Friday 06/06/25

Donald Trump attacks ‘crazy’ Elon Musk as relationship implodes (Financial Times, Joe Miller) heralds the messy end of what has been a passionate bromance between two of the world’s most powerful and richest men. Trump branded Musk as “crazy” and threatened to cancel his government contracts as he threw his toys out of the pram for Musk slagging off his “big, beautiful bill”. Musk even went as far as calling for Trump to be impeached, said that his tariffs could push the US into recession, threatened to decommission SpaceX capsules used to transport NASA astronauts and hinted of Trump’s association with Epstein. Musk even spoke of starting a new party and forcing the Republicans out of office while Trump said that Musk had turned against him because he “took away his EV mandate”. * SO WHAT? * Never a dull day. The whole ridiculous nature of this implosion has the whiff of the cartoon-like “stories” played out in the WWE back in the day (maybe the two men got advice from the secretary of education, Linda McMahon, who has years of experience in this 🤣). Is this just Musk trying to get his street cred back so that people will buy his cars again? This is a very dangerous game that Musk is playing and although Musk observed on X that “Trump has 3.5 years left as President, but I will be around for 40+ years” there’s a lot of damage that can be wrought on him by a vindictive and powerful president.

All of these shenanigans do not make for good optics and Goldman Sachs reins in risk appetite as Donald Trump’s tariffs roil markets (Financial Times, Martin Arnold and Brooke Masters) shows that the investment bank had moderated its risk positioning because of the market volatility prompted by Trump’s actions. It also cited concerns about ongoing investor appetite for dollar-denominated assets given that the US debt mountain is highly likely to get even bigger. Goldman Sachs’s president and COO John Waldron said that he did not expect a recession – rather “slowflation” where GDP growth would perhaps be around 1-1.5% and inflation would be around 3%. He expects more uncertainty to come and expressed unease at the way debt is going, an opinion that has been echoed by rival Wall Street big cheeses at JP Morgan and BlackRock.

Meanwhile, Donald Trump and Xi Jinping agree to launch new round of trade talks (Financial Times, Edward White and James Politi) highlights some positive developments in the whole US-China tussle as the two leaders agreed to launch a new round of high-level trade talks after a bit of a testy week or so but then Judge blocks Donald Trump’s ban on foreign Harvard students entering US (Financial Times, Andrew Jack) shows that a US district judge managed to

temporarily block the administration’s latest attempt to ban international students from Harvard. * SO WHAT? * I think that this judgment will turn out to be a bit of a token gesture because I think that the damage has already been done. Who would want to chance their education and go there now even if Harvard wins its case? These are precious years in a person’s life and there are plenty of other academic institutions around that won’t feel like some kind of political minefield.

Then in Trump Media seeks to launch ‘Truth Social bitcoin ETF’ (Financial Times, George Steer, Will Schmitt and Alex Rogers) we see that the president’s family media company is looking at launching a bitcoin ETF to surf the wave of growing enthusiasm for digital currencies, an enthusiasm that Trump is directly stoking. TMTG announced yesterday that it had filed an application with US regulators to create the “Truth Social Bitcoin ETF”. If this ever fails for whatever reason, it will be like a massive house of cards…

In altogether more sedate news, ECB cuts interest rates to 2% in effort to bolster flagging eurozone growth (The Guardian, Phillip Inman) highlights the decision by the ECB, announced yesterday, to cut its interest rates by 0.25 percentage points to 2% in its eighth such cut in a year. The ECB said that it needed to cut the cost of borrowing in the face of the impact of Trump’s tariffs. Only one member of the ECB’s 20-strong committee voted to keep rates on hold – everyone else voted for the cut. ECB President Lagarde would not be drawn on the possibility of further cuts.

Back home, UK inflation overstated due to government data error, ONS says (Financial Times, Valentina Romei and Sam Fleming) highlights another example of ONS incompetence because now it turns out that they overstated the UK inflation figure by 0.1% in April because a mistake had been made in the tax numbers provided by a government department. The figure for April now has to be revised down from 3.5% to 3.4%. The market had expected 3.3%. * SO WHAT? * What is going on with the ONS?? This clown-like error follows on from its inability to provide accurate employment data. WE NEED PROPER DATA for the country to function!!! In a way it’s good that the ONS can admit its mistakes, but to make such howlers at such a sensitive time in the world economy is unforgiveable IMO. Their statement which said “We are working hard to address pressing issues and will publish a plan shortly to outline the restoration of our key statistical outputs” doesn’t exactly inspire confidence.

Big investors shift away from US markets (Financial Times, Harriet Agnew, Mary McDougall, Harriet Clarfelt, Kate Duguid, Alexandra Heal and Ivan Levingston) echoes the sentiment mentioned in the previous section by the COO of Goldman Sachs as big institutional investors are increasingly migrating away from US markets due to the uncertainty of the trade wars and the prospect of growing debt. Some believe that Trump’s tax bill will add $2.4tn to America’s debt over the next ten years and the concerns were reflected in a poll of fund managers published by Bank of America that shows the biggest underweight position in the US dollar in almost 20 years. Investment has been shifting towards Europe. * SO WHAT? * Everyone has got used to the US being the premier destination to park their cash for a very long time and at the start of this year, US equities made up about two-thirds of the value of global equities! The question is whether this asset shift is temporary or whether Europe is just providing a bit of shelter in the current storm.

