Monday 30/06/25

Russia hits Ukraine with biggest air attack of the war (Financial Times, Christopher Miller) highlights a major attack on Ukraine as Russia turns the screws and Ukrainians cry out for more help with defence. Ukraine has had to use fighter jets increasingly because of its falling supply of surface-to-air defence systems and interceptor missiles. It looks like there’s going to be no let-up…

Donald Trump’s fiscal policy and Fed attacks imperil US haven status, say economists (Financial Times, Claire Jones and Eva Xiao) cites the results of a poll carried out by the FT which found that over 90% of respondents were either somewhat concerned or very concerned about the status of US dollar-denominated assets keeping their “haven” status in the next five to ten years. At the moment, it looks like the Swiss Franc and gold are emerging as the safe haven assets of choice while Trump’s erratic policies and attacks on the Fed are increasing the risk premium. Meanwhile, G7 strikes deal with Trump to escape ‘revenge’ taxes (The Times, Jill Treanor) signals a positive move forward in trade negotiations as the G7 will exempt American companies from parts of a major global tax agreement in exchange for Trump’s administration no longer implementing a “revenge” tax detailed in Section 899 of his “One Big Beautiful Bill” although Republicans struggle to pass Trump’s ‘big, beautiful bill’ as debate drags on (Financial Times, Stefania Palma and Myles McCormick) shows that the bill only just garnered enough support to even get debated in the Senate. Getting this bill done has been a big priority for Trump and he wants senators to pass it before the July 4th holiday. Meanwhile, Trump accuses Fed chairman of keeping interest rates ‘artificially high’ (Daily Telegraph, Tim Wallace and James Titcomb) highlights further pressure on the Fed, which is supposed to be independent, as the president is laying the blame firmly at the door of Jerome Powell for keeping interest rates too high, lumbering the administration with high borrowing costs. The president said in a Fox News interview that he was looking forward to “getting somebody into the Fed who is going to be able to lower the rates”. Powell’s term is set to end in 11 months but it looks like Trump is looking to undermine him by naming his successor early. In the same interview, Trump says he has found group of ‘wealthy people’ to buy TikTok (Financial Times, Cristina Criddle) shows that he may or may not have come up with a solution to the TikTok problem, adding that “I think I’ll need probably China approval and I think President Xi will probably do it”. So far he’s kept delaying the deadline for parent company ByteDance to divest its American operations (the latest one is

September 17th) but I find it interesting that he’s not been very specific about who these buyers were. Whatever he says, any deal will have to be approved by ByteDance and the Chinese government.

Elsewhere, China manufacturing activity shrinks as trade war bites (Financial Times, Thomas Hale) cites the latest data from National Bureau of Statistics which shows that Chinese manufacturing activity contracted for the third consecutive months in June as the impact of the trade war with the US continues to bite. A truce between Washington and Beijing was signed last week, but you just don’t know what’s going to happen when Trump’s involved!

Back home, Ministers face showdown on UK welfare reform as concessions fail to quash rebellion (Financial Times, David Sheppard) highlights nervy times for the government as it still faces a vote on its divisive welfare reforms tomorrow. Despite Starmer’s climb down last week, it’s not a foregone conclusion yet as to the outcome! * SO WHAT? * The government has a working House of Commons majority of 165, which means that about 80 Labour MPs will need to vote against the welfare bill to defeat it. Starmer softened his original welfare reforms last week after over 120 Labour MPs threatened to rebel. The problem now is that, along with the previous U-turn on winter fuel payments, chancellor Reeves will have to find an extra £4.25bn from somewhere. A lot of people are predicting tax increases in the autumn Budget.

In markets news, Hong Kong IPO boom challenges the city’s critics (Financial Times, Lex) shows that the Hong Kong Stock Exchange is staging a major comeback after the investor exodus of two years ago as Dealogic numbers show that listings on the exchange have raised $13bn so far this year! * SO WHAT? * This means that it is behind only the NASDAQ – and puts it ahead of the New York Stock Exchange! Expectations are that by year end it will have raised a healthy $25.5bn. Another positive is that newly listed shares have made an average return of 35%, which is great for pipeline feelgood. Most of this has been thanks to Chinese companies getting a secondary listing in Hong Kong. Given the current hostile environment in the US for Chinese companies, it’s no wonder that they are ditching New York listings in favour of a politically safer Hong Kong – and there is plenty of demand! Retail investors have been a major force, but it seems that institutional investors are also finding their way back…

In Nvidia insiders cash out $1bn worth of shares (Financial Times, Michael Acton and Patrick Temple-West) we see that a number of Nvidia’s top brass have been cashing in on the company’s wave of popularity to the tune of over $1bn over the past 12 months, including CEO Jensen Huang himself. Over $500m of that was this month as the company’s share price hit a record high. * SO WHAT? * It is important to note that Huang’s share sales were part of a trading plan agreed back in March which set the levels at which share sales would be executed. This is worth saying because markets don’t like CEOs (or senior execs) selling shares because it implies that they know something bad is about to happen! This way, investors are less likely/unlikely to panic.

