Thursday 30/07/26

In war news, US launches strikes on Iran after Donald Trump vows to deliver ‘beating’ (Financial Times, Steff Chávez) highlights the latest on the Iran war as Trump says he wants to deliver a “beating” while US oil inventories fall to ‘precariously low’ level as Iran war disrupts supply (Financial Times, Jamie Smyth) highlights the consequences of all this constant posturing as America’s strategic petroleum reserve is now hitting its lowest levels in over 40 years while, ironically, its oil refineries are running at or near maximum levels as they race to increase exports to Asia and Europe who had previously been highly reliant on oil from the middle east. * SO WHAT? * I guess that the major problem here is that if America’s reserves run dry, the exports are going to have to stop or be restricted as the domestic market takes priority. It seems like we’re not there yet but things seem to be heading that way…

In terms of other consequences of the Iran war, Pentagon Commits Over $120 Billion for Patriot Missiles, Submarines (Wall Street Journal, Drew FitzGerald and Marcus Weisgerber) shows that the Pentagon announced some major financial commitments yesterday to defence contractors including Lockheed Martin, General Dynamics Electric Boat and HII Newport News Shipbuilding that will support future combat operations. Trump is currently prioritising the replenishment of munitions stockpiles and raising shipbuilding capacity.

Meanwhile, US Fed holds interest rates after ‘family fight’ (The Times, Mehreen Khan) shows that the Fed decided to keep interest rates unchanged at the 3.5-3.75% range despite ongoing fears that higher global energy prices will lead to higher inflation. This non-move was widely expected but three members voted for a 0.25 percentage point rise while the other nine voted for no change, so it wasn’t unanimous. However, US borrowing costs hit 19-year high as Fed defies inflation fears (Financial Times, Claire Jones, Myles McCormick and Kate Duguid) shows that borrowing costs hit their highest level since 2007 as Treasuries reacted to the Fed’s “no change” decision. This move reflected fears that the Fed will fail to put the lid on inflation as a result of its inaction.

Then in FTSE 100 defies AI rout to hit record high (Daily Telegraph, Chris Price) we see that the FTSE 100 reached a new high in trading yesterday thanks to investors switching from US and Asian markets on fears of an AI bubble. The index hit 10,951.06 – the highest level since its formation in 1984! Clearly, it’s not always a bad thing to be boring 😁…

Reality bites for South Korea’s memory chip wonder-stocks (Financial Times, Lex) follows on from what I just said above as the likes of SK Hynix and Samsung are now a long way off their highs of five weeks ago and ‘My life’s screwed’: Korean investors stress out after AI bubble bursts (Financial Times, Song Jung-a) reflects the sentiment of retail investors who are now getting well and truly burned by the massive AI tech sell-off that we’re seeing at the moment. Retail investors have been the KOSPI’s biggest buyers this year after many missed out on the 75% rally they saw in 2025. * SO WHAT? * The problem is becoming so acute that the Bank of Korea has warned of increasing risks from household debt – and a bill has even been submitted to ensure that lossmaking retail investors are exempt from stock transaction taxes. Unfortunately, younger people have been disproportionately hit because the money that they would have put into home ownership, that is out reach for many, has been put into stock market bets that have now turned sour. Still, maybe there’s hope as Samsung’s Chip Earnings Push Net Profit to Record (Wall Street Journal, Kwanwoo Jun) highlights a stellar performance from the electronics company’s semiconductor division thanks to ongoing demand for its AI chips. The company reiterated its positive outlook for the coming quarters.

Staying with chip news, Qualcomm posts shrinking sales and profits as chip costs hurt smartphone market (Financial Times, Michael Acton) highlights disappointing news for the US chip designer as it said that both profits and revenues shrank over the quarter thanks to the drop in global smartphone sales. Although the company is now transitioning to make chips that are used in AI data centres, it has been caught up in the wider tech sell-off. On the other hand, UK chip designer Arm announced decent revenue and financial forecasts. Both companies are traditionally strong in smartphones and have been doing their best to hop on the AI hype train by broadening their offering. Nvidia’s chips may be novel, but its ‘circular financing’ isn’t (Financial Times, Lex) reflects on yesterday’s news about Nvidia committing a huge amount of money to a data centre in Texas and observes that it is essentially doling out the cheques to help its customers buy more of its products than they could actually afford right now. * SO WHAT? * Critics are worried that such investments aren’t going anywhere (hence “circular transactions”) but the article argues that such financing makes sense because everything AI-related is growing so quickly that raising money via traditional means will be too slow. If their projections work out, they not only benefit from chip sales, they also benefit from the investment they made at this

early stage – so double-bubble, essentially. The problem is that if things go the other way, they lose a customer and have even more exposure via the investments and it all starts to fall apart. Still, Nvidia has $80bn of liquid assets and makes about $200bn of cash per year so it’s pretty insulated for now. However, over time, this buffer might not be so big – and that’s what investors are worried about at the moment.

