Thursday 20/03/25

In war and defence news, US could take over Ukrainian nuclear power plants, Donald Trump tells Volodymyr Zelenskyy (Financial Times, Felicia Schwartz, Christopher Miller, Polina Ivanova and Richard Milne) highlights the latest idea floated by Trump in that if the Americans did that, it would be an incentive for Russia not to attack again (but I wouldn’t trust either side to stick to this!). Meanwhile, EU to exclude US, UK and Turkey from €150bn rearmament fund (Financial Times, Henry Foy and Lucy Fisher) shows that the three countries could be excluded from a new EU defence fund unless they sign defence agreements with the bloc. Talks between London and Brussels have dragged because negotiations have been part of a wider agreement that encompasses other controversial issues like fishing rights and migration. British defence suppliers ‘dangerously reliant’ on foreign banks (Daily Telegraph, Michael Bow) highlights another tricky situation regarding defence, according to former defence secretary Grant Shapps. According to stats from Dealogic, the UK’s biggest four lenders (Lloyds, Barclays, HSBC and NatWest) have arranged just $13bn out of $51bn in debt funding for the British defence sector over the last ten years. US banks raised $17bn and European ones raised $11bn in comparison while Canadian and Asian banks raised the rest. UK banking sources, however, pushed back on this assessment and said that Dealogic’s figures may not be showing the whole picture. TBH, I don’t think that this is a massive issue but it’s worth Shapps rattling the banks’ cages…

Fed cuts US growth forecasts and holds interest rates (The Times, Mehreen Khan) shows that the Fed has reined in its growth forecasts due to the expected impact of Trump’s tariffs, which are widely expected to push inflation higher. The Fed kept interest rates unchanged at the 4.25-4.5% range, adding that there was no need “to be in a hurry to adjust our policy” and that “uncertainty around the economic outlook has increased”. * SO WHAT? * This is going to be frustrating for Trump because he wants interest rates to come down. Interest rate cuts are generally good for markets and good for business because they make borrowing cheaper, which means that they are more likely to invest. The problem is that Trump is spreading so much panic and uncertainty with his uneven dishing out of tariffs that businesses will be finding it hard to make plans.

Back in the UK, Reeves will not raise taxes in Spring Statement, say officials (Financial Times, George Parker and Sam Fleming) shows that the chancellor is already trying to calm fears ahead of next week’s Spring Statement by saying that she won’t raise taxes. Instead, she will cut public spending. We won’t have long to find out more detail but this news may come as welcome relief to some (at least until the next Budget!).

In EU accuses Google and Apple of breaking its rules, risking Trump clash (The Guardian, Rob Davies) we see that the European Commission has accused US tech companies Google and Apple of breaching rules in the Digital Markets Act, which means that they could be fined 10% of worldwide revenues, or 20% if they keep breaking the rules. The EC said that Google’s search engine prioritises its own services and that Google Play prevents developers from pointing customers towards other channels. It said that Apple must make its operating systems available on devices made by competitors. All of this is designed to promote competition. * SO WHAT? * Trump and Big Tech like to frame this as a witch-hunt of successful American companies driven by jealousy. Trump has said that any regulatory action against US companies will be met with more tariffs on foreign goods. This could get messy!

In chip news, Nvidia to spend hundreds of billions on US supply chain over next 4 years, says chief (Financial Times, Tim Bradshaw and Michael Acton) shows that the company is planning on spending around half a trillion dollars on chips and other electronics manufactured in the US over the next four years in an effort to tilt the supply chain away from Asia and towards the US to appease Trump. A wise move!

In other tech news, SoftBank expands AI portfolio with $6.5bn Ampere deal (Financial Times, David Keohane) shows that SoftBank has agreed to buy chip start-up Ampere Computing for $6.5bn as part of the company’s push into AI. Ampere makes processors for cloud computing and data centre applications based on Arm’s technology. Arm itself is going to launch its own chip later on this year. Sounds like a decent enough acquisition from a strategic stand-point!

Then in CoreWeave looks to raise up to $2.7bn in IPO (Financial Times, Tabby Kinder and George Steer) we see that the much-talked about data centre operator CoreWeave is looking to raise up to $2.7bn in an IPO that could start to kick into gear this week with an investor roadshow. * SO WHAT? * This could be the biggest US tech listing so far this year. The business originally started off as a crypto miner in 2017 but then pivoted to AI two years later as it became a major buyer of Nvidia’s GPUs. It now leases out its computing power to the likes of Microsoft, OpenAI, Meta and IBM.

In Crypto Exchange Kraken Nears $1.5 Billion Deal for Futures Trading Business (Wall Street Journal, Lauren Thomas) we see that the crypto exchange is on the verge of buying NinjaTrader, a US retail futures trading platform as part of a broader effort to diversify its user base and asset classes in which it operates. * SO WHAT? * Given the increasingly crypto-friendly Trump administration, it sounds like Kraken is surfing the wave of crypto feelgood! It is rare for crypto companies to make big deals like this – and this one would rank as one of the biggest in the industry if it went ahead.

