Friday 13/02/26

The US president has been a busy lad. US and Taiwan sign trade agreement to seal chip investment (Financial Times, Aime Williams) shows that he signed an agreement yesterday to cut tariffs on Taiwan to 15%, in line with the tariff levels in Japan and South Korea, in exchange for making a $250bn investment commitment in the US chip industry. Donald Trump scraps legal basis underpinning US climate regulation (Financial Times, Myles McCormick, Martha Muir and Christian Davies) shows that the US Environmental Protection Agency scrapped a landmark ruling yesterday that has underpinned the regulation of emissions since 2009 as Trump said “This radical rule became the legal foundation for the green new scam – one of the greatest scams in history”. This is his biggest move yet to ditch environmental regulations that he maintains damaged American industry and pushed prices up for consumers.

In more uncomfortable news for the president, Donald Trump’s border tsar announces end of Minnesota immigration crackdown (Financial Times, Steff Chávez) shows that Tom Homan has diffused the Minnesota situation by ending the aggressive immigration crackdown that started over two months ago in Operation Metro Surge and led to huge outrage and two fatalities. Still, Homan declared the operation a success after it had resulted in over 4,000 arrests. * SO WHAT? * Clearly, something needed to be done and Trump has got midterms to think about. An AP-NORC poll released yesterday said that 62% of respondents thought that the deployment of federal immigration agents in American cities went too far.

US businesses and consumers pay 90% of tariff costs, New York Fed says (Financial Times, Myles McCormick and Claire Jones) cites the latest Federal Reserve research which shows that US businesses and consumers paid almost 90% of the cost of Trump’s tariffs last year. This obviously runs counter to the president’s narrative that foreign companies are taking the load and paying for the privilege of selling to America. Interestingly, foreign exporters took on more of the burden as the year progressed. A Supreme Court ruling on the legality of his tariffs is expected very soon. * SO WHAT? * White House spokesperson Kush Desai observed that “America’s average tariff rate has increased nearly sevenfold in the past year – yet inflation has

cooled and corporate profits have increased” and added that “Trump’s economic agenda of tax cuts, deregulation, tariffs and energy abundance are reducing costs and accelerating economic growth”. TBF, the impact of tariffs on consumer inflation has not had as negative an impact as many economists had expected. Some think that the impact will continue to feed through in 2026 as stockpiles built up before the tariffs came into force start to fall and companies increase their prices but many others believe that America is now over the worst, in terms of impact. The tariffs are thought to have raked in a tidy $124bn in for the federal government in the fiscal year to date – which is over 300% more than the same period on 2025! Meanwhile, according to the Tax Foundation think-tank, the tariffs led to an average tax increase on US households of $1,000 in 2025 and $1,300 in 2026.

Back home, UK economy grew by just 0.1% in final months of 2025 (The Times, Jack Barnett) cites the latest figures from the ONS which showed that the economy managed to grow by the skin of its teeth in the final quarter of 2025. Analysts had expected it to grow by 0.2% over this period. * SO WHAT? * TBH, I think that ANY growth was an achievement in Q4 given the government’s decision to have a Budget so late on in the year! There was a lot of speculation and panic flying around in the months leading up to the Budget itself which led to funds being withdrawn, less spending and general caution among households. We’ve already seen signs that people are spending again so we’ll have to see whether this becomes more sustainable.

Then in Weight-loss jabs push sugar price to five-year low (Financial Times, Susannah Savage) we see that the rising take-up of weight-loss drugs has led to people reaching less for sweet treats – and therefore sugar. This has had a knock-on effect to sugar prices, which have fallen to their lowest level since October 2020 and less than 50% of where they were in late 2023. * SO WHAT? * It doesn’t sound like the situation is going to get better in the near term because it’s difficult to cut supply quickly as sugarcane needs big initial investment and long planting cycles. Pressure is likely to intensify with the advent of the pill forms of the latest weight-loss drugs because they will be cheaper and easier to administer than the injections.

US stocks fall sharply as tech sell-off resumes (Financial Times, Kate Duguid, Emily Herbert and Ian Smith) highlights the on-again-off-again sell-off of the tech sector, which resumed yesterday. Big Tech names were sold off and AI-led mobile app development firm AppLovin cratered by a whopping 19.7% as the market reacted to its results that were published after market close on Wednesday. Why the AI attack on software has unnerved so many industries (Financial Times, Richard Waters) takes a look at why markets are so volatile at the moment. The thrust of it is that investors are getting jumpy about AI start-ups disrupting the business of big companies that rely on the provision of information to customers. This means that companies in finance, legal services, media and software have been hit badly on the release of AI-powered tech from companies like Altruist. Share values of property services firms tumble over fears of AI disruption (The Guardian, Julia Kollewe) highlights the latest sector to be hit by fears that AI will disrupt its business model as the share prices of Savills, IWG, British Land, Landsec, CBRE, Jones Lang LaSalle and Cushman & Wakefield were among those to see selling pressure.

