and SK Hynix being part of the AI mega-wave. Domestic retail investors have been enjoying exceptional returns but foreign investors have been a bit more reticent. Just to give you an idea of the scale of what’s happening in South Korea at the moment, the KOSPI started in 1983 and took over 18 years to go from 1,000 to 2,000 points. It then took another 13 years to hit 3,000. The rise from 4,000 to 7,000 took just four months and the boost to 8,000 took just two weeks. The index is up by over 90% since the beginning of the year! No wonder Koreans are all talking about investing! And here we are in the UK with a squirrel called “Savvy” 🤣🤣🤣! * SO WHAT? * Yes it all feels pretty precarious and valuations are already silly on conventional metrics (and getting sillier by the day) but the money keeps coming in, datacentre demand is through the roof and anything to do with this supply chain is going bananas. When you consider that this bubble is still going on while wars are raging in the Middle East AND the world’s on the brink of a recession, it makes such stellar performances all the more impressive because under “normal” circumstances you would expect more muted performance. The problem comes, though, when this AI gravy train slows down because everything is so skewed towards it that the market falls will be dramatic. Until then, though, it’s party time. Perhaps by then the “boring” utilities industry will kick in with projects that power not only AI – but the electrification switch in cars. I have long said that any slack resulting from a cooling off of AI demand will be taken up by mass EV adoption – and I stand by that!

Then in Elon Musk’s tweet undermines SpaceX’s claims about Anthropic data centre deal (Financial Times, Ryan McMorrow and George Hammond) we see that Musk has caused a bit of a kerfuffle with a post he put on X saying that the recent deal announced with Anthropic to use some of its datacentre capacity was only “a 180-day lease” and not the three-year agreement touted in SpaceX’s pre-IPO filing last week! * SO WHAT? * The pre-IPO filing said that Anthropic was going to pay SpaceX “$1.25bn per month through May 2029” which means the total value would have been a whopping $45bn, which would have gone a long way to mitigate the massive amounts that SpaceX is shelling out at the moment. However, Musk said yesterday that the Anthropic arrangement was “a 180 day lease with 90 day notice mutual cancellation”, which

means that the contract could be worth way less. If this was any other company with any other CEO such words could be hugely damaging. However, I suspect that Musk is taking the calculated gamble that investors are just going to throw money at him anyway – so he might as well put this into the mix now before it can have any effect on the share price.

While we’re on the topic of Anthropic, Anthropic finalises $65bn funding deal to surpass OpenAI’s valuation (Financial Times, George Hammond) highlights the success of the company’s latest funding round, showing that its perceived value has now tripled in just three months to help it overtake its arch rival OpenAI. This funding round means that Anthropic is now worth $900bn! I wonder what valuation it’s going to go for in a much-anticipated flotation! Surely a nice round trillion dollars, no??

Further to what I said yesterday about “token maxxing”, Amazon scraps AI leaderboard to stop workers chasing usage scores (Financial Times, Rafe Rosner-Uddin) shows that the tech giant has shut down the internal company AI-usage leaderboard due to the practice of employees padding out their AI usage with meaningless activity that has just increased costs. The company said “please don’t use AI just for the sake of using AI” 🤣🤣🤣, adding that its “beta dashboard was not a formal or approved tool, and has since been depracated”. Haha yeah right.

Meanwhile, Kirkland & Ellis to spend $500mn building its own AI technology (Financial Times, Suzi Ring and Kaye Wiggins) shows that the world’s highest grossing law firm has decided to set aside a whopping amount of money to created its own AI platform rather than rely on adapting existing tools like Harvey or Legora. The firm’s chair said “The idea is that we’re going to take the collective intelligence of our institution and be able to deploy that throughout the firm”. Kirkland will pay for this out of its own revenues. * SO WHAT? * This does look like a massive cash black hole. It would be like a company deciding to ditch Microsoft Excel and make its own spreadsheet software – admirable, expensive and potentially pointless. Right now, the tech companies are arguably in an advanced development phase and are working closely with various law firms (Freshfields is working with Anthropic, for instance) to get their software right. I think that working with various firms rather than working on just one firm’s AI needs risks missing out on best practice. I also believe that this is a massive and expensive ego trip. If others adopt existing software successfully, they will be able to lower bills and do more volume whilst Kirkland will be watching the business flow away. Perhaps there will be Kirkland partners who don’t want to see their profit share decimated by this project and would be more amenable to leaving to join rivals. Kirkland could then risk getting the worst of both worlds – less business AND an inferior AI model that it gets stuck with because no-one will have the ⚽⚽ to get rid of it. Good luck to them, though…

With Caesars Deal, Tilman Fertitta Doubles Down on Vegas Comeback (Wall Street Journal, Katherine Sayre and Peter Grant) highlights the announcement that Fertitta Entertainment has agreed to buy Caesars Entertainment for about $5.7bn in an all-cash deal. It’s clearly a bit of a gamble but then Caesars’ share price has cratered by 70% over the last five years! Caesars’ billionaire buyer hopes luck and leverage go hand in hand (Financial Times, Lex) questions whether the financials will stack up over the longer term but we’ll have to see more detail about what the plan is for the future of the combined entity!

In other M&A news, Belgian gunmaker FN Browning to buy UK sniper producer (Financial Times, Laura Dubois) shows that Belgian gunmaker FN Browning is buying UK sniper maker Accuracy International whilst it bids to get on Britain’s rifle replacement programme. Accuracy International is based in Portsmouth and specialises in high-precision sniper rifles. The UK has launched a programme to replace its service assault rifles for the first time in over forty years

and the MoD has specified that it wants the rifles to be manufactured in the UK. FN Browning’s chief said that the acquisition showed the company’s commitment to ensuring that manufacturing stays in the UK. * SO WHAT? * I think that there’s going to be loads of M&A going on in the defence space as players that have survived and thrived over a lot of lean years for government defence spending are going to be in a position to hoover up smaller manufacturers that have had a harder time.

Then in Oura launches Ring 5, world’s smallest smart ring, as it heads towards IPO (The Guardian, Samuel Gibbs) we see that the Finnish-American smart ring company has launched the latest version of its Ring wearable and is on track to have an IPO later this year. The Ring 5 is the world’s smallest smart ring and is 40% smaller with better battery life than the previous version! The new ring will cost from £399 when it is on sale from 4th June.

In a quick scoot around some of today’s other interesting stories, Stalling London construction makes Labour target look out of reach (The Times, Melissa York) cites a new report from JLL, the property consultancy, which says that London has only built 7% of the homes it had planned to last year thanks to thriftier buyers, the exit of investors, skyrocketing service charges and planning delays. This does not bode well for the government hitting its very ambitious targets. Meanwhile, House hunters do like to buy beside the seaside — but it’s not cheap (The Times, Charlotte Bend) cites Rightmove data which shows that although average house prices went largely sideways, houses by the sea continue to attract a premium.

Then in One in seven university graduates are Neets (Daily Telegraph, Szu Ping Chan and Emma Taggart) we see the disappointing news from a much-awaited report into worklessness

that the situation is pretty dire at the moment for young people as a higher proportion of them are Not in Education Employment or Training than has been the case for 25 years. The government really needs to step in here.

Then in Chinese retailer Temu fined €200m by EU over unsafe products (The Times, Isabella Fish) we see that the European Commission has slapped Temu with a big fine for allowing the sale of illegal and unsafe products. This is the biggest penalty issued so far under the EU’s Digital Services Act. It’s taken two years of investigation to get to this point! Temu obviously objected to this and is considering its next move…

I thought I’d end the week on a dance! This is quite mesmerising IMO!

US carries out fresh strikes on Iran (Financial Times, Jacob Judah and James Politi) tells us that the Americans downed four Iranian one-way attack drones and hit a ground control station in southern Iran, according to a US official. The moves were described as “purely defensive” and “intended to maintain the ceasefire”. Oil price rises after US strikes on Iran dampen peace deal hopes (The Times, Chris Dorrell) reflects the predictable reaction to it and Why a global recession is on the cards as Iran war enters fourth month (The Times, Mehreen Khan) cites

forecasts by energy consultancy Wood Mackenzie which say that if the Strait of Hormuz stays closed until the end of the year, oil prices could go from $94 a barrel to $200 – and that would kick-start a global recession. Advisory firm Rapidan Energy Group warned that the world could fall into a downturn of 2008 proportions if the Strait is closed until August. So far, there’s been a lot of talk and not much action. Let’s see what Trump says this weekend when oil markets are closed and he can say whatever he wants…

Consumers continue to suffer in UK heatwave triggers price rises for hot tubs and air conditioning units (The Guardian, Sarah Marsh) which cites Guardian research showing that the prices of some items have risen considerably during this hot weather spell we’re having at the moment. One hot tub saw its price double in just a week from £160 on 21st May to £299 now while other items like the Dyson Cooling Tower and the Morphy Richards Flexi Freeze 12K BTU have also seen significant price rises. As if that’s not bad enough, Energy price cap in Great Britain to rise by 13% from July (The Guardian, Jillian Ambrose and Joanna Partridge) highlights more utility bill misery in store as the increased energy price cap will add just over £200 to the average annual energy bill. The increase won’t kick in until July, however. * SO WHAT? * All of this just keeps chipping away at household finances and discretionary spending power. Unfortunately, poorer households are going to get poorer and everyone else (apart from the wealthiest end of society) is going to have to fight that much harder to keep their heads above water. You can’t go on holiday to forget your troubles because of the cost and it’s difficult to get a job these days because of AI and/or the government making it prohibitively expensive for employers to take anyone on. I think many people will just hunker down and hope that the economic storm will subside.

Lidl overtakes Morrisons to become fifth largest supermarket in Great Britain (The Guardian, Sarah Butler) highlights the inevitable – that the budget-friendly German supermarket has become the fifth biggest supermarket in the UK by market share, according to the latest figures by Worldpanel. Aldi sits just above it at number four – but Aldi is only 1% behind the ailing Asda,

which continues to slide. At the other end of the scale, Waitrose steps up competition for affluent shoppers with price cuts (Financial Times, Philip Stafford) shows that the posh retailer is cutting prices of own-brand products in order to claw back ground lost to M&S and Ocado. * SO WHAT? * Asda just continues its slide into oblivion while the German discounters continue their rise! I’ve said this many times before but if the supermarket wants to reverse its course, it needs to find its difference and give customers reason to go there. Lidl has its middle aisle and in-store bakery and Aldi has its middle aisle – Asda has nothing.

Then in TG Jones owner Modella Capital snaps up Flying Tiger Copenhagen (The Times, Guy Taylor) we see that the private equity firm has swooped in to buy Flying Tiger Copenhagen for an undisclosed sum (I think this is code for “dirt cheap because Flying Tiger was desperate”). God knows whether this is going to work out because Modella’s acquisition of WH Smith’s high street stores has proven to be a right turkey from what I can see! It’s also not done much with Hobbycraft since it bought it either. * SO WHAT? * Modella seems to have the opposite of the Midas Touch so we’ll have to see whether the company can actually do something with the brands it has picked up over the last few years. I think that, if it has the appetite for it, TG Jones, Hobbycraft and Flying Tiger could actually be quite an interesting combination that might work. You have the TG Jones retail network presence (and possibly buying power), the Hobbycraft educational element and Flying Tiger’s fun factor. If Modella could somehow meld them together, you’d get a retail experience that could be a breath of fresh air on the UK high street!

China overhauls world’s biggest surveillance network with advanced AI (Financial Times, Eleanor Olcott) is a really interesting article that highlights state efforts to integrate AI with its surveillance network to give the state more powers to track people, analyse behaviour and forecast potential unrest as events are unfolding! Local governments across China are using new AI-powered surveillance systems as the state pushes for so-called “predictive policing”. This has distinct “Minority Report” vibes, don’t you think?? Chinese groups including Hikvision and Huawei have released products over the last two years that combine computer vision and LLMs. The systems are trained to process data directly on devices, which allows analysis at the point of capture and can predict and issue alerts for behaviours including erratic driving, crowd-gatherings, unauthorised entry and suicidal behaviour. * SO WHAT? * This sounds pretty scary, don’t you think?? You also wonder, however, whether things like this will catch on in other countries as public sector budgets get tighter.

Then in EU pushes for ‘tech sovereignty’ to cut reliance on US (Financial Times, Barbara Moens) we see that the EU is currently (and belatedly) putting together a tech strategy calling for the bloc to “reclaim its place in the global race for geoeconomic power” at a “defining moment to assert its technological sovereignty”. This involves the accelerated construction of European data centres and the prioritisation of European cloud and AI technologies. * SO WHAT? * This is a major departure in the EC’s approach to Big Tech but I do wonder whether it’s all too little too late. Much as though I’d like to think that bridging the gap with the Americans is possible, I find it hard to believe that it can be done because they are so far ahead. The heart of the new strategy is the Cloud and AI Development Act which will accelerate the rollout of data centres and encourage the development of “sovereign” cloud and AI. All of this could boost the likes of SAP, Mistral and OVHCloud, although I’m sure the Americans aren’t going to take all this lying down. At the moment, over 70% of the cloud market in the EU is accounted for by Amazon, Microsoft and Google.

Robinhood to let investors use AI chatbots for share trading (Financial Times, George Steer and Jill R Shah) highlights the launch of a new feature that will allow clients to use AI chatbots for share trading. Users could use the likes of Anthropic’s Claude Code and OpenAI’s ChatGPT to build portfolios, automate trading strategies and place orders. It is expected that there’s going to be a huge rise in brokerages to offer agentic trading to their users. * SO WHAT? * I think this is an interesting idea – and with a bit of intelligent prompting and iron discipline this could be a winner. From a practical point of view, it might mean that users won’t have to watch markets 24/7 and they can put in parameters that will stop them chasing losers and/or hanging on too long to stocks that have been going up. Whether or not this will actually improve performance, though, is still moot!

Out-of-control employees are blowing AI budgets alarmingly fast (Daily Telegraph, James Titcomb) highlights an interesting phenomenon – token maxxing! Companies have increasingly been tracking their workers’ use of AI tools. Some have been using the tools so much, however, that they blow through their allocations of tokens meaning that they have to buy more and breach their IT budgets! * SO WHAT? * It looks to me like employees are just playing the game so that they can reach their KPIs for AI usage but that companies hadn’t bargained for how quickly users burn through tokens – and whether all this AI usage is actually worth it in the end. Many users get a lot of access via a monthly subscription but some companies meter usage and pay by the “token”, which is usually a word or fragment of a word. Generating a 500-word essay could cost hundreds of tokens but programming a basic video game could cost a few thousand. Ultimately, if tokenmaxxing continues to increase, the cost benefit of using AI verses humans may not be so compelling.

In a quick scoot around some of today’s other interesting stories, How AI threatens the giants of consulting (Financial Times, Ellesheva Kissin) is a very long – but interesting – article which shows that the consulting industry is now changing due to the advent of AI. The major players have enjoyed the advantages of scale and experience for decades, but it now seems that individuals are leaving the security of such companies to start-up on their own with the help of AI. * SO WHAT? * In short, AI can give you “virtual scale” and private equity firms are increasingly willing to back these start-ups. Bigger firms are aware of the effect that AI is having and have already been responding by cutting headcount and cutting graduate recruitment. AI is able to automate the traditional drudgery of research, data summarisation and PowerPoint construction – the traditional bread and butter of consultancy work – and they know that their business models are going to have to change. KPMG scouts Silicon Valley start-ups in bid to head off AI disruption (Financial Times, Stephen Foley) is an example of where a Big Four company is trying to get ahead of the curve by working with tech companies before they become a threat but it looks like the industry might change from having generalist consultants working on issues to more specialist ones who actually have proper industry knowledge. Over time, the larger firms will build teams with deep industry knowledge, which means that they will hire experience (probably from the smaller start-up consultancies!) and fewer juniors. The continued existence of the billable hour, in this brave new world, looks questionable because the time-consuming work of reviewing contracts and document drafting means that the relationship between hours worked and value delivered becomes less tenable. Clients will want to move towards outcome-based

pricing in addition to subscriptions. Basically, this means that consultancies will be able to complete work in less time – which might mean lower fees – but they will be able to make up for that in volume. Overall, though, it looks like the bigger firms will survive. In the short term, mid-tier firms may be in most danger because they don’t have the money that the incumbents have available to throw at the problem – but they also don’t have the expertise of the smaller firms.

