Thursday 06/02/25

There’s never a dull moment while Trump’s in charge is there! Trump’s Gaza plan watered down amid backlash from allies (The Times, Josie Ensor and Samer Al-Atrush) shows that backlash from the international community has forced Trump to reel in his original proposal to “take over” the Gaza Strip despite his contention that “everybody loves” the idea. The UN described the proposal as ethnic cleansing and would break international law. Secretary of state Macro Rubio subsequently said that Trump was just offering to come in, help with the clean up and bug out while White House press secretary Karoline Leavitt emphasised that the president hadn’t committed to putting boots on the ground, did not pledge to pay for the reconstruction or displace Palestinians permanently. I guess this is an example of Trump shaking the tree and pushing those limits. Well on this occasion, he was met with strong resistance. Benjamin Netanyahu vows to restart war in Gaza (Financial Times, Neri Zilber) shows that hopes of peace have been dashed as Israel’s leader sounds like he’s keen to resume fighting with Hamas. An initial truce had been agreed – and it’s still got a while to run with talks about a full end to the war due to start next week.

Moving on to Trump Tariff Talk, Wall Street quizzes US companies over tariff risks (Financial Times, Gregory Meyer, Taylor Nicole Rogers, Amanda Chu, Oliver Barnes, Claire Bushey, Madeleine Speed and Susannah Savage) shows that Wall Street analysts have been all over corporates, asking them about their respective exposure to Trump’s new tariff regime. Companies are obviously looking at mitigating strategies and contingency planning as well as trying to calculate how much this is all going to cost them. It’s common practice for analysts to do this when something major like this happens because this is what all the clients are going to be asking! US tech firms caught up in Donald Trump’s tariff war with China and EU (The Times, Alex Ralph) shows that China reacted to the tightening tariff regime by launching an inquiry into Alphabet earlier this week and now it looks like the State Administration for Market Regulation is preparing to investigate Apple’s policies and fees for app developers. China is Apple’s second biggest market, so this is not good for them!

Nearer home, EU to tighten checks on goods sold by sites such as Shein and Temu (The Guardian, Jennifer Rankin) shows that the EU is planning on tightening current regulations that allow parcels worth under £125 exemption from customs duties. This mirrors measures taken in the US to make life harder for foreign online purveyors of cheap goods to flood the market without paying taxes. UK urged to follow Trump’s lead and shut Chinese tax loophole (The Times, Isabella Fish) shows that a number of high-profile retailers support following Trump’s lead regarding the closing of this tax loophole because these online sellers put them at a massive disadvantage price-wise. * SO WHAT? * The main wrinkle here is that Shein is thinking about listing in the UK and authorities might be a bit nervous about getting too eager.

In energy news, Norwegian firm lobbying to open Rosebank oilfield halves green investments (The Guardian, Jillian Ambrose) shows that state-owned Equinor is pushing for a massive new oilfield off Shetland to be opened whilst also halving its investments in low-carbon energy. Despite getting approval by the government, a landmark court ruling decided that this action was unlawful, leaving the whole thing in limbo. * SO WHAT? * Equinor is just the latest oil and gas company to cut back on their previously-stated climate commitments. Shell and BP have already signalled that they are going the same way. I’ve said this all the time but let’s get real – these companies don’t really care about the environment, it’s not in their nature. They make money by drilling holes in the earth. It’s like tobacco companies saying that they want to wean us off tobacco – ain’t gonna happen. They make too much money selling cigarettes! This sounds somewhat defeatist I know, but pretending that these companies are something else is just a waste of time. It’s unfortunate, but at this precise moment in time (and for a good few years yet), we need fossil fuels and the oil and gas companies want to make money from what they do best. I think that the last few years have made us all realise just how much power we need and where all the deficiencies are. Just ask Germany…

Then in World’s biggest offshore wind developer Ørsted slashes investment by 25% (Financial Times, Rachel Millard) we see that the nightmare continues for the world’s biggest offshore wind developer as it announced yesterday that it would dramatically cut its targets for developing renewable energy as it continues to make efforts to get out of its current rut. Specifically, it said that it would slash its planned investment to 2030 by a chunky 25%, less than a week after it replaced its CEO. Trump’s election won’t have made a turnaround any easier given his apparent pro-fossil-fuel/anti-green agenda…

Back home, Starmer pledges UK planning reforms to boost nuclear power (Financial Times, Jim Pickard) highlights an announcement that PM Starmer is going to make today whereby the government will amend the planning system to accelerate the delivery of new nuclear power stations in England and Wales. This will involve the ditching of a list of eight sites that had been considered for larger nuclear reactors, giving developers more options regarding where the SMRs can be built. Also, the expiry date on nuclear planning rules will be removed so that projects don’t have to restart all over again and there will be a new Nuclear Regulatory Taskforce to monitor regulatory improvements that will enable more companies to build nuclear projects. * SO WHAT? * This sounds positive in theory, but it will be interesting to see how this plays out and how popular SMRs will actually be. Will they get more pushback than onshore windfarms, I wonder?