Meanwhile, Circle Internet shares soar 168% on NYSE debut (Financial Times, Phillip Stafford and George Steer) highlights a stellar performance for the stablecoin operator on its market debut. Demand was so strong, in fact, that trading was halted three times due to volatility! The listing, which raised $1.1bn, is one of the biggest ones in the US this year and could be a sign that sentiment is improving regarding flotations. Chime Financial and Klarna will be crossing their fingers that this is the case! Lessons from a stablecoin IPO: tech turns on a dime (Financial Times, Lex) makes an interesting point about how Circle’s expectations of how its business would look when it last considered an IPO have turned out to be quite different to what they are now –

but it also says that there are risks of increased legislation covering stablecoins that could potentially clip the wings of its share price in future.

Wise to move main listing to New York in further blow to London (The Times, Alex Ralph) shows that the £12bn fintech company has decided to shift its main listing stateside because it was the “deepest and strongest capital market in the world”. The only consolation here for the LSE was that it said that it would keep a secondary listing in London. Leaving London’s market is not always a Wise move (Financial Times, Lex) points out that making the move is not a guarantee of greater riches and that it may not actually get that much more access to big investors, because it already gets that in London. Stock exchange dealt another blow as £12bn fintech ditches main London listing (The Guardian, Lauren Almeida) bemoans this move as another setback for the LSE. * SO WHAT? * This really IS bad news for the LSE as Wise was, as Peel Hunt’s head of research Charles Hall said “founded in London, scaled in London and floated in London”. Unlike some other candidates that have been tempted by the bright lights of New York due to their businesses becoming more America-weighted, Wise has decided to ditch the opportunity to be a big fish in a smaller pond (the FTSE100) to a small fish in a massive ocean (the NYSE). Studies by UBS show that where a company is listed does not have much impact on valuation but this move perhaps reflects the PERCEPTION of a London listing – and this may prove to be more decisive than data showing otherwise. The LSE needs to do all it can to stamp this out otherwise its fortunes will continue to decline…

Tesla’s market value suffers biggest one-day drop after Trump-Musk spat (Financial Times, George Steer) highlights a chunky 14% one-day drop for the embattled EV maker as the battle of the billionaires played out in public while UK sales of new Tesla cars slump by more than a third amid Musk backlash (The Guardian, Julia Kollewe) cites the latest figures from the SMMT which show that sales of new Tesla cars in the UK fell by a chunky 36% in May – in stark contrast to BYD’s sales rising by 407% (admittedly from a low base last year). In absolute numbers, Tesla sold 2,016 vehicles in the UK in May versus BYD selling 3,025.

One in 10 cars sold in Britain are Chinese (Daily Telegraph, Matt Oliver) points out the rise in popularity of Chinese brands here. At the moment, SAIC Motor-owned MG is the biggest selling Chinese brand while BYD, Geely-owned Polestar, Omoda and Jaecoo are all making ground. You do wonder whether the European makers can respond to this at all!!!

In a quick scoot around some of today’s other interesting stories, EU hit by surge in steel imports as US tariffs divert shipments (Financial Times, Andy Bounds) highlights a major influx of steel to Europe that had been destined for the US as the real-world impact of Trump’s tariffs take effect. Europe’s steel industry is calling for Brussels to take swift action to stem the flood. At the moment, imports of stainless steel bars and rods have shot up by over 1,000% year-on-year while prices have plummeted by 88%.

JPMorgan says it will fire analysts who accept future-dated job offers elsewhere (Financial Times, Ortenca Aliaj and Sujeet Indap) is an interesting article that highlights the bank’s no-nonsense attitude towards flaky graduates who want to have their cake and eat it. Its new policy says that incoming grads who accept future-dated job offers elsewhere within 18 months of beginning their analyst programme they will get the sack. This highlights the escalation of the war on talent between investment banks and private equity firms who have different hiring cycles. PE firms are being naughty by letting investment banks train up the grads for two years before skimming them for themselves.

In Wizz Air suffers £500m slump as engine troubles ground planes (Daily Telegraph, Christopher Jasper) we see that the budget airline’s share price dropped by a whopping 25% in trading yesterday on news that it was forced to ground dozens of its planes due to engine troubles. The company’s CEO said that the airline was forced to lease 12 aircraft and 40 spare engines to maintain its existing flight schedule, which all pushed up expenses. The company expects this situation to go back to normal next year but although it predicted revenues to rise this year it did not provide any profit forecasts.

Nintendo set to sell out Switch 2 console at global launch (Financial Times, David Keohane) marks the launch of the Switch’s successor yesterday! Online pre-orders have been strong and hopeful shoppers have queued outside stores around the world to have a chance at getting their hands on a console! The hype is real!

This is a video of two people doing pull-ups – with a difference! I think that this is insanely impressive! I need to go away and practice now 🤣