In energy-related news, Canada Moves Toward Energy Superpower Goal With German LNG Deal (Wall Street Journal, Paul Viera) shows that Canada has announced a deal to sell LNG to Germany as the country looks to capitalise on its oil and gas reserves and move it towards becoming an energy superpower. Germany’s state-owned utility SEFE has committed to buy a million metric tons of LNG annually for up to 20 years with shipments starting in the early 2030s. Surely there will be more of these types of deals to come as the world (including Canada) continues to try to wean itself off reliance on America.

Nuclear Power Startup Newcleo to Go Public in SPAC Deal (Wall Street Journal, Jennifer Hiller) highlights the intentions of the Paris-based nuclear power developer to do a SPAC-backed IPO that would value it at about $2.4bn. Nucleo said that this would help its bid to get into the American power market and finance existing projects in Europe. The new company will trade on the NASDAQ when the deal closes in the second half of the year.

If you’re having a challenging day, have a look at this! It’s quite possibly the cutest thing you’ll see today!

Iran accuses US of ‘flagrant’ ceasefire violations as back-channel talks continue (Financial Times, Bita Ghaffari and Andrew England) highlights the latest back-and-forth between the US and Iran as both sides continue to bicker and bomb each other (or not) and Iran starts to restore internet access after months-long blackout (Financial Times, Bita Ghaffari) shows that a modicum of normality has returned to the country as Iran’s president ordered the communications and information technology ministry to reconnect the global internet on Monday. There has been a near-total internet shutdown since February 28th, meaning that it has become the world’s longest recorded nationwide blackout. There’s not quite full access yet, though, and it’s still heavily censored.

Meanwhile, Donald Trump-backed candidate ousts Republican senator in Texas run-off (Financial Times, Stephanie Findlay) shows that things are continuing to go the president’s way in the lead-up to the midterm elections as his guy, Ken Paxton, easily beat senator John Cornyn in the Texas Republican head-to-head. Trump’s grip continues to tighten. Although Cornyn voted with Trump 99% of the time, he’s seen by the MAGA base as being a “Rino” – Republican In Name Only.

Back home, UK imposes sanctions on crypto exchange tied to billionaire Justin Sun (Financial Times, Polina Ivanova and Jill R Shah) highlights the UK Foreign Office’s decision to impose

sanctions on Huobi, which operates one of the biggest crypto exchanges by trading volume under the HTX brand, for allegedly supporting Russia’s financial sector. The sanctions have been put in place to limit the Kremlin’s ability to finance its war effort. Justin Sun is an adviser to HTX but is also closely associated with Trump.

In oil news, BP removes chair Albert Manifold over ‘serious’ governance and conduct concerns (The Guardian, Jasper Jolly) shows that the oil giant’s chair has been kicked out just eight months into the role over serious concerns about “important governance standards, oversight and conduct” and BP is deeply dysfunctional, but it could be worse (Financial Times, Lex) suggests that while BP has lost two chief executives and one board chair since 2023, the company has benefited from concentrating its efforts in oil and gas. Manifold has been key to this turnaround, so now he’s gone there may be lingering concerns about how quickly this strategy may be implemented going forward. * SO WHAT? * At the end of the day, if Manifold wasn’t right it was better to get rid of him quickly than stay with him and watch things get worse. BP now has a well-respected CEO in the form of Meg O’Neill and a very fortunate situation with regard to the current oil price so I wouldn’t expect things to go down the toilet from here. That being said, the revolving door nature of the top jobs at BP may scare some candidates off – but surely the rewards, powered by a fossil fuel-powered future – will be pretty good.

Samsung workers set for $400,000 bonus after deal to share AI profits (Financial Times, Daniel Tudor) highlights a tremendous outcome for workers at Samsung as their union has been fighting for months to get them access to a profit-sharing agreement that means that those in the memory chip division will get an average bonus of almost $400,000. Under the agreement, 78,000 semiconductor workers will get 10.5% of the company’s operating profit, equating to a bonus pool of an eye-watering $22.6bn. Around 40% of this will be shared equally and the remainder will be performance-related for each unit. Memory chip workers are therefore expected to get about $400,000 each while those in the loss-making Foundry and System LSI divisions will probably receive closer to $100,000 – $130,000. A similar deal was struck at rival Hynix last year. Both Samsung and SK Hynix are now $1tn companies thanks to the AI boom! * SO WHAT? * This is incredible, don’t you think?? These are eye-catching sums we’re talking about here and I wonder whether employees at other AI-related companies around the world will look at this and think that they’d like similar bonuses – wouldn’t you?? If this is adopted elsewhere, it could eventually hit margins…

Talking about bonuses, ByteDance offers AI team special stock to fend off poaching (Financial Times, Eleanor Olcott and Zijing Wu) shows that the TikTok owner is now offering special stock to employees of its AI lab to help fend off poaching from their rivals. Tencent is just one of the rivals that has been poaching its top researchers. * SO WHAT? * This is the first time that ByteDance has offered shares linked to a specific business unit – but it just goes to show how hot AI is at the moment! This is great but if I was them I’d be asking to see the money straight away (as per the workers at Samsung and SK Hynix above). Shares are great and all but I’d go for the cash right now! If Tencent came calling with a massive pay offer, you wouldn’t see me for dust (if I was in this industry – which I’m not!)! That being said, I guess that this share option might be less margin dilutive than putting aside a mountain of cash.

AI tools lead to ‘clear racial disparities’ in job hiring (Financial Times, Jamie John) is a really interesting article which says that, according to a Stanford-led study of 4m job applications across 156 employers who used the Pymetrics hiring platform, which tests people using a number of online games, found that there were “clear racial disparities” in outcomes, particularly disadvantaging Black and Asian applicants. The algorithms used by Pymetrics look for traits such as propensity for risk and speed of response in addition to other things like trust and care for others. Applicants who most closely match already-successful employees tend to go forward while others are rejected. * SO WHAT? * I was at a function recently where Bright Network and

Mishcon de Reya talked about their work on their AI-powered application platform. I asked the question “If you are aiming to employ a successful employee avatar and using characteristics of currently successful employees as a model, isn’t this just an expensive way of reinforcing bias?”. I would argue that there is possibly a reason why the archetypically successful straight-A, redbrick uni, 2:1/First candidate with a smattering of reasonably impressive outside interests gets through – it’s because they are arguably more similar to other people who already work there and are therefore more likely to “fit in”. At the end of the day, I don’t think companies want to disrupt teams for the sake of it. FWIW, I think that using AI tools for the initial sweep is probably a good idea because, contrary to popular opinion, the first stage of selection needs to weed out completely unsuitable candidates so that you have a manageable number to work with. After that, I think that job simulations are a decent enough way to see how people react in work-based scenarios – but nothing is absolute because humans tend to change over time! AI is NOT the whole answer but I think that it can be a useful tool. I’m sure it will continue to improve over time, though…

Manchester University to offer work placements to all undergraduates (The Guardian, Sally Weale) shows that the university is taking action to improve the employability of all of its students, regardless of degree, in order to better equip them for the job market. It wants to offer “meaningful real-world experience” to all of its students. * SO WHAT? * This is great – but you do wonder how realistic this is going to be given that there are currently 32,000 undergraduates enrolled at Manchester and employers are getting increasingly reticent about hiring. I’m liking the sentiment though. University is expensive and I think that now, more than at any time in the past, people are questioning whether it really does give you the advantage that it says it does. A successful initiative like this could well prove to be very attractive – but it’s going to be a tall order.

Then in Next boss warns over ‘dramatic fall’ in UK entry-level jobs (The Guardian, Julia Kollewe) we see that the long-time CEO of Next, Lord Wolfson, expressed concern about the current reality of youth employment. He said that the company now gets twice as many applicants for each role than it did only two years ago. * SO WHAT? * Employment costs have risen, the Employment Rights Act has imposed more onerous conditions on employers and the economy is having a nightmare. The government really needs to step in here and have some sort of co-ordinated plan but they are currently so hung up on choosing a new leader that millions of young people are going to suffer as a result.

In Spotify boss defends move to AI music, saying it is better than ‘slop’ (The Guardian, Aisha Down) we see that the streamer’s CEO, Alex Norström, has defended criticism about the company’s decision to move into AI-generated music, claiming that it gives users and creators a better alternative to piracy and unregulated AI content. It’s not entirely clear at the moment as to how the new feature will work. * SO WHAT? * I think that the risk here is that AI-generated music could crowd out human artists and potentially damage their earning potential because of the increased competition. Established artists will be just fine, though…

Xiaomi’s Profit Buckles as Memory Prices Soar (Wall Street Journal, Jiahui Huang) highlights a tough start to the year for Xiaomi thanks to rising memory prices, tight competition and falling

demand. Its net profit numbers came in below forecasts thanks to the particularly poor performance of its Internet-of-Things and lifestyle products divisions. Its EV business did a lot better, though – so it wasn’t all bad.

Then in UK law firm Pinsent Masons reprimanded by court over AI error (Financial Times, Suzi Ring) we see that London’s High Court admonished the law firm after its lawyers made false submissions to the judge based on AI in relation to a routine insolvency application. The submissions were made by a junior lawyer. Pinsent Masons apologised and referred itself to the SRA. * SO WHAT? * We’re at the early days of AI and this is just the latest example of the dangers of relying too much on the technology.

In a quick scoot around some of today’s other interesting stories, The AI consultants coming for the Big Four (Daily Telegraph, Louis Goss and Matthew Field) highlights a growing trend of specialist AI consultants – from the companies that make the models – bidding to offer management consultancy services and tech advice. The Big Four accountancies have been pivoting to provide AI services so this could get interesting. * SO WHAT? * The question is do you want a tech geek or the smooth-talkers to bill you?? Given how fast things are developing at the moment, I’d go for the tech geek every time. The management consultants will say that they have tons of experience advising corporates for decades on serious things but that would not fly with me. If the tech geeks nab too much of their business, maybe the consultancies will start a bit of poaching – or, even better, some kind of joint venture because then you’d get the “best” of both worlds. Alternatively, the tech firms could just hire top management consultants.

Ferrari’s £475k EV mocked as £32k Nissan lookalike (Daily Telegraph, Hans van Leeuwen and Nick Squires) follows on from yesterday’s story about the launch of Ferrari’s new EV. It has been roundly mocked and branded as a lookalike of Nissan’s Leaf! The Ferrari share price fell by over 6% after the official unveiling and there’s talk now about whether things will go the same way as JLR’s disastrous rebrand. * SO WHAT? * Sometimes, you hear about cars having a “halo” effect,

meaning that certain models attract interest not only for that particular car – but for all the others in the range. I think that the design is so bad in this case that I wonder whether it will have the opposite effect and that potential owners will go to other marques instead. Don’t get me wrong, if this was a Nissan or Honda or something, then it looks great. It just DOESN’T look like a Ferrari. Everyone’s stuck their neck out for this so if it all goes wrong, heads will surely roll.

Lilly Agrees to Buy Trio of Vaccine Developers (Wall Street Journal, Peter Loftus) shows that Eli Lilly has just agreed to buy Curevo, Limma Biologics and Vaccine Company for a combined $4bn, using the cash that it’s earned though its successful weight-loss drugs. It certainly seems like a good way to spread the joy of its weight-loss earnings!

Back home, B&Q blames sales dip on wet Easter but predicts heatwave gain (The Guardian, Julia Kollewe) shows that Kingfisher, which owns B&Q and Screwfix, saw a weaker performance over the quarter but is hopeful that it will benefit from rising sales due to the current heatwave. Kingfisher blamed poor performance on the rain and cold around Easter. * SO WHAT? * I’m not quite so optimistic here given the current economic backdrop. Surely consumers will be far less likely to splash out on discretionary items. We’ll just have to see!

This is a pretty impressive pool – but it’s not obvious as to what makes it “alien” until you watch to the end!

US strikes Iranian missile sites as peace talks continue (Financial Times, Jacob Judah and Claire Jones) shows that the US struck missile launch sites in addition to boats that it said were laying mines but then Iran’s top negotiators travel to Qatar amid intensified efforts to secure deal (Financial Times, Najmeh Bozorgmehr and Andrew England) shows that there seem to be diplomatic advances towards an extension of the current “ceasefire” and reopening of the Strait of Hormuz. Hopes for Iran peace deal push oil prices down more than 5% (The Times, Chris Dorrell) highlights the latest market knee-jerk reaction but The energy shock is not over yet (Financial Times, the editorial board) suggests that, even if a deal is done, oil disruption will continue for some time yet. S&P Global reckons that some oilfields could take seven months to restart, some of the oil will have to go towards replenishing reserves that have been depleted and some LNG facilities have been damaged and need to undergo repairs. Then you’ve got the roughly 2,000 ships that are currently stuck in the Gulf and need to reposition and offload. The

CEO of ADNOC believes that it’ll take at least four months to recover to 80% of pre-war levels and until the first half of 2027 to fully recover. Until then, energy use is going to have to be conserved.

Back home, Rachel Reeves tells ministers to ‘buy British’ in four key industries (The Guardian, Kiran Stacey) shows that the chancellor has told colleagues to give government contracts in shipbuilding, steel-making, energy and AI to British companies wherever possible. The Treasury and Cabinet Office will now oversee contracts in these areas and potentially override ministerial decisions. * SO WHAT? * This sounds like a lot of hot air to me and potentially academic as you never know – if Starmer loses the leadership, there could be a general election on the horizon! Whatever Reeves says now just isn’t going to matter…

Long-term unemployment hits decade high (Daily Telegraph, Emma Taggart) cites the latest data from the ONS which shows that the number of people in long-term unemployment has hit its highest level since January 2016. Economists are particularly concerned that the longer someone is out of work, the harder it is for them to get back in. As an ex-headhunter I can definitely confirm that! Also, the longer someone is out of work, the more likely it is that the person will go in at a lower level compensation-wise because employers are more likely to low-ball them because they know that they are desperate. Of course, this depends on the area and how hot it is at any given time but I’d say this is true as a general rule. Again, another generalisation but I would suggest that employers don’t always pay you what you are worth – they pay you what they think they can get away with. That being said, perhaps any stigma attached to being unemployed at the moment is lessened because of the severity of the current situation more widely. This is why I always say to people, don’t take a month off and go on holiday because that’s going to cost you time and money. The clock starts ticking as soon as you’ve left your old job so I would say you are far better off securing a new role and then going on holiday. You are far more likely to enjoy the holiday, safe in the knowledge that you’ve got something to go back to! I have seen so many people do the holiday thing and then be out of work for months or even years.

Workers cling to jobs as fear puts brakes on resignations (Daily Telegraph, Eir Nolsøe) cites figures from Deutsche Bank which show that resignation rates have fallen to their lowest level since the depths of Covid. Falling job vacancy numbers are making employees more reluctant to leave and that has partly been due to the government increasing the cost of hiring someone.