Investors seem to be rotating out of high-fee, labour-intensive business models that will feel AI disruption. * SO WHAT? * I have to say that I think that there are going to be some very good buying opportunities out there because I think that the sell-off has been too broad-based because companies are going to get disrupted in different ways and to different extents. These are companies that have been very well-established and have solid reputations in their fields being sold off because of some new AI model. I expect investors to look very closely at just how much each company is ACTUALLY going to be badly affected by AI.

Then in Anthropic raises $30bn at a $350bn valuation in latest funding round (Financial Times, George Hammond) we see that the AI company has just raised a hefty chunk of money that gives it an impressive implied valuation of $350bn. This will just give it more ammo to mix it with the likes of Google, Meta and OpenAI. Not bad for a company that only started in 2021!

Schroders agrees £9.9bn takeover by US investment manager Nuveen (Financial Times, Mary McDougall and Emma Dunkley) heralds the takeover of the famed UK asset manager by US rival Nuveen. This comes after a bruising ten years of Schroders getting stuffed by the increasing popularity of low-cost passive investment managers. The deal now needs shareholder approval. Chicago crashes the Square Mile’s club with deal to buy Schroders (Financial Times, Mary McDougall, Emma Dunkley and Eric Platt) points out that the enlarged group will almost double Nuveen’s size and be one of the world’s biggest active fund managers (this means that humans decide which stocks to buy and sell rather than an algorithm). * SO WHAT? * This sounds like a good deal on a strategic basis because Nuveen is strong in the US and private markets while Schroders has never quite succeeded over there and was looking to build a presence in private markets. There seems to be little overlap and the Schroders brand is going to remain – along with

its chief exec. This does mean, however, that another name is going to disappear from the London Stock Exchange…

Meanwhile, Broker Clear Street postpones IPO as AI fears roil US stocks (Financial Times, George Steer) shows that New York broker Clear Street has decided to postpone its IPO, blaming volatile market conditions. It had hoped to raise up to $1.1bn but interest from investors proved to be lukewarm. The decision came as US stocks fell sharply in trading yesterday. * SO WHAT? * This is why I have been saying that companies with IPO ambitions need to be ready to float ASAP because the stellar valuations that many companies are enjoying at the moment aren’t going to last. IMO, they need to lock in that valuation before the moment disappears – as it did with Clear Street!

In a quick scoot around some of today’s other interesting stories, L’Oréal hails upswing in US and China as beauty market recovers (Financial Times, Adrienne Klasa) highlights further signs of the recovery of the beauty market in the second half of 2025 in its two biggest markets. This is good news (although the company’s numbers actually fell shy of market expectations) because it has had a tough time of it since the pandemic-era surge. This is good news and certainly seems to chime with a recent recovery in the luxury sector.

Pinterest Tumbles as Advertiser Pullback Weighs on Fourth-Quarter Earnings, Guidance (Wall Street Journal, Elias Schisgall) highlights investor reaction to it predicting slowing revenue growth over Q1 due to falling advertiser spend. Its share price fell by an impressive 18.5% in after-hours trading. The CEO said that the company is suffering from bigger retailers reining in their ad spend to protect their margins against Trump’s tariff onslaught.  I have a feeling this is becoming increasingly widespread and if it does become more common, then we’re going to see growing disquiet with the president’s policies.

Then in Why life is so unaffordable in Britain (Daily Telegraph, Tim Wallace) we take a look at why everything seems to be so darn expensive at the moment! Energy bills, house prices and childcare costs are just some of the things that seem to have accelerated in terms of cost over the last few years. Some are saying that this is self-inflicted by the government and although wages have increased by 143% since the year 2000, energy bills have risen by over 360%, house prices by 247% and childcare costs have risen by over 40% in the last decade alone! * SO WHAT? * Given the pressure that Starmer has been under recently, it’s thought likely that he’s going to lurch more to the left as Andy Burnham’s influence grows – and with it could come more cost and more regulation. The main problem with this is that people get angry and motivated when prices go up – and it’s this anger that brought Trump to power as voters expressed their frustration with a rising cost of living under Biden. Starmer’s got a tricky tightrope to tread in order to avoid the same fate as Biden…

Times are tough at the moment – but not for all! Can you imagine what it would be like to spend this amount on flights without flinching??