Elsewhere, Deutsche Bank to axe 2,000 more jobs (Financial Times, Florian Muller) highlights the latest round of cuts for the German bank that will hit its retail division. This is part of the overall effort to rein in costs and boost profitability and will involve branch closures and cuts will mainly be in Germany. Deutsche Bank’s pain continues…

Then in Prudential’s profit growth muted by China slowdown (Financial Times, Lee Harris) we see that the Asia-focused insurer saw new business profits rise but overall but the mainland China and Hong Kong business proved to be a drag on its profits.

M&G enjoys fruits of cost-cutting drive with higher profit target (The Times, Ben Martin) highlights robust results from the asset manager and insurer that was originally spun out of Prudential in 2019 thanks to cost cutting efforts bearing fruit.

EY cuts jobs in pullback from UK legal sector (Financial Times, Suzi Ring and Ellesheva Kissin) shows that the Big Four accountant has decided to restructure its legal business. It will pull back from previous lofty ambitions to provide broader legal services in order to focus on corporate law, company secretarial, tax litigation and immigration. * SO WHAT? * EY started its push into legal services back in 2014, a few years after the law changed to allow non-lawyers to own and manage law firms and lawyers via an Alternative Business Structure (ABS). TBF, EY’s had all sorts of problems over the last two years, including the disastrous vote on whether it should separate its auditing and consultancy businesses so it’s not that surprising that it’s reviewing its legal business as well.

In a quick scoot around some of today’s other interesting stories, BYD’s 5-minute charge: is time running out for electric-vehicle rivals? (Financial Times, Edward White, Kana Inagaki, Gloria Li and Song Jung-a) takes a closer look at BYD’s latest technological advance to shock the industry – its new refuelling tech that will charge its EVs in the same time it takes for a conventional car to get refuelled – around 5 minutes. This comes just a month after it announced another major tech development – that its “God’s Eye” advanced driver-assistance system would be made available on all of its models as standard. The new charging tech will mean that 400km of range can be added in just five minutes! This has apparently been made possible by a more advanced battery cooling system than western rivals. * SO WHAT? * BYD rival, Tesla, is way behind as the best its supercharger system can manage is adding 320km in 15 minutes. Mercedes-Benz just unveiled an all-new electric CLA compact sedan that can get 325km’s worth of juice in 10 minutes, a similar range to a new type of battery from BMW. Chinese battery specialist CATL said last year that its Shenxing Plus battery could get up to 600km of range with just 10 minutes of charging. Advancing Chinese technology is going to make life much more difficult for Korean makers in particular. From the driver’s perspective, though, it looks like range anxiety will soon be a minor consideration…

Tesla continues to hit the headlines for all the wrong reasons as Elon Musk decries ‘violent terrorism’ as Teslas hit by Molotov cocktails (Daily Telegraph, Chris Price) shows that there have been further attacks on Tesla showrooms and cars in America, something Musk blamed on “hatred and violence from the Left” and Tesla’s Cybertruck has become the world’s most hated car – Maga loves it (Daily Telegraph, James Titcomb) chronicles attacks on Cybertrucks during

New Orleans’ Mardi Gras festival. The event’s marshalls were being transported in the vehicles, which were attacked. They had to keep the doors locked because they were scared of getting dragged out. * SO WHAT? * As for the Cybertruck, it’s not as if other markets can come to the rescue. It’s not road legal in Britain or on the Continent because its sharp edges put it in breach of European safety regulations. I really do think that, at some point, Musk is going to have to distance himself from Tesla because his association with it seems to be doing more harm than good.

Back home, UK house prices rise widening gap with flats (The Times, Tom Howard) cites the latest research from Halifax which shows that house prices have been outpacing those of flats over the last year. Homes offering more space are now boosting demand. meanwhile, UK consumer confidence edges upwards, says BRC (The Times, Jack Barnett) cites the latest BRC survey which shows that consumer confidence turned up slightly over the last month on more optimistic expectations for personal finances and retail spending. This echoed the findings of the most recent GfK consumer confidence survey index. We’ll have to see what sort of effect next week’s Spring Statement will have on this fragile optimism!

Zara does not belong on the sales rack (Financial Times, Lex) is an interesting article that looks at its recent blip and subsequent panic selling by shareholders last week but observes that its clothing collections were being “well received” by shoppers. Inditex (the owner of Zara, Massimo Dutti and other brands) is a serial outperformer and so last week’s miss will have freaked some people out but its stores continue to trade well and it still has double-digit operating margins.

This video is a bit of camping/outdoor cookery ASMR. It’s a lot of hassle to go through for a posh sausage sandwich but I guess they don’t get Deliveroo at this place 😁. It is quite relaxing to watch this guy going about his business though!