UK universities cut jobs, research and teaching amid squeeze in overseas students (Financial Times, Chris Smyth) cites findings in the annual survey by Universities UK which shows that 38%

of respondents to its survey are carrying out compulsory redundancies, a steep rise from the 11% in 2024. 79% of respondents said that they were making voluntary redundancies! Only this month, Nottingham University announced that it was going to make 600 job cuts (roughly equivalent to 8% of its total staff), Sheffield University is looking to cut about 20% of its chemistry department and staff at London South Bank University voted to strike over planned job cuts. * SO WHAT? * Rising NICs and a major drop in international student numbers means that universities are having to make cuts not seen since the early 90s. Two-thirds of universities said that they were thinking about alliances or mergers and 31% were considering a cut in academic research, more than double the rate of 14% in 2024. 44% of respondents said that they were cutting courses versus 24% in 2024, with modern languages, English literature, history and chemistry being particularly badly hit. FWIW, it feels to me like there have been too many courses at too many universities for too long – which has resulted in an over-reliance on fees from overseas students. I suspect that the number of overseas students has helped to paper over the cracks for quite some time and that we’re only getting the real picture now that they are avoiding the UK. It is no wonder that cuts are being made and that institutions are merging (like King’s College London and Cranfield last week and Greenwich and Kent universities earlier this year, for example). I really do think we’ll see a lot more of this as institutions bid to survive.

Hauliers, hotels and farms ‘in survival mode’ as fuel costs rise (The Times, Shayma Bakht, Sian Bradley, James Hurley and Andrew Ellson) shows that hospitality, farming and transport businesses are now in “total survival mode”, thanks to rising energy prices hitting their heating, fertiliser and fuel costs. The more time goes on, the more likely it is that more businesses get caught up in new energy deals with much higher prices – all at a time when borrowing costs look like they’re going to be on the way up…

SpaceX, OpenAI and Anthropic IPOs set to test limits of AI boom (Financial Times, George Hammond and Ryan McMorrow) just highlights the veritable tsunami of mega-flotations that are going to happen this year. The trillion-dollar flotations are going to potentially provide shock-treatment to the US IPO market and test whether investors have got the appetite to get involved. * SO WHAT? * It’ll be interesting to see how these flotations will affect the wider markets as investors are surely going to have to sell other assets to buy into the IPOs. Also, flotations of these behemoths is going to make market direction even more skewed towards tech than it is already.

In SpaceX launches redesigned Starship in successful pre-IPO test (Financial Times, Rafe Rosner-Uddin) we see that SpaceX managed to launch its redesigned Starship and see it return to Earth intact just a day after it abandoned the launch because of a faulty hydraulic pin. This is a great move for SpaceX and will be a real boon ahead of the company’s imminent stock market flotation.

AI guardrails stripped from Meta and Google models in minutes (Financial Times, Jamie John and Chris Cook) shows that it’s pretty easy to remove safety protections from AI models developed by Meta, Google and other tech companies according to tests carried out by the FT and AI safety group Alice. The FT used Heretic, a software tool on GitHub, to remove Meta’s Llama 3.3 model in less than 10 minutes without any specialist hardware. * SO WHAT? * The repercussions are very serious as the FT’s foray meant that the models showed them just how to disperse chlorine gas in a crowded indoor space, generated code on how to steal credit card information and showed how many micrograms of ricin per kg of body mass was required to achieve a 50% chance of death. It turns out that modified versions of the most advanced

proprietary models are readily available online and accessible to anyone with a bit of tech expertise…

On the subject of safety, Meta urges Labour to burden Apple with age checks (Daily Telegraph, Matthew Field) shows that Meta is trying to shirk its safeguarding responsibilities and lump the responsibility for age checks onto iPhone and Android systems at the smartphone operating system level as the UK heads towards a social media ban for the under-16s. Tech giants have argued that the ban in Australia has just pushed kids onto unregulated services with fewer checks. * SO WHAT? * TBF, this is probably the right way to go but it just seems to me that the tech companies are trying to get away with doing as little as possible for as long as possible to ensure the safeguarding of their users.

Then in How AI is forcing McKinsey and its peers to rethink pricing (Financial Times, Lex) we see that the rising use of AI means that clients are increasingly keen to see this expressed in the form of lower bills if legions of juniors aren’t being used in the process. There is a push to charge for results delivered rather than work done. * SO WHAT? * Lawyers and auditors have also traditionally used the billable hour to charge clients but it looks like this model is potentially on the way out. It is likely that McKinsey and its rivals will try to hang on to the billable hour for as long as it can but the problem is that paying for results doesn’t take into account forces beyond the consultant’s control that could scupper huge amounts of work. That being said, recruitment consultants get paid zero if their candidates don’t get the job (unless the client pays a retainer). It is likely that the billable hour, subscriptions and flat fees will continue to exist but it’s likely that outcome-based pricing will take up a growing slice of the pie.

In a quick scoot around some of today’s other interesting stories, A Hot IPO Lifts Geothermal Power Companies (Wall Street Journal, Jinjoo Lee) takes a look at the geothermal start-up Fervo Energy, which floated earlier this month and uses hydraulic-fracturing techniques to utilise underground heat. Its IPO was a great success, booming by 42% from its debut and although it’s much smaller than nuclear energy rivals like OpenAI-backed Oklo and Amazon.com-backed X-Energy it is on track to deliver power much earlier. Its first commercial unit is due to start power generation by October 1st while its next two units are due to deliver power by January 1st. In contrast to this, most nuclear start-ups aren’t going to come online until 2030 at the earliest. This will certainly be something that the privately held UK company Geothermal Engineering will be watching with interest given that its project started in Cornwall earlier this year. * SO WHAT? * It is fascinating to hear that Fervo says that once there is a go-ahead, a geothermal project takes about three years to build – but it is working to get this down to just 18 months. Although you can’t put geothermal projects anywhere (the geology has to be right) and the electricity they generate works out more expensive than some nuclear alternatives, the output is more predictable than wind or solar. It certainly sounds like this is a great addition to the overall energy mix – as long as it doesn’t caused too many earthquakes.

In Ferrari launches first EV with Jony Ive’s ‘polarising’ design (Financial Times, Kana Inagaki) we see that the prancing horse has launched an actual EV designed by the famous Jonny Ive.

FWIW, I think that the new “Luce” looks nice enough but it just doesn’t look sexy enough to be a Ferrari. He came out with all the usual ⚽🔒🔒 that designers come out with regarding what it looks like and what the thinking was behind it. Anyone wanting to spend €550,000  buying a vehicle that looks like a Honda (no offence) will be able to do so when it launches. I predict no more cars from Ive (for Ferrari anyway) and this car to absolutely tank. But that’s just my opinion 🤣.

Uber weighs higher bid for Delivery Hero after €11.5bn offer rebuffed (Financial Times, Rafe Rosner-Uddin, Kieran Smith and Florian Müller) shows that the company’s board met on the weekend to potentially increase its offer for Delivery Hero after its existing offer was rejected by a major shareholder. Rival DoorDash has also been interested in the company but not actually done anything concrete yet. Shareholders are clearly holding out for a higher price…

Then in Bank lending to UK businesses falls to lowest level in nearly 30 years (Financial Times, Laith Al-Khalaf) we see that research from Boston Consulting Group shows that weak economic growth and tighter regulation on lenders has meant that credit, particularly for small firms, has dried up. British bank lending to non-financial companies dropped to 59% of UK GDP in Q3 of 2025, a level not seen since 1998. This contrasts with the peak of about 90% of GDP in 2008. This is not good for growth, but with prices rising everywhere, this is understandable. SMEs have been particularly badly affected.

I think I’ve featured this guy before (he does an epic World Cup song in his living room) – and I think his new football song is also ridiculously catchy! BTW, I’m not really a football fan – much more a rugby fan – but I can appreciate this guy’s musical genius 😁

Russians are waking up to the economic catastrophe of Putin’s war (Daily Telegraph, Melissa Lawford) shows that things are apparently getting tense in Russia as the effects of the Ukraine war are increasingly hitting home. Since May last year, Russia’s FSB has been conducting widespread internet shutdowns across the country, initially justified by trying to frustrate Ukrainian drone attacks. Fun fact: there were more internet shutdowns per month in Russia over 2025 than there were in the entire world combined in 2024! Then recently, in March, mobile internet was shut off in Moscow for 19 days with no explanation! The thing is that this has had repercussions on ordinary Russians in their day-to-day lives because the internet blackouts left them unable to do things like make card payments, use online maps, get taxis via their mobiles or use messaging apps. Criticism on social media is on the rise while Putin’s approval ratings are falling. * SO WHAT? * It seems like the pendulum is swinging back towards Ukraine as it took land back from the Russians for the first time in almost three years last month – and that momentum has continued into this month as well. Russia is currently losing more men on the battlefield than it can recruit, which raises the spectre of forced conscription. Yes, oil prices are rising and sanctions on its oil have been suspended by both the US and UK in recent days but successful Ukrainian strikes on energy infrastructure have meant that the Russians haven’t been able to take full advantage. The latest official data shows that Russia’s GDP contracted for the first time since 2023 in Q1. Time for proper negotiations??

Then in Turkey court removes leader of opposition as Erdoğan tightens grip (Financial Times, John Paul Rathbone) we see that Turkey’s president is up to his old tricks again as a court in Ankara ruled to dismiss the leader of Turkey’s biggest opposition party, the Republican People’s Party (CHP), which will effectively kneecap Erdoğan’s main opponent. Investors didn’t like this hobbling of opponents and sent Turkish shares down by 6%. Erdoğan is clearly keen to maintain his firm grip on the country as the Iran war is really taking its toll, particularly as the country imports almost 75% of its energy needs.

Further to the recently emerging trend of Gulf states reprioritising their spending and investments in light of the Iran war, LIV Golf offers players equity as it fights for survival (Financial Times, Samuel Agini and Sujeet Indap) shows that the golfing league is fighting for survival following Saudi Arabia’s PIF announcement last month that it would pull financial support at the end of the current season. The PIF has poured around $5bn into the lossmaking league since its controversial start in 2021. * SO WHAT? * Right now, there is a plan to get investors to buy in that will also involve the league’s roster of golfers providing support in exchange for a majority stake. If this plan falls apart, a formal bankruptcy process could be initiated. This thing sounds like a money pit to me. If some crypto firm comes in as main sponsor – or if a star footballer like Ronaldo or something – announces their involvement, I would definitely run for the hills on this one! That being said, if I was LIV, I’d be asking Ronaldo and chums for money 🤣!

Saudi Arabia stops new work for consultants as war rattles finances (Financial Times, Andrew England, Arash Massoudi, Ellesheva Kissin and Nicolas Parasie) sounds like another example of Saudi Arabia’s re-prioritisation as Riyadh has stopped issuing new contracts for western consultancies in the kingdom and delayed some payments. Consultancies including the likes of McKinsey, BCG and the Big Four accountancy firms are likely to suffer as a result as they have all built up major operations in the Middle East. There’s been no formal announcement about this retrenchment in spending but it is certainly something that is happening. * SO WHAT? * Saudi Arabia has been a massive money-spinner for international consultants since Prince Mohammed announced a raft of mega-projects as part of the Vision 2030 roadmap to wean the kingdom off

reliance on oil revenues. It seems to me that there have been rumblings about expensive foreign consultants for a while and that the war has just brought this much more into focus. Also, the war has given the regime the perfect excuse to ditch bloated areas of the projects. It’ll be interesting to see whether consultants downsize their footprint or whether they just employ more locals.

Back home, UK recession risk rises as oil prices fuel inflation, Bank says (The Times, Mehreen Khan) cites a Bank of England policymaker as saying that the longer oil prices stay elevated the higher the risk of recession. This would force the Bank’s hand and make them reverse the direction of travel and raise interest rates. Not exactly a ground-breaking conclusion but it just highlights the mood music at the moment…

Against that backdrop, Reeves cuts VAT on summer days out to 5% as part of cost of living support (The Guardian, Heather Stewart) highlights the announcement yesterday of a load of measures designed to get our tricky finances back on track, badged as “Great British summer savings”. The chancellor trumpeted a cut in VAT from 20% to 5% during the summer on tickets for attractions and kids’ meals as well as free bus rides for under-16s over August. She’s also going to suspend import tariffs on some foods, including chocolate and biscuits (!) and raise the tax-free mileage rate for drivers. Reeves isn’t all about fun, though, because Labour prepares £1bn stealth tax on family holidays (Daily Telegraph, Christopher Jasper, Szu Ping Chan and Jonathan Leake) highlights plans by the HMRC to impose VAT of 20% in addition to fees that airports charge airlines to use their runways and terminals. That will basically put about £5 onto the existing standard charge of about £24. Also, Reeves launches fresh tax raid on oil and gas giants (Daily Telegraph, Szu Ping Chan and Jonathan Leake) highlights the inevitability of the government deciding to launch yet another tax raid on energy giants like BP and Shell by scrapping a tax loophole that allowed oil and gas companies to offset profits made in Britain against losses made by foreign subsidiaries.

Meanwhile, Starmer’s crisis lands on UK housebuilders’ doorstep (Financial Times, Lex) highlights the dire performance of UK housebuilders since Labour came to power. They had been pretty keen about the government’s prospects initially but two years into the government’s term, ambitious construction targets have not been met and the combined value of the six biggest UK companies in this space has halved – although Vistry has been hit particularly badly with its share price tanking by a whopping 80%! Crest Nicholson announced on Tuesday that it would delay its financial results in order to renegotiate some of its debt terms – such a delay is never a good sign. * SO WHAT? * For now, Barratt Redrow, Berkeley, Persimmon, Bellway and Taylor Wimpey should be OK because they have more cash than debt. If sales drop, profits will take a bath but they should still be able to pull through. Crest Nicholson and Vistry have specific financing issues that need addressing. As a result of all this, though, I would expect a slowdown although what we actually need is to speed up!

Then in Donald Trump abruptly postpones AI order after White House infighting (Financial Times, Joe Miller) we see that the president has decided to delay the signing of an executive order on AI because he “did not like” aspects of the plan for the government to vet models for national security and cyber risks. He said that “We’re leading China, we’re leading everybody, and I don’t want anything that’s going to get in the way of that lead”. * SO WHAT? * This clashes with public concern about the safety of AI but then again, Trump has form on ignoring public opinion – with the Iran war being the main example of the contrast between his will and that of his people.

In biz trends, UK business activity fell for first time in more than a year in May (Financial Times, Valentina Romei) cites the latest S&P flash UK PMI survey which highlights a weakening in momentum as domestic political uncertainty and the ongoing Iran war continue to take their toll. This is worse than the market was expecting and signifies a net contraction in activity.

Then in Investec targets UK wealthy with private banking push (Financial Times, Stefania Palma) we see that Investec is planning to make moves in private banking in order to milk the rich. It said yesterday that it was transitioning from being a “specialist lender” to a full service bank for high net worths in the UK. * SO WHAT? * It seems like everyone’s wanting to jump on this bandwagon at the moment – NatWest is in the midst of buying Evelyn Partners (one of the UK’s biggest wealth managers) for £2.5bn and we heard recently that Revolut is also looking to build in this area. I guess this makes sense given that wealthier customers have more flexibility with their money, particularly in the teeth of a cost-of-living crisis.

Walmart Sees Signs at Gas Pump That Consumers Are Stressed (Wall Street Journal, Sarah Nassauer) shows that American consumers are feeling the pinch at the moment and are, as a consequence, limiting the amount of fuel they buy. Walmart is currently keeping prices low in order to get the custom but it said that it could increase prices later on if fuel costs go higher.