US energy groups spend record sums on power plants to feed data centres (Financial Times, Martha Muir) cites research from Jefferies which shows that US energy companies are putting a projected $212.1bn into building power plants and transmissions lines, rising to a record $228.1bn in 2027 in order to service the demand from data centres. * SO WHAT? * Given the massive sums involved, there’s an increasing likelihood that consumer and small business utility bills are going to rise in order to pay for this. One way of reducing this is to get “hyperscale” developers such as Amazon, Microsoft and Meta to fund utilities’ investments directly or via special tariffs. Although this article talks about what’s happening in America, you do wonder whether this is a sign of things to come over here as well! I keep saying it, but I don’t really see it mentioned anywhere else, but electricity demand isn’t just going to go up because of data centre demand – it’ll rise because people are still yet to adopt EVs en masse! We will need to make sure our infrastructure can cope!

Getty Images accuses ­Stability AI of dragging brand into gutter (The Times, Katie Prescott) highlights a legal fight between Getty Images and Stability AI where the former has accused the latter of bringing its brand into disrepute by allowing its watermark to appear on pornographic images. Stability had been aware of its AI producing watermarked explicit images and just carried on regardless. Getty Images argued that having the watermarks on the pictures exploited

its reputation and accused Stability of using millions of images and videos from its website without permission or payment to train its Stable Diffusion software. * SO WHAT? * If Getty is successful, this could have big implications for tech companies because it would mean that even if a model was trained abroad, if it breached copyright and was available here, it would be unlawful. Stability is arguing that its models are “crucial for scientific progress and creative freedom).

Entry-level jobs plunge by a third since launch of ChatGPT (The Times, Tom Saunders) cites the latest research from Adzuna which found that the number of entry-level roles has fallen by 31.0% since the launch of ChatGPT in November 2022. These entry level positions account for just 25% of the overall jobs market versus 28.9% in 2022. It also found that companies have become more vocal about using AI to cut their workforces. The CEO of Anthropic said last month that AI could cut about 50% of entry-level white-collar jobs within five years and push up unemployment by 10-20%. * SO WHAT? * The biggest fall in entry-level jobs was in the retail sector followed by logistics, warehousing and administration sectors. At the moment, I’m not so sure about the disaster scenario. Sure, employers have been hit badly by higher costs, but over the longer run, once they have got used to this, I would have thought that demand for humans will evolve rather than disappear. The CEO of Anthropic would paint a dark picture because he’s just talking his own book. At the end of the day, I would like to think that humans will ultimately want to support humanity and a balance will be found between the use of AI and the role of humans. Surely at some point, wages for HUMANS will go higher because the more procedural, repetitive jobs will be carried out by AI-powered robots and the more interesting ones requiring emotional intelligence, empathy and human understanding will emerge. BTW, I am aware that not everyone is against mundane, repetitive jobs because some people just see a job as a way of making some money to pay the bills. There’s nothing wrong with that – but the challenge here will be how to make sure that these people are more fully engaged in the employment market.

Crypto-crazy investors make South Korea the best-performing market in Asia (Financial Times, Song Jung-a) is an interesting story that highlights what’s going on in the South Korean stock market at the moment after newly-elected President Lee Jae-myung said that he would allow crypto-backed assets to be backed by the Won. Companies that would directly benefit, like Kakao Pay and LG CNS have seen their share prices more than double and rise almost 70% respectively this month before investors sold to lock in at least some profit! Other smaller crypto-related companies have also benefited enormously from the frenzy! * SO WHAT? * Retail investors in particular have been leveraging in order to jump on the stablecoin bandwagon before the government has announced any kind of detail about its crypto policies. At the moment, around 20% of South Korea’s population trades digital assets – and you would have thought this is going to rise amidst all the hype – while banks, brokerages and fintechs are itching to get a piece of the action. They need regulation. Is this a sign of things to come elsewhere?