Google backtracks on pledge not to make weapons using AI (Daily Telegraph, Matthew Field and James Titcomb) shows that the tech giant has decided that free countries should be able to use the tech for national security, thereby ditching a longstanding promise not to use it to develop weapons capable of harming people. * SO WHAT? * Presumably this has come about because a) the company is trying to ingratiate itself to Trump and b) the DeepSeek news will have prompted renewed fears that the Chinese won’t be so shy to use AI for national security purposes.

In tech hardware news, Chipmakers Qualcomm and Arm post sales rise on smartphone strength (Financial Times, Michael Acton and David Keohane) shows that the two semiconductor manufacturers managed to post strong quarterly sales growth yesterday thanks to improving smartphone demand. * SO WHAT? * Despite this success, the share prices of both companies fell, but that may be due to the “it’s-better-to-travel-than-to-arrive” market adage as their share prices have been strong over the last year and this presented a high note on which to take at least some profits off the table.

Sonos to Cut 12% of Jobs in Further Restructuring Push (Wall Street Journal, Sabela Ojea) highlights some dramatic actions being taken by the maker of premium wireless audio equipment

as it has decided to cut costs to improve its core experience and deliver new products. It is expected that the impact of this will be biggest in its Q2 earnings. * SO WHAT? * Things started to fall apart badly last May when it rolled out an app update that froze out a lot of their customers who became unable to connect or use their speakers. Q4 results then saw big revenue and sales declines, hence the panic. Results are due out today.

Then in media news, Walt Disney beats analysts’ forecasts, with help from Moana (The Times, Louisa Clarence-Smith) shows that the house of mouse’s quarterly results came in above market expectations thanks to a strong performance by its Disney Entertainment division, which includes film, TV and streaming. On the downside, the company said that it had lost 700,000 Disney+ subscribers in Q1 and warned of a “modest” fall in Q2 because of a price increase. * SO WHAT? * This obviously contrasted unfavourably with arch-rival Netflix which announced a massive gain of 19 million subscribers in the most recent quarter. Disney conceded that Netflix had won the streaming war over the last quarter but indicated that it was hopeful about the positive effect of the addition of ESPN. It was a bit concerning to see weakness in the theme parks business as this is usually a reliable cash cow. This was due to the effects of hurricanes Helene and Milton in Florida, so I guess there’s not much that could have been done about that.

In a quick scoot around some of today’s other interesting stories, Britain’s job cuts at fastest pace since 2008 financial crisis (The Times, Jack Barnett) cites the latest S&P Global PMI survey that measures activity across the UK’s private sector which showed a slight improvement in output on the one hand but also reflected the biggest fall in employment – apart from the pandemic shock – since the financial crisis. * SO WHAT? * It seems that Reeves’s Budget impact is hitting sentiment and recruitment but some economists have suggested that the PMI could be overstating the scale of the job cuts as the survey tends to be more sensitive to business sentiment. I guess that surveys need to be examined in conjunction with “hard figures” to get a proper grasp of the situation because surveys tend to reflect sentiment and not always reality. That being said, it seems to me that there are a lot of other indicators out there that reflect this feeling among businesses. It perhaps wouldn’t be such an issue on its own but the problem is that there is a lot of uncertainty out there what with Trump’s new trade policies and instability in Europe and the Middle East in addition to Reeves’s new policies.

Talking of job losses, Santander UK staff brace for more job losses after 38% drop in full-year profits (The Guardian, Kalyeena Makortoff) shows that the bank is going ahead with headcount reductions after it reported a major drop in profits. A decent chunk of this was down to the lump sum it had to put aside for the car loan commission scandal last November, but it was also driven by higher wage costs. It is now looking at ways that it can streamline the business. * SO WHAT? * The bank is currently thought to be considering its future in the UK (although it recently said that it remained committed!) and you do wonder why anyone would buy it given that the UK is a competitive and mature market.

In pharmaceuticals news, GSK launches £2bn share buyback and upgrades sales forecast (The Times, Alex Ralph) shows that growth in HIV, oncology and specialty medicines gave the company the confidence to upgrade its long-term sales outlook while Novo Nordisk confident despite Trump tariff risk as sales of weight-loss jab soar (The Guardian, Julia Kollewe) shows that Europe’s biggest company brushed off Trump tariff concerns as Wegovy sales almost doubled!

Elsewhere, Chinese rival overtakes Tesla as Britain turns against Musk (Daily Telegraph, Matt Oliver) cites the latest SMMT figures which show that BYD is now the biggest seller of EVs in the UK. It is the first time BYD has outsold Tesla on a monthly basis. It would seem that Musk’s dabbling in politics isn’t going down too well here, something we’ve also seen in France.

Then I saw this article What are rare earth elements, and why does Trump want them from Ukraine? (The Guardian) and thought I’d include it here because it is actually very useful! So, Trump said the other day that he would help Ukraine if it could secure the US supply of rare earths. “Rare earths” are a group of 17 metals that are actually abundant – but the problem is that getting them out of the ground results in large amounts of toxic waste.  Trump wants them because they are essential ingredients for a number of everyday and high-tech products. Basically, China has a stranglehold on refining, so this is why Trump is keen to do a deal.

This guy does really interesting YouTube Shorts that deal with business/financial markets topics. Here he is explaining tariffs!