Then in UK consumer confidence rises despite political turmoil (Financial Times, Valentina Romei) we see that British consumers are proving to be slightly less gloomy than they were last month, according to the latest GfK consumer confidence index! The index measures confidence about household finances and the broader economy. * SO WHAT? * This is a closely watched survey because household spending accounts for about two-thirds of GDP. Unsurprisingly, the survey also showed that households are diverting savings to pay for their day-to-day needs. Clearly this can’t go on forever…

It’s all go on the IPO front as ‘Fast entry’ SpaceX, OpenAI and Anthropic IPOs to ignite Wall Street trading frenzy (Financial Times, George Steer, Harriet Clarfelt and Emily Herbert) shows that the new “fast entry” rules implemented by NASDAQ this month will mean that the stocks of the forthcoming mega-IPOs will go straight into Wall Street indexes. This will, in turn, mean that there will be an upswing in investor money flowing in because index tracker funds will be compelled to buy them. The relatively small number of shares that will available initially may mean that the impact is more muted that it would have been otherwise. Regarding this particular instance, though, SpaceX Postpones Launch of Newly Redesigned Starship (Wall Street Journal, Micah Maidenberg) heralds some bad news as the company had to delay the launch of its latest Starship rocket due to technical problems. This is bad because this is the rocket that’s

going to be used to deploy bigger satellites and play a key role in mining asteroids and getting to Mars. Starship is the biggest and most powerful rocket ever built. * SO WHAT? * The timing of this isn’t great given the company’s flotation plans but then again maybe it would have been worse for the IPO if the V3 rocket crashed. This way, SpaceX can cash in on all the hype and still raise tons of money. 

Then in Estée Lauder and Puig end merger talks to create beauty powerhouse (Financial Times, Oliver Barnes and Barney Jopson) we see that talks between the two have ended and investors responded by powering Estée Lauder’s shares up by 11.5%. Apparently the two sides could not agree on what the balance of power would look like for the new entity.

In a quick scoot around some of today’s other interesting stories, Spotify targets high-spending superfans with AI-generated music (Financial Times, Anna Nicolaou) heralds a licencing deal between the streaming giant and Universal Music Group which will allow fans to listen to AI-generated covers and remixes of songs from participating artists. This tool would be a paid add-on and will enable artists to earn even more money in royalties. Some creators aren’t keen about this development. Spotify also announced new functions including “Reserved”, which gives top listeners early access to tickets, as well as new tools that allow artists and podcasters to sell subscription directly to fans via the platform. There will also be new audiobook add-on tiers and “Personal Podcasts” that help users generate customised audio content by putting prompts into Spotify. Sounds exciting!

Stellantis to launch 60 new models under €60bn plan to revive carmaker (Financial Times, Christian Davies and Kana Inagaki) heralds a new five-year plan announced by the car maker yesterday which involved the launch of 60 new models this decade and the investment of €60bn in products and tech. It’ll be interesting to see how all this turns out!

Elsewhere, Deckers Fourth-Quarter Sales Climb on Continued Hoka Demand, Helping Offset Uncertain Outlook (Wall Street Journal, Connor Hart) shows that Deckers Outdoor benefited

from the ongoing strength of the Hoka brand (which must be gutting to see for struggling rivals like Nike) and Swiss giant battery developer taps UK tech to feed AI power boom (Financial Times, Ryohtaroh Satoh) shows that Swiss group FlexBase, which is developing a giant underground battery system on the German border, is using UK battery maker Invinity Energy Systems’ vanadium flow batteries to provide 1.5 gigawatt-hours of storage – equivalent to the amount of electricity needed to power around 200,000 UK homes for one day. * SO WHAT? * Vanadium flow batteries are different to lithium-ion batteries as they store energy in liquid electrolytes in external tanks rather than in the batteries themselves. They can charge and discharge many times per day without any significant degradation over periods of time of up to 10 hours versus lithium ion batteries that can only cope with one-to-two hours. The downside is that vanadium flow batteries are at an earlier stage of development and cost more. Plus they are bulkier.

Then in London mayor Sadiq Khan blocks the Met’s £50mn Palantir deal (Financial Times, Laura Hughes and Robert Wright) we see that Khan has stopped the Palantir public contract with the Met due to concerns over value for money. Was this a real thing or just a convenient excuse I wonder? Palantir remains a polarising company given its involvement in ICE operations in America and the Israeli military.

Everyone loves hearing about the stars, how they live their lives and what they generally get up to. What about the people around them though?? In the world of music, we all know about the lead singers – but what about the rest of their group? What about the session musicians? Well here’s what it’s like to be Britney Spears’ keyboard player…

Oil drops nearly 6% as two China-bound supertankers cross Strait of Hormuz (Financial Times, Malcolm Moore, Andrew England and Bita Ghaffari) highlights a welcome move for the oil price as the safe passage of the tankers raised hopes of a partial opening of the Strait of Hormuz but Narendra Modi starts to let Indians feel the economic pain of Iran war (Financial Times, Michael Stott and Chris Kay) shows that the blockade has now gone on long enough to force Indian PM Modi to have to give up on protecting consumers from high oil prices. The Indian government has spent a lot of money to take the edge off the impact of the Iran war on its citizens by subsidising fuel and fertiliser prices but Modi says that this is no longer sustainable. State-owned fuel retailers increased petrol and diesel prices twice in less than a week as a result.

Back home, UK inflation slows to 2.8% as energy price cap softens impact of rising fuel costs (The Guardian, Tom Knowles) cites the latest ONS data which reflects a slowdown in inflation thanks to the reduction in the household energy price cap – although this would also suggest that the full effects of the Iran war aren’t yet filtering through (although I’d argue that some very much are – particularly in fuel and food prices!). Economists had expected a reading of 3% – so 2.8% was a surprise and is the lowest rate since March 2025. Further to the chancellor’s bright idea about getting supermarkets to put price caps on specific goods, Bank of England warns Reeves against supermarket price caps (Daily Telegraph, Szu Ping Chan, Tim Wallace and Daniel Martin) shows that even Andrew Bailey didn’t think it was a good idea while Call for food price caps ‘completely preposterous’, says M&S boss (The Guardian, Sarah Butler) shows that M&S’s CEO definitely didn’t think it was a good idea – so Rachel Reeves drops push for food price cap after retail backlash (Financial Times, Ashley Armstrong, George Parker and Sam Fleming) shows that she had to back down after strong reaction from retailers. On the flip side, Reeves to promise free summer bus rides for children and food tariff cuts in living costs package (The Guardian, Heather Stewart, Peter Walker and Sarah Butler) portrays a

chancellor trying to dish out what she can with a few measures cobbled together as part of the “Great British summer savings scheme”. One of the measures is free bus travel for the under-15s over August but a package of other measures will be unveiled today. Keir Starmer postpones fuel duty increase (Financial Times, George Parker and Rachel Millard) shows the PM getting involved in all this benevolence as he postponed the scheduled 5p increase in fuel duty until the end of the year. Fuel duty had been due to rise once more in September. Measures to tackle the cost of living will be announced today by the chancellor. Meanwhile, UK eases sanctions on Russian oil refined into jet fuel and diesel (Financial Times, George Parker, Malcolm Moore, Jim Pickard and David Sheppard) shows that we have had to relent on Russian oil sanctions in order to avoid supply problems caused by the Iran war. This has caused uproar among the Conservatives in particular, but TBH it’s easy to say that in opposition and if they were faced by the same issues now I would be willing to say with absolute certainty that they’d do the same. The decision is particularly embarrassing for the government, though, given that Labour MPs just voted against UK oil and gas licences.

Then in UK confirms Gulf trade deal in boost for service industries (Financial Times, Andrew England, Peter Foster and Simeon Kerr) we see that the British government signed the much-anticipated free trade agreement with oil-rich Gulf states yesterday via the Gulf Cooperation Council (GCC). It is thought that the deal could boost the UK economy by up to £3.75bn a year “in the long run” (this equates to about 0.1% of UK GDP). The deal has taken two years to get to this point! * SO WHAT? * This is good news for services, which account for around 80% of the UK’s GDP and over 50% of our exports to the GCC, because they will get guaranteed market access under the terms of this deal. The head of trade policy at the BCC said that this deal would create new opportunities for inward investment, exports and supply chains.

Nvidia lifts dividend as investors fret about growth prospects (Financial Times, Michael Acton) shows that the chip company was met with an underwhelming response to its stellar results. The company also announced an additional $80bn in share buybacks and Nvidia’s Jensen Huang bankrolls AI boom with $90bn deal spree (Financial Times, Ryan McMorrow and Michael Acton) shows that the company hiked its quarterly dividend from $0.01 to $0.25 per share for good measure. It has also spent an impressive $90bn over the last year or so on investments in over 145 companies! * SO WHAT? * Some said that the muted response was due to investors seeing Nvidia becoming a more “mature” stock rather than a growth one while others blamed increasing scepticism about the sustainability of the break-neck growth rate of AI. There’s also the issue of China and whether Nvidia is allowed to sell them chips or not.

Anthropic on track for first profitable quarter (Financial Times, George Hammond) shows that the AI company is on the verge of achieving its first profitable quarter before rivals OpenAI and xAI thanks to a period of rising revenues. It reckons that its revenue for Q2 of 2026 will be $10.9bn, which is more than double the $4.8bn it posted in Q1. * SO WHAT? * This is great but the company is unlikely to remain consistently profitable because it will have to keep spending big money on computing power to keep up with demand. There are rumours that Anthropic, like rivals SpaceX and OpenAI has flotation plans.

Talking of which, Elon Musk’s SpaceX files for record initial public offering (The Times, Louisa Clarence-Smith) highlights the latest development for SpaceX as it filed with the SEC for a floation on the NASDAQ next month. It looks like it’ll be the first trillion dollar US market debut and world’s biggest ever flotation! What’s in SpaceX’s IPO prospectus? (Financial Times, Ryan McMorrow, George Hammond, George Steer and Stephen Morris) shows that the 200,000 word prospectus outlines ambitious visions of asteroid mining and “passenger transport to the Moon and Mars” and outlined a roadmap on how this will be achieved. Right now, it is monetising

surplus computing capacity – it recently announced that it would lease data centre space to Anthropic – but then it wants to launch a massive constellation of orbital solar powered data centres that will stay cool due to the vacuum of space. The future is being developed ar0und AI. The Secrets Revealed in SpaceX’s IPO Filing (Wall Street Journal, Becky Peterson and Theo Francis) adds that the company is hugely lossmaking and that Musk controls 85% of the voting power, which makes him unsackable. * SO WHAT? * The flotation is going to be momentous and I would have thought it will go well given Musk’s star power. In a world of uncertain things, one certainty is that investors will continue to throw money at anything that Musk touches!

OpenAI ‘readying $1trn flotation’ after end of court case (The Times, Louisa Clarence-Smith) takes the IPO conversation further forward as it looks like the company is also on the verge of a flotation that could value it at around $1tn. It was last valued at $852bn so maybe the conclusion of its court case will help to push the value up further. A draft prospectus could be filed with regulators as early as this week! It’s all kicking off isn’t it!

Meta plans 8,000 job cuts worldwide to fund AI investment (The Times, Chris Dorrell) shows that Meta Platforms is going to cut staff numbers even further – by 10% – as it doubles down on its AI efforts but Zuckerberg promises no more ‘company-wide’ lay-offs at Meta after slashing jobs (Financial Times, Hannah Murphy) suggests that this will be it for the time being (although it’s still possible that team-specific layoffs could be a possibility).

Intuit to Cut 17% of Staff, Invest in ‘Big Bets’ (Wall Street Journal, Dean Seal and Kristin Broughton) highlights yet another example of a company making headcount reductions to become more AI-focused – but this is even more dramatic as the company is laying off a whopping 17% of its workforce with a view to using the “savings” for making big AI bets. Tough times.

In a quick scoot around some of today’s other interesting stories, Urban Outfitters Sales Climb, Helped by Strength of Free People (Wall Street Journal, Kelly Cloonan) shows that the apparel retailer posted higher sales in the latest quarter powered by its Free People business but its other divisions including Anthropologie, its namesake Urban Outfitters brand and its subscription rental service Nuuly also contributed growth to what turned out to be a record Q1 in sales and earnings. * SO WHAT? * It was particularly interesting to hear the CEO saying that “Our customers are in excellent shape. They are financially secure and are more interested in fashion than price” because a lot of what we see in the press at the moment suggests that consumers the world over (even rich ones) are having a tough time.

Target Reports Strongest Sales Gain in Years but Sounds Note of Caution (Wall Street Journal, Sarah Nassauer) is another US retailer that reported a decent performance but it was cautiously positive about the outlook. New strategies to attract shoppers powered it to its strongest quarterly sales rise since early 2022 and it increased its full year assumptions. Despite that, the company said that the current quarter may suffer in comparison to the same quarter last year and that consumers could potentially have a wobble before the end of the year because of the macro environment.

Back on this side of the Pond, M&S has won over fashionistas but not yet investors (Financial Times, Lex) asserts that although M&S seems to be getting increasingly popular with shoppers, investors don’t seem to be sharing the same interest. Food is going the right way but although fashion is making progress it’s still not quite there yet, which is probably why it’s not as highly rated as rivals such as Next. Fun fact: the food business makes up most of M&S’s revenue and half of its operating profit!

Merger spirits could lift the UK’s languishing mid-caps (Financial Times, Lex) is an interesting article which observes that deals in the midcap FTSE250 index space are showing signs of life. Tate & Lyle were just bid for by US rival Ingredion for £2.7bn and hospital operator Spire Healthcare is currently mulling over a £1bn offer from its second biggest shareholder. The bids for both were chunky – about double what they normally are – and because companies in this segment aren’t on crazy valuations, it’s likely that activity will pick up…

It’s good to spice up your life sometimes, don’t you think?? This guy decided to improve something that’s already fun by inviting a Michael Jackson lookalike to go with him! Now why didn’t I think of that??

In superpower news, Vladimir Putin meets Xi Jinping for key China summit (Financial Times, Joe Leahy, Thomas Hale, Edward White and Max Seddon) heralds the start of the summit in Beijing that will no doubt yield business and energy deals while Donald Trump and sons granted ‘forever’ immunity from existing tax audits (Financial Times, Alex Rogers) shows that the Department of Justice has stated that US tax authorities will be banned from pursuing claims against Donald Trump, his eldest sons and the Trump organisation as part of an agreement for the president to drop his $10bn lawsuit against the Internal Revenue Service. Then in Donald Trump’s ‘worst’ Republican critic loses most expensive House primary ever (Financial Times, Alex Rogers) we see that the Republican candidate who was bankrolled by the president beat the incumbent Thomas Massie in Kentucky in an election yesterday. Massie has been a prominent critic of the president, clashing with him over the Iran war, the Epstein files and his “Big Beautiful” fiscal legislation. Another critic bites the dust…

In defence, US to cut troops in Europe to lowest level since before Ukraine invasion (Financial Times, Jacob Judah, Amy Mackinnon and Lauren Fedor) shows that the US has decided to reduce the number of brigades in Europe from four to three as a “result of the comprehensive, multi-layered process focused on US force posture in Europe”. * SO WHAT? * This follows the sudden cancellation of the deployment of 4,000 US troops to Poland last week. JD Vance said yesterday that the move was “encouraging Europe to take more ownership”. Apparently, the Pentagon is preparing a new plan for US troop deployment in Europe. 

In trade, EU lawmakers strike deal on US trade pact (Financial Times, Mari Novik and Andy Bounds) shows that a provisional deal has been struck to implement a trade pact that was actually signed a year ago. * SO WHAT? * This comes after Trump threatened extra tariffs on Brussels for dragging its feet. The trade deal originally involved the EU paying 15% tariffs on most exports to the US while the EU would cut its own tariffs on some American imports to zero. However, implementation from the European side was delayed when Trump threatened to invade Greenland and then when the US Supreme Court judged his tariff regime to be illegal.