Then in London-listed companies pile into bitcoin (Financial Times, Nikou Asgari) we see that London-listed companies are now increasingly investing in bitcoin as a way to bolster their share prices! They are all trying to copy billionaire Michael Saylor’s company Strategy whose valuation has boomed by almost 400% since August 2020 when it announced that it would plough billions of dollars into bitcoin. One example of this is the Guildford-based Smarter Web Company, a website design business, that has seen its valuation skyrocket from £4m to over £1bn in just two months after it announced its bitcoin buying plan in April ! Although its share price has weakened, its stellar performance has inspired others to emulate it. * SO WHAT? * Given that the government has said that it wants to make the UK a hub for digital assets, the fact that Trump is plunging headlong into them and that regulators are all getting more crypto-curious, it seems that the momentum is with crypto. It still feels like there’s a lot riding on something that

has no physical form but I guess the more people believe in it the more likely it is that success will be a self-fulfilling prophecy. It just all feels somewhat precarious, though, because everyone is piling in. That being said, a more benign regulatory environment will calm the nerves of many and give “grown up” institutions licence to move forward and offer it to the masses.

Then in UK launches biggest financial advice shake-up in more than a decade (Financial Times, Emma Dunkley and Martin Arnold) we see that the FCA will today unveil one of the biggest shake-ups in investment advice for over ten years by enabling British savers to get access to “targeted support” under new rules. Many people have been left behind in an “advice gap” where financial advice has been increasingly out of reach for “ordinary” people who can’t afford it but need more guidance than the current rules allow. The FCA reckons that around 7 million British adults have over £10,000 in cash savings and no investments and that 13.5m to 30.6m could benefit from targeted support. It said that it will consult with industry regarding rules covering targeted support by December on providing generic suggestions to groups of similar savers. Specifically, this means that there will no longer be arduous requirements to carry out detailed suitability assessments and firms will be able to make financial product suggestions based on customers providing “essential relevant facts”. * SO WHAT? * This sounds very interesting but I think that although the strategy sounds right, it depends on how this is executed. If it results in more people being stuffed with unsuitable financial products by advisers keen to make commission on the products that they sell, then this isn’t good. Also, I seem to remember a lot of excitement surrounding the provision of “robo-advice” to people with uncomplicated financial situations – but that died a death pretty quickly. I’ll get back to you with more on this because my wife works in this world!

In a quick scoot around some of today’s other interesting stories, Middle East tensions could trigger food price shock, warns fertiliser boss (Financial Times, Susannah Savage) shows that the head of one of the world’s biggest fertiliser companies, Yara, said that ongoing tensions in the Middle East could push food prices up because global supply chains could come under increasing pressure as everyone tries to source crop nutrients and energy. About a third of urea exports, 44% of sulphur exports and almost 20% of ammonia exports travel through or are produced in countries on the west of the Strait of Hormuz, an area that is highly charged at the moment.

Closer to home, Asda plots to overtake Primark in revival push (Daily Telegraph, Luke Barr) shows that the embattled supermarket is looking to take on Primark to become the UK’s biggest clothing retailer! Chairman Allan Leighton is going to push George, Asda’s clothing brand, at 100 new stores that will be refurbished to showcase the offering. “Primarmi” is currently sitting in the top spot of the biggest seller of clothes by volume, followed by Next and then George. * SO WHAT? * Now I admit that I’ve been slagging Leighton off recently, saying that just cutting prices

shows a lack of imagination and ⚽⚽. HOWEVER, I take that all back now because I think that this is a GENIUS idea. I’ve seen George transform Asda’s fortunes before and I think that the timing is now perfect to do it all over again. If it works, it could increase footfall, and if footfall goes up that’s going to be good for sales. I still think he needs to do something more to address the core retail offering, but I really think that this is going to help – as long as the product is good enough.

Then in Lotus reverses plan to shut factory after UK offers fresh support (Financial Times, Kana Inagaki and Jim Pickard) we see that Lotus will not now end car production in the UK following offers of government support. Lotus had said on Saturday that it was “actively exploring strategic options” to streamline its operations and improve global competitiveness after rumours emerged that it was thinking of shutting down its Norfolk factory. UK business secretary Jonathan Reynolds met Lotus management yesterday and it now seems that Geely-owned Lotus isn’t going anywhere.

I thought that this was quite a fun video about a place in Tokyo where you can go and customise jeans! I’ve got no affiliation with this place but just thought it looked good 👍