Iran weaponised world trade and others are following suit (Daily Telegraph, Hans van Leeuwen) highlights another potential consequence of Iran’s blockade of the Strait of Hormuz – that other countries are being inspired to potentially do the same thing with other crucial stretches of water. Iran has been able to cause global chaos with a few drones and patrol boats and some countries are starting to talk openly about implementing the country’s tollbooth idea. Any narrow waterway is now potentially at risk – and that includes the Taiwan Strait, the Malacca Strait, the Danish Straits and Gibraltar! The Panama Canal has already seen a 70% rise in traffic versus a year earlier and the price of pre-booked transit slots at auction have shot up by up to tenfold in some cases! * SO WHAT? * If everyone starts to monetise their choke points, there could be various consequences – insurance, energy and freight costs are all likely to rise and this means that goods costs will also go up as a result. Our maritime system is entirely based on the freedom of navigation, so any impediments will ultimately be paid for by all of us.

Back home, Reform UK unveils candidate to challenge Andy Burnham in by-election (Financial Times, Anna Gross) shows that Reform has picked a candidate to take on wannabe-PM Andy Burnham in the Makerfield by-election – Robert Kenyon, a local councillor who works as a plumber. He will be hoping that his campaign doesn’t spring any leaks (badumtish). How will Andy Burnham pay for his plans for the UK? (Financial Times, George Parker, Jennifer Williams and Sam Fleming) just looks at how Burnham might finance the promises he has been making – and it looks like he’s got no alternative but to raise taxes that aren’t income tax, VAT or employee national insurance. The article echoes what I said yesterday  but adds in other possibilities as well, although at this stage it’s all conjecture.

In oil news, Reopen North Sea to boost Britain, Shell urges Labour (Daily Telegraph, Jonathan Leake) shows that the boss of Shell is pushing the government to encourage drilling in the North Sea, justifying it by saying that it would provide a much-needed boon to Britain’s faltering economy. This is going to be a tough ask given that Energy secretary Ed Miliband remains resolute on banning new oil and gas fields. Oil and gas shortages continue to get worse…

Consumers continue to face a lot of challenges! Petrol prices hit new Iran war high (Daily Telegraph, Chris Price) cites the latest numbers from RAC which show that pump prices have hit a new high. The average price now for a litre of unleaded is 158.52p, a price not seen since December 2022 after Russia’s invasion of Ukraine and the resulting oil shock. Diesel prices have also skyrocketed but not by as much as unleaded. Energy bills to surge by £200 a year from July (Daily Telegraph, Chris Price) cites forecasts by energy consultancy Cornwall Insight which suggest that household energy bills are going to spike thanks to the ongoing effects of the Iran war. The government may have to offer targeted support for households that are getting squeezed the most. In the meantime, UK Treasury pushes supermarkets to cap food prices (Financial Times, Ashley Armstrong) shows that the government is trying to “persuade” big supermarkets to introduce voluntary price caps on key groceries (like eggs, bread and milk) to help out in the cost of living crisis. The government said that, in return for doing this, it would lift some regulations – but this has been met with a furious reaction. In addition to this, the Treasury told supermarkets that they wanted guarantees that British farmers wouldn’t lose out if price caps were put in place. * SO WHAT? * Consumers are really taking a pasting at the moment and the government is keen to do what it can to help them. However, you can understand the frustration of supermarkets when they are being asked to cap prices AND not pass them on to producers. If they do agree price caps, I’d say this would be particularly bad for consumer goods companies like Unilever and P&G.

Meanwhile, those who still want a new car but like a bargain are increasingly going for Chinese makes that offer a lot of bang for your buck and Chinese car dealerships take over Britain as drivers back cheap EVs (Daily Telegraph, Louis Goss) cites data from Autotrader which shows that the number of Chinese car dealers has shot up from 95 in May 2024 to 440 today! Conversely, Western carmakers have seen their market share slide, particularly as consumers lean towards going electric against a backdrop of higher fuel prices. BYD currently has the biggest presence of any Chinese EV brand in Britain with 135 showrooms. Not bad for a company that first entered the UK market in 2023! Mind you Chery-owned Omoda has been even more impressive, notching up 132 dealerships after entering the market in 2024.

In jobs news, UK unemployment unexpectedly rises to 5% as firms squeezed by Iran war (The Guardian, Tom Knowles) cites disappointing numbers from the ONS which showed that unemployment rose while wage growth has slowed down significantly. Vacancies also fell to their lowest levels in five years! UK youth unemployment rate hits 11-year high (The Times, Mehreen Khan and Max Kendix) confirms what I said yesterday about youth unemployment – that the

situation is getting even worse. The latest stats show that 16.2% of workers aged 16 to 24 were unemployed in Q1. This is the highest level since January 2015! * SO WHAT? * Given the uncertain nature of the economy, the tightening squeeze coming from all sides on businesses and rising costs prompted by a war that’s still ongoing, most companies just aren’t going to be in a position to take anyone on – and that’s going to perpetuate economic stagnation. Throw AI into the mix and you have a nightmare scenario for first-time workers and grads. The retail and hospitality sectors have suffered particularly badly given that they often tend to be more exposed to younger and less well-paid staff.

In NHS plans to scale back recruitment drive and use AI to avoid ‘financial ruin’ (Financial Times, Chris Smyth) we see that the NHS is thinking about cutting recruitment and instead using AI to help doctors treat patients. The reforms were put together while Wes Streeting was health secretary prior to his resignation and his successor, James Murray, has been left to decide whether to press ahead with the proposals that are scheduled to be published within weeks. * SO WHAT? * The NHS leadership put together a 10-year staffing plan back in 2023 that projected staffing levels to grow from 1.4m to 2.3m by the mid-2030s but plans under the current government have taken a “fundamentally different approach” and called for the lowering of annual staff headcount additions that will be enabled by increased use of AI. We’ll just have to wait and see how this progresses given current political uncertainty.

In the world of accountancy, Big Four post more job ads for AI specialists than auditors (Financial Times, Clara Murray and Ellesheva Kissin) cites FT research which highlights an interesting balance of vacancies in the accountancy giants – that roles requiring AI skills made up almost 7% of job ads by Deloitte, EY, KPMG and PwC in English-speaking countries in 2025. This excludes trainee and intern roles – but the number has more than tripled since 2022 when ChatGPT caused a revolution! It just goes to show how important AI skills are becoming in the marketplace. And while we’re on the subject of accountants, Deloitte’s UK business announces bigger bonuses after beating targets (Financial Times, Ellesheva Kissin) shows that Deloitte’s staff are going to be “deloitted” (sorry, I don’t know what’s come over me today) by the prospect of getting bigger bonuses and salaries this year as the company beat its profit targets after a tricky period. The company managed to boost its revenues by improving productivity and leaning into opportunities to advise clients on how to adopt AI.

Chanel to open more stores in China as new designer stirs ‘Blazy mania’ (Financial Times, Adrienne Klasa) highlights some rare good news in the world of luxury as Chanel announced the opening of new stores in China as its new star designer Matthieu Blazy is causing a stir for all the right reasons! His products only started to land on the shelves in the second half of March but they’re going down a storm! Blazy arrived from Bottega Veneta last year. This is really impressive considering that luxury rivals continue to suffer…

Then in Dr Martens proves tough as old boots with profit turnaround (The Times, Isabella Fish and Guy Taylor) we see that there’s a turnaround going on at the ailing bootmaker as it

managed to beat market expectations in its annual numbers. Dr Martens has had a rough ride since its stock market flotation in 2021 and spent last year trying to put the business back on an even keel after a spate of profit warnings, poor US trading performance and tricky macroeconomic conditions. * SO WHAT? * It’s good to see some good news for a change on this company – and its strong performance in the US was particularly impressive. It’s also expecting a positive outlook, so this performance doesn’t look like a flash in the pan!

In a quick scoot around some of today’s other interesting stories, SpaceX IPO adds air to the Silicon Valley ‘genius bubble’ (Financial Times, Lex) takes a look at SpaceX’s proposed valuation of $1.75tn – about four times what it was just six months ago – and suggests that this can only be explained by investors giving the company a “genius” premium that seems to be assigned to Musk’s companies. His companies are way over-valued on traditional market metrics but tech-founder chiefs have been responsible for attracting these premiums for a while now. It is interesting to note that this genius premium is now evolving into something that is untouchable by conventional economic wisdom as companies attract astronomical valuations that seem to ignore the wider geopolitical situation.

In Google to release smart glasses and add AI ‘agents’ to search engine (Financial Times, Stephen Morris and Cristina Criddle) we see that the tech giant has announced new

autonomous AI agents and coding tools in addition to a new lineup of smart glasses. Google search will be powered by the latest Gemini 3.5 flash model. In order to make the glasses, it has been working with Samsung, Warby Parker and Gentle Monster to make glasses with a camera and speaker. Google also announced a new assistant called Spark, which can organise users’ personal lives. This all sounds very interesting but we’ll have to see what the offerings are like versus the competition!

Monzo boss pledges European expansion as profits jump (Financial Times, Laith Al-Khalaf) highlights the bank’s intention to expand into more European countries as it announced a strong performance yesterday thanks to higher lending and fee income. It managed to increase pre-tax profits by almost 50%! Clearly, the company wants to continue the momentum…

It’s amazing how much tension a humble potato can cause in a competitive situation. I think that we should all get behind this as a new Olympic sport – and it’s something that’s accessible to all 🤣!

US eases Russian oil sanctions in bid to contain Iran price surge (Financial Times, Myles McCormick) shows that Trump has extended a waiver on Russian oil sales in order to rein in fuel price rises, giving Putin a boon to his war machine finances. This is the second extension since March and has been framed as a move “to provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea”.

In Xi Jinping told Donald Trump that Putin might ‘regret’ invasion of Ukraine (Financial Times, Demetri Sevastopulo) we see that the Chinese president apparently indicated that he was leaning towards being slightly more Team Ukraine than Team Russia in last week’s meeting. This is mildly interesting because he’s tended not to say anything when pressed about what he thinks about the Ukraine war until now. China has been accused in the past of providing dual-use items to Russia that have helped its cause in Ukraine. Putin is arriving in China today for a summit. The cracks in the Putin edifice (Financial Times, the editorial board) suggests that things aren’t going particularly well for Putin on the domestic front or the war front, so the summit will be a welcome opportunity for him to distract attention away from his problems.

Sweeping the strait: the companies gearing up to clear the Gulf of mines (Financial Times, Charles Clover and Syvia Pfeifer) is an interesting story about defence companies and marine contractors who are now deploying unmanned mine-clearing systems in and around the Strait of Hormuz in order to aid the reopening of the shipping lane. Autonomous minehunting vessels built by British start-up Kraken Technology Group are being sent over as part of a broader effort to make the Strait safer. UK maritime surveillance specialist SRT Marine is in talks with a number of Gulf countries about using its maritime surveillance systems. The US Navy uses Textron Systems’ Common Uncrewed Surface Vehicle and Raytheon’s AQS-20 sonar minehunting system in addition to the Barracuda submersible while the British and French navies are starting to use Thales’s new unmanned Maritime Mine Counter Measures system. * SO WHAT? * Minehunting still a difficult business despite all the fancy tech and it’s probably going to take a while for confidence to return even if the Strait was opened tomorrow. Modern mines tend to be laid on the seabed and are activated when sensors detect ships passing overhead and the Strait’s relatively

shallow waters mean that they can shift in response to changing seabed conditions. In order for commercial traffic to resume, risks are going to have to fall to acceptable levels, and mine detecting technology will play a key role in this.

In the UK leadership circus, Burnham vows to reverse privatisation and austerity if he replaces Starmer (Financial Times, Jennifer Williams, George Parker, Sam Fleming, Ian Smith and Ashley Armstrong) shows that Andy Burnham is still finding his policy feet in the Labour leadership showdown and promised yesterday to reverse privatisation, austerity and deregulation. He also said that he would stick to the current fiscal rules and not go on a massive spending spree. A YouGov poll of Labour party members showed that he would beat Starmer in a head-to-head leadership contest by 59% to 37% and would easily beat Streeting by 80% to 10%. Keir Starmer vows to fight on ahead of Burnham by-election (Financial Times, George Parker and Jim Pickard) shows that the embattled leader maintains that he’s going to rebuff any attempt to oust him. Good luck with that. * SO WHAT? * If Burnham is to keep his promises, I would 100% put my money on massive tax hikes. If you want to keep to the fiscal rules but nationalise everything, hand out the freebies and tie the hands of corporates, I cannot see any other way. Businesses are already feeling the pinch, banks and oil companies have already paid “windfall taxes” (I’d argue that pushing this any further will kill investment stone dead – this has already happened in the North Sea to some extent) and some of the flighty and tax-conscious entrepreneurs have left. Who else is left to tax? The “middle”?? We’re all in a cost-of-living crisis where food and fuel prices have gone through the roof. I don’t think food prices will come down (no fertiliser, bad harvests) and oil prices will surely stay higher for longer. Will he tax housing? The property market is already cooling down and landlords are selling out, which means that rents are going up. Will he put a cap on rents? That will mean more landlords will sell out. My point is that if Burnham wins, he will face so many restrictions that he’s going to have to just plunge the country further into debt. And he can’t even blame it on another party! Surely the smart thing for him to do would be to sit back, watch the current government implode and then make a proper comeback for the election-after-next. Then he won’t be tainted by failure.

NextEra to Buy Dominion Energy in $67 Billion Deal (Wall Street Journal, Jennifer Hiller and Ben Dummett) highlights the announcement made yesterday by two of the biggest US utilities companies to combine in a mostly-shares deal. This will form the biggest electricity producer in the US. The deal is expected to close within the next 18 months and would need approval by state and federal regulators. NextEra bets there’s no such thing as having too much power (Financial Times, Lex) suggests that this deal is all about AI and how it is transforming an area that has been pretty mundane – utilities – into something altogether racier. This isn’t a done deal yet, though, and the tricky issue of how domestic electricity bills are going to be tamed in an era of growing AI demand will surely need to be included in all this.

Elsewhere, Anglo American strikes $3.9bn deal to sell Australia coal business (Financial Times, Leslie Hook and Maxine Kelly) shows that the mining giant has agreed to sell its coal mining business in Australia to the privately owned company Dhilmar after the previous buyer it had lined up pulled out of the deal in August last year. * SO WHAT? * This will be good news for Anglo American, which has wanted to sell it for a while as part of a wider streamlining of the business – and it’s probably good for the buyer as well given ongoing energy needs and the resurgence in demand for coal.

Uber leaves door open to Delivery Hero takeover by increasing stake (Financial Times, Kieran Smith, Rafe Rosner-Uddin and Florian Müller) highlights Uber’s announcement yesterday that it

is now Delivery Hero’s biggest shareholder having increased its stake to 19.5% of the company in addition to 5.6% in options. It said in a regulatory filing that it had no current plans to take full control of the company – but it didn’t completely shut the door! * SO WHAT? * I have always said that this is a business that needs scale, so it’s not surprising that we’re seeing consolidation now. The food delivery sector has seen DoorDash’s £2.9bn takeover of Deliveroo and Prosus’s €4.1bn acquisition of Just Eat Takeaway last year. Uber had previously held a 7-ish% stake in Delivery Hero. We’ll just have to sit back and see now when Uber decides to push the button because I don’t believe that they’re NOT going to make a takeover bid!

Google makes chip push with Blackstone-backed AI cloud group (Financial Times, Rafe Rosner-Uddin and Ryan McMorrow) shows that the two companies are teaming up to create an AI cloud group backed by $5bn of the latter’s cash in an effort to broaden the reach of Google’s chips and become a real force to be reckoned with against Nvidia. They are going to bring 500 megawatts of data centre capacity online next year and add more over time. Google will provide the venture with hardware including its Tensor Processing Units, its custom chip used to train and power AI models. Impressive!

In consumer news, Rising prices are Britons’ biggest money worry as inflation stays high, survey finds (The Guardian, Tom Knowles) cites the latest consumer confidence survey from S&P Global which reflects British consumers’ top concerns and that households have become “increasingly gloomy about their financial situation”. Reeves poised to cancel planned fuel duty rise to help with cost of living (The Guardian, Kiran Stacey) shows the chancellor making a token effort to ensure that things don’t get even worse for consumers following pressure to cancel the increase in fuel duty that was due to be phased in this week. * SO WHAT? * The repercussions of the Iran war just keep on coming. A year that started with cautious optimism has turned into a bid for survival (unless you’re an oil company or a bank!).

Youth unemployment is reaching the levels seen during Covid (The Times, Charlotte Bend) cites a study by the Institute for Fiscal Studies which shows that recent falls in youth employment mean that we’ve now reached levels last seen during Covid and in the wake of the 2008 financial crisis. * SO WHAT? * If the government takes a new direction with a new leader who’s going to HAVE to raise taxes even more on businesses, the situation is bound to get even worse.

Businesses are already reeling from the effects of higher NICs and minimum wage so I don’t think there’s any more slack left in the system. That means that there will be more closures and even higher unemployment.

Then in Standard Chartered to cut almost 8,000 jobs as AI use escalates (Financial Times, Arjun Neil Alim) we see that the Asia-focused bank is planning to cut its back office headcount by over 15% by 2030 as it prioritises AI. The CEO said that this was not about cost cutting – it was about replacing. * SO WHAT? * TBH, it’s surprising that we haven’t seen this before – but I feel that this trend will surely grow given that back office roles tend to be quite procedural in nature (don’t get me wrong – the humans in the loop can definitely avert disasters!). I would imagine that the experienced “heads” will survive to oversee things for some time yet, but roles for juniors will get much harder to come by. While I’m generally sceptical about a lot of the companies blaming AI for cuts (and not over-hiring in the last few years) I think that this is a genuine transition for this type of job. It’s been a long time coming…

In a quick scoot around some of today’s other interesting stories, Anthropic to brief global financial watchdog on cyber flaws exposed by Mythos (Financial Times, Martin Arnold) shows that the AI company is going to brief members of the Financial Stability Board on vulnerabilities in the global financial system’s cyber defences following a request by Bank of England governor Andrew Bailey. The FSB is a global body that comprises of finance ministry officials, central bankers and securities regulators from G20 countries. * SO WHAT? * I think that this is sorely needed given the kerfuffle created by the limited release of Anthropic’s Mythos model. I think that a co-ordinated approach is needed here but I don’t know for sure whether that’s going to happen!

Elon Musk loses legal fight against OpenAI (Daily Telegraph, James Titcomb and Tom Haynes) highlights the unanimous verdict of the jury announced yesterday that Sam Altman and Greg Brockman (the CEO and president of OpenAI respectively) were not liable for Musk’s claims that he was manipulated into investing in the start-up because he’d left it too late to bring the case. There is a three-year statute of limitations – and that had expired. * SO WHAT? * This now removes the cloud hanging over OpenAI and will pave the way for an expected $1tn flotation.

This case has dragged on for the last two years! Musk’s lawyers are considering an appeal.

Halifax could disappear from UK high streets as Lloyds assesses branding strategy (The Guardian, Kalyeena Makortoff) shows that the Halifax name could be in doubt because Lloyds Banking Group, which has owned Halifax since 2009, is reviewing its branding strategy. Lloyds Banking Group owns Halifax and Bank of Scotland and it is understood that Bank of Scotland will survive the streamlining because it’s the group’s only retail banking brand in Scotland. The final decision has not yet been made but a phase-out could start as early as July 1st. Lloyds is due to announce a new five-year strategic plan at the end of July, along with half-year results.

Then in Ryanair Shares Fall After Company Warns of Weaker Pricing, Late Bookings (Wall Street Journal, Adrià Calatayud) we see that the airline group warned that prices are weakening going into the crucial summer season thanks to higher fuel costs and consumers tending to book last minute. Bad visibility regarding the summer season means that the company was unable to provide guidance for the full year. This certainly seems to echo the recent trend of many airlines and travel companies.

I’ve featured the amazing drummer El Estepario Siberiano a few times on here in the past, but I haven’t shown you this party trick! How does he do that?!?

China’s industrial production growth slows (Financial Times, Joe Leahy, Wenjie Ding and Haohsiang Ko) cites the latest official figures which show that industrial production grew at a slower pace in April this year versus April last year and that retail sales went sideways thanks to lacklustre domestic demand. Domestic spending was largely driven by state-owned businesses while industrial growth was powered by manufacturing.

Gulf freight rates jump as shipping companies turn to trucks to move cargo (Financial Times, Alice Hancock, Madeleine Speed and Susannah Savage) highlights the ongoing impact of the Iran war on global trade as bottlenecks are now so severe that businesses are now absorbing much higher costs of getting cargoes to their destinations over land. Freight rates on the Shanghai to Gulf and Red Sea route reached record highs last week. Trucks can only take a fraction of the capacity that large container and cargo ships can take, though. The nightmare continues…

White House says Donald Trump and Xi Jinping agreed on ‘board of trade’ at summit (Financial Times, Demetri Sevastopulo and William Langley) heralds the fruits of last week’s summit between the presidents – that they agreed to establish a board of trade in order to promote “strategic stability” between the US and China. The two also agreed to establish a board of investment that would also help to “optimise the bilateral economic relationship”. Xi is going to go to Washington in the autumn. On other matters, it sounds like they agreed that “Iran cannot have a nuclear weapon” and called for Iran to open the Strait of Hormuz whilst also listing a number of commercial deals. * SO WHAT? * The White House bigged up the agreements that had been made although some observers were less effusive about what had actually been achieved because promises fell short of previous commitments and/or were vague. It sounds like nothing has really changed regarding Taiwan, though…

UK closes in on trade deal with Gulf states (Financial Times, Andrew England, Peter Foster and Anna Gross) shows that a much-anticipated free trade agreement is getting closer between the two sides as indications are that an agreement-in-principle could be reached within the next few days following two years of talks. Jasem al-Budaiwi, who is secretary-general of the Gulf Cooperation Council, is due to be in London this week. A trade deal would cover six Gulf states – Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Oman. * SO WHAT? * Both sides could do with a bit of good news. Starmer’s having his leadership questioned and the Gulf states have seen their economies bombarded. The deal’s been close for quite some time though, so it ain’t over till it’s over! That being said, it does sound like things really are getting to the closing stages, though, because Bahrain announced that the British-Gulf free trade agreement “completes its negotiations” on social media last week, but then swiftly took it down…

Back home, Labour leadership battle threatens to reopen Brexit wounds (Financial Times, Anna Gross and Chris Smyth) shows that the whole leadership debacle is gathering pace now with Streeting and Burnham jockeying for position in a challenge to Starmer’s leadership. Andy Burnham plays down rejoining EU after Wes Streeting advocates Brexit reversal (Financial Times, Anna Gross, Jim Pickard and Jennifer Williams) shows that these two challengers are

already sticking their necks out on policy but Burnham’s Manchester economic miracle in doubt (Daily Telegraph, James Titcomb) questions Burnham’s economic boasts that Manchester has become the fastest-growing part of the UK economy  as economists at The Data City Consultancy reckon that the figures he’s quoting as based on incorrect numbers that inflate productivity. Why big business fears ‘Raynernomics’ — and Andy Burnham (The Times, David Smith) basically says that bond markets don’t like the prospect of a Burnham-Rayner combo because they are more left wing and therefore more likely to tax and spend whereas Streeting is perceived to be more towards the Starmer end of the spectrum, which is more right wing. Meanwhile, Business investment growth in UK is less than half pace of US (Financial Times, Valentina Romei) cites the latest data showing that business investment in the UK has fallen way behind that pace of business investment in the US in Q1 this year versus Q4 of 2019. * SO WHAT? * The leadership thing is a right mess at the wrong time! Then again, if things were going great there wouldn’t be any leadership challenges in the first place. A combination of the government’s lack of oomph, a zombie leader and the sudden loss of mojo in the economy just when it looked like things were turning a corner doesn’t look like it’ll lead to sunshine and rainbows for a new leader. If there is a change at the top, I’d expect lots of finger-pointing, loads more debt when debt costs are going up and even more taxes. I’d argue that there’s just not enough time for a new regime to achieve anything before they next go to the polls.

Then in Tipping point looms for global energy crisis (Financial Times, Malcolm Moore, Sam Fleming and Jonathan Vincent) we see that almost 80 countries have now been forced to introduce emergency measures to protect their economies as we get deeper into the energy crisis and The looming energy crunch (Financial Times, the editorial board) points out that reserves are continuing to fall – JP Morgan analysts reckon that commercail oil inventories in OECD countries could fall to “operational stress levels” by early June – and that prices of jet fuel and diesel are likely to spike the most as inventories have now dropped below five-year lows. More robust steps may have to be taken to conserve energy if things carry on as they are. Meanwhile, The World Can’t Get Enough U.S. Energy, Keeping Prices High for Americans (Wall Street Journal, Benoît Morenne) highlights the extreme success of US exports of oil, gasoline, jet fuel and other products – and that, up till now the country has been able to meet domestic demand. However, American stocks are now falling at a rapid rate – and if it continues, export bans may have to come into force, although the administration says that things won’t get that far.

Elsewhere, Vox becomes kingmaker as Sánchez suffers defeat in Spanish regional election (Financial Times, Barney Jopson) highlights the success of the rightwing populist party Vox in Sunday’s regional election in Andalusia, Spain’s most populous region. This was the ruling Socialist party’s worst ever electoral defeat and although the conservative People’s Party (PP) actually won, it didn’t do so by a majority – and that puts Vox in the driving seat to decide who forms a coalition government. Vox’s popularity continues to rise in Spain while PM Pedro Sánchez’s popularity falls.

UK firms halt investments and hiring as Iran war pushes up costs, bosses warn (The Guardian, Sarah Butler) highlights more consequences of the Iran war according to the latest BDO survey of British employers which shows that businesses are just hunkering down and waiting for the storm to pass. Mid-sized businesses responding to the survey said that higher energy and fuel costs – along with supply chain pressures – are the biggest challenges they are facing right now. The uncertain political backdrop will no doubt perpetuate this state of affairs…

Then in JLR and General Motors eye £900m contract to build new range of military trucks (The Guardian, Alex Daniel) we see that the two carmakers are among those considering  a potential big military contract to build thousands of 4x4s for the armed forces to replace the aging fleet of Land Rover that have not been in production since 2016! The new vehicles will be used across the Army, the Royal Navy and the Royal Air Force and the first deliveries are expected in 2030. JLR is presumably in pole position for this but that won’t stop others from pitching. The £900m MoD contract covers an initial tranche of about 3,000 vehicles.

UK has the highest property taxes of any major economy (The Times, Mehreen Khan) cites findings by Ryan, a tax firm, which highlight a not-so-fun fact of our economy that property taxes make up 3.7% of our total economy – the highest proportion in any major economy. * SO WHAT? * This is  bad for the government because if investment is slowing down (as we’ve seen in the previous section) and real estate valuations lose momentum, that will mean tax receipts will fall as well. Property taxes include business rates, council tax and transaction taxes such as stamp duty. Right now, companies are appealing against business rates that they see as being incorrect – and the hospitality sector is expected to be a big part of that. One of the biggest problems with the appeals process is that it takes about 11 months to be heard on average – and if you also take into account higher tax rates, there’s an increased chance that businesses won’t be able to last long enough to survive until their appeal is heard.

Then in Amateur property investors are being squeezed out  (The Times, David Byers) we see that analysis of data from Connells Group, the UK’s biggest high street estate agency, found that the share of all properties bought by landlords between January and April hit 13.3% – the highest level since 2016. Of this, 22.9% were properties that had been sold by other landlords – an increase from 16% just one year ago. * SO WHAT? * It seems like the advent of the Renters’ Rights Act has accelerated some landlords’ exit while others have used the opportunity to snap up properties to add to their portfolios. At the moment, landlords are buying up properties in the north where yields are strong – but not so much in the south where yields are weak. This means that rents in the south are likely to rise because of the relative lack of rental properties.

In a quick scoot around some of today’s other interesting stories, Chinese AI groups pull ahead of US rivals in video generation race (Financial Times, Eleanor Olcott) pulls together conclusions from developers and usage leader boards which imply that Chinese AI groups are now pulling away from US rivals in video generation as companies including ByteDance and Kauaishou are training their own systems on massive libraries of short-form video. This puts them ahead of their US rivals in this part of the AI universe. Although the likes of OpenAI, Google and Anthropic still dominate LLMS in areas including coding, they are behind the Chinese on video quality and usability. Kling, Seedance 2.0 and HappyHorse 1.0 all scored well in an Arena ranking of the best video models. * SO WHAT? * All of this is likely to have a particularly big impact on advertising because innovations will enable brands to generate videos on a grand scale that has never been possible before.

In Publicis to buy US data company in $2.2bn deal as it deepens AI marketing push (Financial Times, Samuel Angini and Sarah White) we see that the French advertising and PR company has agreed to buy LiveRamp as part of its push into AI marketing. The takeover is an all-cash affair and was made at a 30% premium to LiveRamp’s closing price on Friday. I guess from

Publicis’s point of view, it’s all about “if you can’t beat ’em, join ’em”. AI is having such a massive effect on the ad industry right now.

Then in Nine in 10 financial influencer posts offer ‘low quality’ advice, study finds (Financial Times, Steve Johnson) we see that a study by Queen Mary University in London has concluded, after a large-scale investigation, that virtually all guidance offered by financial influencers on social media is of “low quality”. Almost 90% of posts contained “more negative than positive quality features”! The report looked at the output of over 2,500 finfluencers on Instagram, TikTok and YouTube and surveyed 4,200 adults across the UK. * SO WHAT? * These findings echoed the conclusions of previous research conducted by Newcastle and Birmingham universities and although finfluencers have helped democratise financial information they tended to put more emphasis on high-risk areas including crypto and forex trading. I would personally run a mile if you see advice from anyone on socials who poses with luxury cars, yachts etc. on their thumbnails 😎 – particularly if they say they are telling you “secrets” and that it is all “easy”. Having worked in the industry for many years myself I can tell you first hand that it is far from easy!

I think this lady makes some spot-on observations about some of the quirks of the English language. What do you think?? It’s probably fair to say that she feels quite strongly about what she says…

Lebanon and Israel to meet in Washington as ceasefire nears end (Financial Times, Raya Jalabi and Neri Zilber) shows that the two countries are readying for direct talks in Washington regarding the extension of a ceasefire that is supposed to end this week. Despite this truce, skirmishes have continued between Israel and Hizbollah. The drama continues…

Over in America, US Senate confirms Kevin Warsh as Federal Reserve chair, replacing Jerome Powell (The Guardian, Gaya Gupta) highlights the appointment of Trump’s guy for governor of the Fed. He’ll have the role for four years and comes in at a time when inflation is rising but the president wants him to cut interest rates. War, inflation and Trump’s tariffs have shaken the US. Why does the stock market keep going up? (The Guardian, Andrew Witherspoon) observes that despite all the turmoil and consumer nervousness, US markets continue to thrive. Essentially, it’s down to tech behemoths dragging up the indexes by themselves and Obscure Japanese stock measure widens on global hunt for AI winners (Financial Times, Leo Lewis) highlights another interesting phenomenon – the skyrocketing NT ratio, which tracks the divergence between the Nikkei 225 (the “N” in “NT” and the index that is tech-heavy and price-weighted) and Topix (the “T” in “NT”, which is market-cap weighted). This is down to investors seeking AI exposure outside the US markets. * SO WHAT? * I just thought that I’d point out why markets are up because Trump was on the telly the other day boasting that markets were strong. The implication he’s trying to make here is that what he’s doing is working – but the reality isn’t as simple as that. Right now, the AI bubble continues to grow and many US corporates have been knocking it out of the park according to the most recent quarterly numbers, which is resulting in a robust market. However, consumer confidence isn’t good, household spending power is shrinking and the fact that such a narrow group of stocks is having such an outsize influence on the wider markets is actually quite concerning because if you put all of that together, you have a recipe for what could be a nasty correction.

China’s fuel exports fail to rebound after Beijing signals easing of ban (Financial Times, Verity Ratcliffe and Edward White) shows that, despite China signalling that it would relax a ban on exports of jet fuel, gasoline and diesel, the level of those exports is still way below pre-war levels. Asian countries are crying out for oil and other refined products, so they will be feeling particularly disappointed that this recent relaxation is yet to have any effect. In the meantime, supplies continue to dwindle…

UK economy grew at the fastest pace in a year in the first quarter (The Times, Mehreen Khan) highlights the latest release from the ONS which shows that Q1 UK GDP growth hit 0.6% – its fastest growth rate in a year and a rebound from the 0.2% growth the economy eked out in Q4 last year. The services sector, which accounts for over three-quarters of economic output, was particularly strong and grew by 0.8% in Q1. Reeves seizes on surprise UK growth as evidence Labour leadership must stay (The Guardian, Tom Knowles) unsurprisingly latched onto this and said that it proved that the government had “the right economic plan”. She added that “Now is not the time to put our economic stability at risk”. Mind you, UK first-quarter growth ‘probably part illusion’, analysts warn (Financial Times, Delphine Strauss) shows that some economists are more circumspect about the figure, pointing out that Q1 has tended to start strong and then tail off as the year progresses.

Meanwhile, Starmer braces for leadership challenge by Burnham (Financial Times, George Parker, Rachel Rees, Chris Smyth and Jennifer Williams) shows that Starmer continues to face a leadership crisis as senior party members seem to be jockeying for position to topple him. I won’t go into too much detail here because a lot can change but suffice it to say, Starmer is in deep doo-doo.

LVMH to sell Marc Jacobs to WHP (Financial Times, Adrienne Klasa) shows that LVMH has now sold fashion brand Marc Jacobs to New York-based brand manager WHP as part of a plan by LVMH to streamline its portfolio of luxury labels. LVMH first bought a stake in Marc Jacobs in 1997 and the label was hot in the early 2000s. * SO WHAT? * LVMH has become what it is today thanks to four decades of acquisitions! However, over the last 18 months, it has pivoted from acquiror mode to seller mode disposing of Off-White as well as its stake in Stella McCartney and its travel retail business in Greater China. WHP currently owns Vera Wang, rag & bone and G-STAR.

Staying with luxury, Burberry tried to be Louis Vuitton; it should aim lower (Financial Times, Lex) shows that Burberry is now reverting back to more familiar territory in the mid-market after an attempted foray into higher-end luxury resulted in falling sales. Under the previous CEO, the company tried to make a push into the top tier (by November 2023, almost 30% of Burberry’s stock cost over £2,000!) but the problem was it didn’t sell and revenues just fell. The current chief exec, Joshua Schulman, has culled the more avant-garde products and returned to its classic trench coats, scarves and check patterns. Now only 3% of its stock costs more than £2,000 so it can do more volume and not have to discount. It is going in the right direction!

Then in UK landlord Landsec says occupancy levels at 20-year high (Financial Times, Euan Healy) we see that the FTSE 100 group has reported strong occupancy rates and announced

better-than-expected growth in real income in its latest results. Most of the company’s office space is in central London and have an occupancy rate of 98.6% while its overall occupancy rate is 98%. Landsec’s CEO added that “rents are growing at their fastest pace in nearly two decades”. * SO WHAT? * This is an impressive performance and comes after a rough few years in the wake of lockdown and the whole working from home trend. The question is whether it’s sustainable, though, as companies seem to be downsizing headcount at the moment.

In Currys’ turnaround king tasked with reviving tired Boots ahead of flotation (Daily Telegraph, Tom Haynes) we saw the announcement yesterday that Alex Baldock, formerly CEO of Currys, will take the top job at Boots. * SO WHAT? * Currys’ share price dipped when he announced his departure earlier this year because investors associated him with successfully turning the company around. I guess the idea here is that “the turnaround guy” can sprinkle some magic fairy dust onto the ailing high street stalwart and convince investors that it’s worth up to £7bn as it aims for a flotation at some point in the future. At Currys, he streamlined the store estate, cut costs, boosted online sales and pushed its “omnichannel” offering of services, repairs, credit and subscriptions. Can he do the same at Boots?? I think that Boots’ main revenue for future growth is going to be health and beauty, particularly because the demise of the department store means that there’s less competition. Medicines and prescriptions will keep footfall going but margins are going to be made on beauty.

In Ford shares surge after launch of power unit for data centres (Financial Times, Christian Davies) we see that Ford’s share price has boomed by over 20% in the last two days alone – its biggest hike since 2020 – on hopes that its new energy subsidiary, Ford Energy, will get the company a piece of the action in AI by providing battery storage capacity for Big Tech firms building AI data centres. It will use tech licensed from Chinese battery giant CATL. Sounds interesting, no?

Jaguar Land Rover annual profit falls 99% after US tariffs and cyber-attack take toll (The Guardian, Jasper Jolly) shows that JLR’s annual profits have all but evaporated thanks to the cost of US tariffs and a cyber-attack that hit operations at its factories for months. It also said that it took a bit of a beating in China where rivals are introducing new products. It wasn’t the only carmaker to suffer, though – Honda reported its first annual loss in 70 years as a listed company!

In a quick scoot around some of today’s other interesting stories, Klarna breaks even for first time since blockbuster New York IPO (Financial Times, Laith Al-Khalaf) highlights a potential turning point for the company as it announced the fact it broke even in Q1, helped by a surge in sign-ups for its debit card. The company’s primary business is offering interest-free consumer loans for retail purchases that let you pay in instalments but it’s been trying to move away from its BNPL origins and towards becoming a more traditional digital bank that offers products such as debit cards and interest-bearing loans. * SO WHAT? * I think that Klarna is becoming more interesting these days. I have slagged it off for quite some time now because I thought that it was a one-trick pony and that its business was kind of immoral in that it was encouraging people to spend outside their means in a cost-of-living crisis. However, the company appears to be growing up now (it’s been rumoured that it’s thinking about applying for an American banking licence, for instance) but I think that it’s lack of “baggage” means that its AI-forward strategy could actually work and differentiate it from its rivals. Its AI chatbot answers two-thirds of customer service inquiries. It has a decent client base – so all it needs to do now is deliver attractive products to them!

Then in Revolut prepares to launch private bank as it woos wealthy (Financial Times, Laith Al-Khalaf) we see that the newly-licenced Revolut is looking to launch a private bank in the UK and will provide complex financial instruments to clients to appeal to wealthy customers. The plan is to launch it later this year for customers who have at least £500,000 to deposit.

Hargreaves Lansdown to cut jobs in bid to fight off digital rivals (Financial Times, Emma Dunkley) highlights the investment platform’s plans to cut around 100 positions from its 2,400-strong workforce as part of a broader effort to streamline operations that will help it compete with intensifying competition including the likes of Interactive Investor and AJ Bell. * SO WHAT? * It’s been having a bit of a rough time of things in the last few years and change has been sorely needed. There’s still a lot of work to do.

Anthropic agrees terms of $30bn funding deal at $900bn valuation (Financial Times, George Hammond) heralds yet another massive fundraising for Anthropic – and this time it looks like it’s getting it at a level that implies a whopping $900bn valuation! This implies that it’s now bigger than OpenAI, which was most recently valued at $852bn.

It’s Friday – so what better day to learn a few important life hacks?! I think that the beer one looks like it could go badly wrong though…

The Prime Minister’s woes seem to be never-ending these days! Starmer prepares to fight leadership bid by Streeting (Financial Times, George Parker, Jim Pickard and Lucy Fisher) shows that the Labour leader just can’t keep a lid on rival bids for his job and there are rumours that health secretary Wes Streeting will quit his job and launch a leadership challenge this morning but there’s scepticism that he’ll be able to garner enough support from other MPs. How could a challenge to Starmer’s premiership play out? (Financial Times, Jim Pickard, Lucy Fisher and George Parker) describes the mechanics of how the process would work. First of all, Streeting needs 81 MPs to back his leadership bid. If he gets that, Starmer then has to decide whether to stand against him. He said on Monday that he would repel any challenges. Alternatively, Andy Burnham could enter the fray. He’s not an MP at the moment, but it’s possible that a loyal supporter could step down, prompting a parliamentary by-election for him that would allow him to contest the leadership. Burnham would then have to get approval by Labour’s ruling national executive committee which has rejected him before, but they might be more amenable this time around. Other potential candidates could step in but there are problems with each of them. Angela Rayner is in bother with HMRC over a big unpaid tax bill, Ed Miliband has a track record of losing (he lost in the general election in 2015) and deputy leader Lucy Powell ruled herself out. There are still potential surprises, but what is certain is that an official challenge against a sitting Labour leader has never succeeded. ‘Good night UK’: City giants dump bonds over Starmer leadership crisis (Daily Telegraph, Tom Saunders and Chris Price) reflects the market reaction to all the leadership shenanigans. Investors including Jupiter Asset Management, Jefferies and Edmond de Rothschild are among those who have either sold down or are avoiding UK bonds because of political instability and the prospect of a true left-winger getting into power and loosening all the fiscal rules.

So apart from all that, something else happed in Westminster yesterday! What was in the King’s Speech? (Financial Times, Chris Smyth, Jim Pickard and Lucy Fisher) lays out the numerous bills that were outlined which Starmer maintained would remove “barriers to growth”. Bills were announced on European Partnership (enables faster transfer of European laws into the UK statute book), Clean Water (overhaul of the water industry and replacement of Ofwat), Competition Reform (transformation of the CMA to make decisions more consistent), Enhancing Financial Services (modernisation of consumer protections), Overnight Visitor Levy (gives powers to mayors to impose a tourist tax), Regulating for Growth (to make regulators prioritise economic growth), Highways (make it easier to build toll roads), Digital Access to Services (a watered down ID scheme), Steel Industry (enables the industry’s nationalisation), Immigration and Asylum (a new system of asylum appeals), NHS Modernisation (streamlining of patient data, abolition of NHS England), Social Housing Renewal (changes the Right to Buy rule for council houses), Commonhold and Leasehold Reform (the phasing out of leasehold), Education for All (limits the numbers who will be eligible for extra help), Police Reform (the merging of police forces in England and Wales into bigger organisations), Late Payments (ensures faster payments to smaller companies), Civil Aviation (gives the CAA more powers to uphold passenger rights),

Nuclear Regulation (cutting red tape in the planning system), Electricity Generator Levy (measure to de-couple electricity and gas prices), Energy Independence (measures to “scale up homegrown renewable energy” – additionally, Miliband vows permanent shutdown of the North Sea (Daily Telegraph, Jonathan Leake) shows that the government is going to ban new oil and gas fields in Britain as part of this), Security (creates new offences to counter extreme violence online), Northern Powerhouse Rail (measures to enable its delivery), Removal of peerages (making it easier to kick peers out of the House of Lords – Peter Mandelson, inspired this one), Sporting Events (legislative framework to apply to all major sporting events in the UK) and Sovereign Grant (how much to pay the king) as new bills – and then there were six more that were initially announced two years ago but haven’t yet made it through parliament which were Representation of the People (extension of voting rights to 16 and 17 year olds and tightening of political finance rules), Courts Modernisation (the removal of the right to jury trial), Northern Ireland Troubles (helps victims and their families to get information and accountability), Railways and Passenger Benefits (the creation of Great British Railways and a passenger regulator), Public Office Accountability (the aim of which is to end a “culture of cover-ups”, Cyber Security (protects essential UK services from hacking) and Armed Forces (to improve the services justice system and establish the armed forces covenant). Phew! What does the King’s Speech mean for business? (The Times, Isabella Fish) shows that businesses weren’t particularly enthused by the content of the speech because it did not offer enough support for the pressures they are feeling right now as a result of the Iran war. The BCC, CBI and the BRC were among the industry bodies who pretty much said that measures didn’t go far enough.

Meanwhile, Nigel Farage faces inquiry over £5m gift from crypto billionaire (The Guardian, Ben Quinn and Peter Walker) shows that Reform’s leader is now going to be investigated by the parliamentary standards watchdog over the big donation he received just weeks before he said he’d stand as a candidate in the 2024 general election. There are various rules governing this and it sounds like Farage sailed very close to the wind on this, hence the investigation.

Then in Xi Jinping tells Donald Trump that US and China are ‘partners not rivals’ (Financial Times, Joe Leahy, James Politi, Edward White and Demetri Sevastopulo) we see the rhetoric going into the Xi-Trump summit but obviously it’s all noise. Likely subjects to be covered include the Iran war, Taiwan, trade and who’s going to win the World Cup (actually, I made the last one up). What Xi Jinping and Donald Trump want from their Beijing summit (Financial Times, Joe Leahy, James Politi and Haohsiang Ko) suggests that the summit will be an opportunity for Xi to project stability and the image of a reliable member of the global economy and for Trump to escape domestic issues and talk about something other than the Iran war (although he’s obviously going to talk about that as well). Some believe that Trump will try to get some help from China to put pressure on Iran while Xi might want Trump to relent a bit on Taiwan (and reduce US arms sales there) and they will both probably want to get some trade agreements sorted after last year’s massive tariff fiasco.

GLP-1 Users Are Taking a Bite Out of the Restaurant Business (Wall Street Journal, Heather Haddon and Amira McKee) shows that the proliferation of weight-loss drugs is changing the dining-out landscape because many Americans are eating less – and therefore reducing the number of times they go to restaurants. When they do go, orders are generally smaller and customers tend not to go for alcohol. Meanwhile, restaurants are facing higher costs and the problem of enticing people into their establishments because of the increase in the cost-of-living. A Gallup poll found that over 12% of Americans are taking GLP-1 drugs for weight loss as of last autumn, which is a significant increase from 6% in early 2024, while women and the people in the 50-64 age bracket have higher usage rates. It is expected that the pill form of the drugs is going to turbocharge usage. Interestingly, a lot of people don’t stay on the drugs and revert to previous eating patterns. * SO WHAT? * This was bound to happen – and you’d think that this would affect the “unhealthier” fast-food chain options (e.g. McDonald’s, Domino’s, KFC) particularly badly while healthier options (e.g. Chipotle) will thrive. Consumer goods companies including the likes of Nestlé and Coca-Cola have already made moves to offer healthier products and so it makes sense that restaurants will be trying to do the same by offering lighter options and smaller portion sizes.

StubHub Swings to First-Quarter Profit as Sales Climb on Ticket Demand (Wall Street Journal, Kelly Cloonan) shows that the ticket resale marketplace hit a Q1 profit as revenues climbed, echoing the success of Live Nation (although Live Nation had to pay out legal costs, so profits were dented). The demand for live events remains unabated and resale looks alive and well. As a result, the company was quite positive about the outlook. It’s also trying to branch out from selling to individuals by going towards enterprise-scale selling.

German holiday giant prays for bad weather in Britain (Daily Telegraph, Christopher Jasper) shows that package holiday giant Tui is hoping for wet weather in the UK so that consumers will book holidays abroad! * SO WHAT? * Many Britons are choosing to holiday in the UK because they want to avoid potential travel disruption because of jet fuel shortages and cut costs but this is clearly bad business for holiday operators such as Tui. At the moment, UK bookings are down 10% and almost half of their holidays remain unsold! Will late bookings come to the rescue??

In employment news, Cisco to Shed Jobs for All-In AI Push (Wall Street Journal, Dean Seal) highlights the latest tech company to announce a jobs cull in the name of putting more resource into AI (although it also mentioned silicon, optics and security). It now plans to cut less 4,000 jobs this quarter. This is equivalent to less than 5% of the workforce. The announcement was made at its results yesterday, which were actually pretty strong. The company had a positive outlook and shares climbed by an impressive 17%.

I thought I’d mention Chinese court awards compensation to sacked worker replaced by AI (The Guardian, Amy Hawkins) because a court in China found in favour of a worker who was replaced by AI – and awarded him over £28,000 in compensation. The worker joined a tech company in 2022 as a quality assurance supervisor overseeing LLMs used in AI products. The company subsequently said AI could do his job and offered him a demotion and a 40% pay cut. When he refused, they sacked him. The employee fought back and got compensation. * SO WHAT? * I thought I’d mention this because I can imagine AI-related sackings becoming yet another legal minefield that HR departments will have to deal with. The thing is that if AI renders swathes of jobs obsolete at a stroke, will the legal system be able to keep up? Or will governments have to step in with some kind of funding for those affected??

Xpeng in talks with VW about buying a factory in Europe (Financial Times, Kana Inagaki, Sebastien Ash and Ramsay Hodgson) heralds talks between Xpeng, often dubbed China’s Tesla, and other European carmakers – including VW – regarding buying a factory in Europe as part of its overseas expansion plans. VW has said that it needs to get rid of excess production capacity in Europe due to falling demand and tighter competition – and given that it already has a 5% stake in Xpeng, you would have thought that it looks like it’ll see some action here. VW’s restructuring efforts are ongoing…

Nissan ponders building cars for Chinese rivals at Sunderland plant (The Guardian, Jasper Jolly) shows that Nissan’s CEO has admitted that the company is considering building cars for other manufacturers at the UK’s biggest car factory in Sunderland. There’s speculation that Chery, which has aggressive expansion plans for the UK and Europe, is one of the companies in the running. * SO WHAT? * Nissan continues to struggle and yesterday posted a net loss for the last financial year. Surely some kind of deal with another manufacturer is inevitable!

In a quick scoot around some of today’s other interesting stories, Citadel tells key researchers to relocate from Hong Kong or quit (Financial Times, Zijing Wu, Arjun Neil Alim and Joe Leahy) shows that the hedge fund has moved some of its key quant strategy researchers out of Hong Kong and into Singapore or Miami. This team is crucial to the development of the company’s trading strategies and it’s rumoured that there were concerns about data security although the official line is that this was not the case. I wonder whether we’ll see similar moves at other hedge funds…

Back home, UK regulator pushes private credit groups to share more data (Financial Times, Martin Arnold) shows that the FCA is looking at plans to overhaul reporting requirements for

private credit groups in response to increasing focus on the rising risks in this corner of finance. At the moment, the provision of data is quite limited but the FCA wants to get more granular.

Then in UK estate agents at gloomiest in more than two years due to higher mortgage rates (Financial Times, Valentina Romei) we see that the latest RICS survey reflected a very pessimistic bunch as higher mortgage rates prompted by the Iran war has hit demand and sales. The number of new buyer inquiries and agreed sales also fell. The expected 2026 rebound looks like it’s dead in the water until the Iran war comes to an end…

Have you ever got back home only to find that the hummus you were looking forward to has mysteriously gone missing?? Well this guy describes his own harrowing experience through the medium of music 🤣…

Pentagon’s Iran war bill nears $30bn as Donald Trump renews threats (Financial Times, Abigail Hauslohner, Amy Mackinnon and Lauren Fedor) shows that the bill for the war continues to climb while Trump continues to make threats but Iran Expands Strait Definition (Wall Street Journal, Chelsey Dulaney and Saleh al-Batati) shows that Iran has made a feisty move in deciding to expand its definition of the Strait of Hormuz, adding that it would “not allow any kind of encroachment upon its waters and interests”. ‘I don’t think about Americans’ financial situation,’ says Trump (Daily Telegraph, Chris Price and Melissa Lawford) reflects the president’s priorities with regard to the war and the electorate, saying that “I think about one thing: We cannot let Iran have a nuclear weapon, that’s all”. This is a pity for ordinary Americans because US inflation jumps to 3.8% as Donald Trump’s Iran war sends petrol prices soaring (Financial Times, Myles McCormick and Kate Duguid) shows that the level of inflation hit its highest level in three years in April thanks to Trump’s war in Iran. The incoming Fed chief is going to have a rough time given that he’s running out of reasons to justify interest rate increases – and Trump is going to be on his back, pressuring him to cut them!

In terms of ongoing war impact, How war hit the Gulf dealmaking machine (Financial Times, Nicolas Parasie) shows that while Q1 deal  activity stoked banker expectations of Gulf states embarking on a deal bonanza, the Iran war cut expectations stone dead. Glimmers of excitement have emerged during the multi-week pause in hostilities but the fragile situation is not conducive to positive sentiment! Investment banking revenues are weakening and M&A activity has been particularly badly disrupted, according to Dealogic data. The Gulf IPO market, which has become one of the world’s most active over the last few years, has slowed down significantly and some biggies – like Emirates Global Aluminium – have been delayed. On top of that, Gulf state sovereign wealth funds are now reviewing their portfolios with a view to changing priorities, which will undoubtedly also involve the need to pull money out in order to finance increased defence spending and war reparations. * SO WHAT? * Although many bankers are trying to remain positive, they are probably now increasingly accepting of the fact that 2026 won’t be the bumper year they were expecting. That being said, I think that the future really does depend on how and when the war ends. If it ends in a way that engenders stability and a degree of certainty then I think that things could recover quite quickly. However, if it all ends in a tricky compromise with the ever-present prospect of the Iranians holding everyone to ransom again by closing the Strait of Hormuz and/or charging for safe passage, then a resumption in feelgood could take a while – particularly if central banks start to increase interest rates again, because that’s going to raise the cost of financing!

Japanese snack maker goes black and white on Iran war supply crunch (Financial Times, Harry Dempsey and Leo Lewis) is an example of a more unusual consequence of the war – that Calbee, which makes about half of Japan’s savoury snacks, is going to switch temporarily to

black-and-white packaging for 14 of its products. It says that the war is restricting the supply of petroleum-based colourants and that it is facing “ink-flation” as a result. Calbee’s marketing change will begin on May 25th. The government objected, saying that Japan has enough printing ink, naptha and synthetic resins to cope despite the country depending on the Middle East for over 90% of its oil! * SO WHAT? * This sounds like a very good publicity stunt to me but you can see why it’s spooked the government because this might spark panic across the corporate world. This news comes as the latest government figures show that consumer confidence has taken a big hit since war broke out – with some saying that the collapse is comparable to the one experienced in the wake of Fukushima in 2011.

Elsewhere, Russia cuts growth forecast as Putin’s war economy runs out of momentum (Financial Times, Anastasia Stognei) shows that the government has cut its GDP growth forecasts for this year from 1.3% to 0.4% despite rising oil prices that should benefit the country. Russia’s deputy PM blamed this on labour shortages, rising government spending and the cost of western sanctions. * SO WHAT? * GDP growth has been powered for the last few years by military spending but now the economic strains are starting to tell. Some observers are now saying that Russia would need the oil price to be north of $100 a barrel for quite some time to come in order to mitigate the impact of other economic problems. Russian businesses are having a tough time at the moment because the state can’t really support them – and this means they have to rely on credit. The main downside of that is that high interest rates make it harder to service their debts, which in turn puts the banking sector under stress as more loans go bad.

Back in the UK, Starmer clings to power after four ministers resign (Financial Times, George Parker, Jim Pickard, Anna Gross and Rachel Rees) shows that the PM had a busy day yesterday as ministers quite literally voted with their feet and Buckingham Palace in ‘crisis talks’ with No 10 over King’s Speech (The Times, Ben Clatworthy and Matt Dathan) describes some wobbles regarding what should be said today in the King’s Speech at the formal opening of Parliament today. Everyone was making a big thing about Wes Streeting having a meeting with Starmer this morning – but it lasted less than 20 minutes after which he was sent out! Starmer survives to fight another day and we are now hearing that Streeting might resign. Meanwhile, JP Morgan chief threatens to axe £3bn UK investment if Labour lurches Left (Daily Telegraph, Tom Saunders) shows the American CEO trying to turn the screws but let’s be honest – the bank’s making a ton of money at the moment and it even recently announced that it’s bringing jobs back from Paris to London so I think Dimon’s full of it. He’s just trying to make a point IMO. Starmer may still be in place but Borrowing costs ‘jammed above 5%’ amid rising expense and uncertainty (The Times, Mehreen Khan) shows that his task of reviving the economy’s still going to be difficult because City analysts reckon that borrowing costs are going to be higher-for-longer. It wasn’t as if we were rolling in it before the Iran war happened either – so any hopes of bullishness this year are mostly out of the window.

Stellantis and Ford turn to partnerships to tackle Europe woes (Financial Times, Kana Inagaki, Sebastian Ash and Megan Snaith) shows that the two car makers talked, at a summit in London, about the increasing importance of partnerships with both Chinese carmakers and even rivals in order to survive in a tough European market plagued by rising costs and falling demand. * SO WHAT? * This doesn’t sound sustainable to me for the long term unless the established companies come up with new technologies like batteries which use raw materials that the Chinese don’t already control the supply of!

Meanwhile, Panasonic battery business boosted by expected EV gains for Tesla (Financial Times, Harry Dempsey) shows that the Japanese manufacturer is now forecasting a rebound for its battery business as its main customer, widely believed to be Tesla, looks like it’s gaining market share. Panasonic reckons that demand for its US-made batteries would grow by a chunky 19% in

the current financial year which will help its battery division to double operating profit in the 12 months to March 2027! Annual net profit to March 2026 was not so good though – it halved thanks to big restructuring costs and a disappointing US EV market after the Trump administration took away the subsidies. US tariffs and an increase in battery production costs also took their toll. * SO WHAT? * Panasonic has been trying to execute a turnaround plan and yesterday announced a long-term growth plan focusing on becoming a hardware supplier for data centres.

Then in Tesla to Inject $250 Million into German Factory (Wall Street Journal, Mauro Oru) we see that Tesla is going to put a lot of money into its Berlin-Brandeburg gigafactory that has been making Model Y vehicles and battery cells since March 2022. The money will be used to boost production of EV batteries as demand for its vehicles in Europe recover.

‘There’s too much risk’: Britons on changing holiday plans amid Iran war (The Guardian, Jane Clinton and Nicola Slawson) shows that holiday booking patterns are changing as a result of the war and the resulting consumer fears about higher prices and travel disruption. Britons are getting very cautious and suddenly cognisant of the potential for flight delays and associated costs as well as fuel prices for road trips. Train trips and cruises are looking increasingly attractive as a result (although the hantavirus outbreak could put a dent in the latter option).

Greggs confirms price rises as bakery chain heads for Tenerife (The Times, Jessica Newman) highlights the inevitable – that Britain’s biggest bakery chain is putting prices up as it warned that the Iran war would increase costs. The company did, however, outline a cautiously optimistic forecast for the rest of the year against the backdrop of a “challenging market”. Investors were relieved to hear that pre-tax profits this year would largely be in line with last year. As an aside, the company announced that it would open a shop in Tenerife South airport, its first shop outside the UK since it closed down its Belgium business in 2008. The companies was at pains to say that this was a “test”. * SO WHAT? * I really hope that Greggs just sticks to its knitting and doesn’t put too much into overseas expansion – these things are often just a CEO ego trip that they use to bump up their pay (“oh look – our revenues in Liechstenstein were up by 52% last year”, which then triggers some massive share incentive etc.). The fact of the matter is that most foreigners’ perception of British food is not positive, so to open a Greggs in a country that actually has decent food is a ridiculous move IMO. Surely the better move would be to introduce Greggs in

countries that also aren’t famed for the excellence of their cuisine. Perhaps it would also be a good idea to roll it out in countries that are cold, which plays into their strengths in baked goods. To open up an outlet for homesick Brits in a hot country who can’t wait for the duration of a two/three hour flight to get their fix sounds like a bit of a niche audience to me.

In property news, Almost half of UK homes listed for sale failed to find a buyer (The Times, Charlotte Bend) cites research by Zoopla which shows that over half of UK homes listed in the last three years have failed to sell, mainly because sellers price too high. Older sellers were more successful at selling because many were downsizing and had more equity whereas younger people tended to want more. Meanwhile, New home builds fall 6% as housing market slows (The Times, Tom Howard) cites the latest data from the National House Building Council which shows that housebuilding in the UK is nearing its lowest level in 14 years. This just casts even more doubt on the government’s housing targets.

In commercial property news, Canary Wharf returns to profit as office values recover (Financial Times, Euan Healy) shows that Canary Wharf Group is now back in the black as the value of its office portfolio rose for the first time since the pandemic. The company is owned by Brookfield and the Qatar Investment Authority. * SO WHAT? * It did go through a tricky few years but things seem to be recovering nicely as employees return to offices and financial companies are, once again, seeking office space.

In a quick scoot around some of today’s other interesting stories, GameStop’s $55.5bn bid for eBay rejected as ‘neither credible nor attractive’ (The Guardian, Joanna Partridge) shows that the cheeky bid for eBay was rebuffed by the company’s board. It’ll be interesting to see whether GameStop has another go…

Blue Owl retail fundraising evaporates amid private credit concerns (Financial Times, Antoine Gara) shows that inflows to its flagship credit investment fund for retail investors has almost disappeared as concerns about private credit persist. The fund used to be catnip to investors but things have really changed now and the company’s share price has taken a more than 30% tumble this year. There are particularly big concerns about the fund’s massive exposure to software and tech loans.

Walmart Lays Off or Relocates About 1,000 Corporate Workers (Wall Street Journal, Sarah Nassauer) shows that the company has decided to streamline the business by combining its global tech and product teams. This isn’t going to be great for consumer sentiment as it comes amid a whole slew of big companies cutting jobs.

China’s ‘Two Billion Feet’ Are Suddenly Running From Nike (Wall Street Journal, Jon Emont and Inti Pacheco) heralds bad news for Nike as it seems that Chinese customers are falling out of love with the Swoosh and preferring to go domestic for their footwear needs. Hopes were high for

Nike when they first went there and things were great for a number of years – but now China is Nike’s worst performing overseas business. Brands like Anta and Li-Ning have exciting offerings and are pushing the boundaries of technology to make attractive shoes. * SO WHAT? * It seems that once-great American brands are losing it in China. Starbucks is another example of this but China has been beating the West at cars and green technology as well. Nike’s going to have to take a serious look at what’s going wrong there or it will just be subsumed…

Then in Will Chinese companies still move to Singapore after Manus crackdown? (Financial Times, Owen Walker) we take a look at whether the Singapore loophole has been permanently closed for Chinese companies or whether the Meta/Manus shutdown was a one-off. Chinese companies are restricted from getting foreign investment, so in order to get around this, they “move” their HQ to Singapore. Many Chinese companies have done this for years and Chinese authorities have mainly turned a blind eye – until Meta tried to buy tech company Manus. * SO WHAT? * FWIW, I wonder whether the Singapore loophole (aka “Singapore washing”) is China’s Strait of Hormuz equivalent. When the government’s in a good mood it can let companies go there – and when it’s not, it will draw up the barriers. The cottage industry of advisers who facilitate this could be affected longer term but for now, things are looking a bit trickier than they were.

This is quite an unusual set-up for a kitchen but if you are an aspiring Ninja Warrior or rock-climber, I can see that it makes sense 😮…