In data centre news, Microsoft signs $130bn in data centre leases as it races to meet AI demand (Financial Times, Ryan McMorrow) shows that the tech giant signed over $130bn in new data centre leases in Q2 as it continued to grow its commitments. The CEO said that Microsoft was on its way to roughly doubling its data centre capacity over two years. Brookfield and NextEra to build $100bn AI campus on ex-nuclear weapons site (Financial Times, Jamie Smyth, Martha Muir and Antoine Gara) heralds yet another massive data centre project, this time in western Kentucky while, back home, Data centre projects face crackdown to free up power grid (Daily Telegraph, Chris Price) shows that the energy regulator Ofgem is aiming to charge developers a fee to get a connection slot on the grid because speculative planning applications are crowding out “real” ones from other businesses. The idea is that this will cut down on the backlog of projects that are waiting to get connected. The size of the fee would be determined by the size of the project and would effectively force companies to make a deposit with the full fee being payable when developers accept a connection offer and refunded when it comes online. The deposit is expected to be worth anything between 2.5% and 7.5% of a typical data centre project – but it will not be refunded if the project leaves the queue early. It’ll be interesting to see whether this comes to fruition and how long it takes to have an effect!

Then in Meta shares tumble as Mark Zuckerberg tries to sell his vision for AI ‘agents’ (Financial Times, Hannah Murphy) we see that Meta’s share price fell by 7.5% in trading yesterday thanks to lacklustre financial results and rising expenses over the quarter. Investors are getting increasingly concerned that Zuck’s spending isn’t going to get the return he’s hoping for. He talked about a vision that focused on providing users with sophisticated AI “agents” that would autonomously carry out tasks for them around the clock and enhance health, hobbies, personal finances and/or career goals. Hmm. This is the man that waxed lyrical not so long ago about “the metaverse” although, to be fair to him, he has been right about other things…

Wildfires threaten France and Spain with ‘economic thunderbolt’ (Daily Telegraph, Hans van Leeuwen and Cameron Henderson) highlights the sad impact of the ongoing wildfires which President Macron has called France’s worst crisis since WW2. * SO WHAT? * Economically, the Gironde region relies on wine, forestry and tourism. Wine is weakening while forests are burning and tourism is evaporating. Wildfires are very expensive to fight and both France and Spain weren’t exactly rolling in cash before this happened. Everyone’s trying to guess what the ultimate hit is going to be but these things are notoriously difficult to predict and the fires aren’t even over yet.

In real estate news, London landlord Shaftesbury lifts dividend as West End rents rise (The Times, Tom Howard) shows that the West End landlord is seeing rising footfall and sales and that trading had been particularly strong over the last few weeks but, on the residential front, Housing market’s summer slowdown is worse than normal (The Times, Tom Howard) cites Zoopla research which suggests that the traditional summer slowdown in activity is worse than usual. This is probably due to a combination of a new PM, the World Cup and hot weather. Estate agents will no doubt be praying for a stronger end to the year once we get to September…

In business trends news, In-house legal teams get creative with AI tools (Financial Times, James Paton) is an interesting article that looks at the way AI tools are being used in in-house legal departments. Basically, they are doing things like using tools that take feeds from Slack, Notion and other platforms which then seek out potential regulatory and contractual issues as well as instances where their legal positions need updating. There’s still a lot of experimentation going on, but this does sound somewhat intrusive to me!

Then in India’s richest man plots swoop for British ports (Daily Telegraph, Christopher Jasper) we see that it’s not just the Americans who are in the mood to buy British companies -Gautam Andani, India’s richest man, is rumoured to be casting his eye over Associated British Ports with a view to making an offer. * SO WHAT? * ABP is Britain’s biggest ports company. Its ports handle about 25% of Britain’s seaborne trade. Will an acquisition of such an importance asset be allowed to be acquired by outsiders? Mind you, Felixstowe, Britain’s biggest container port, is controlled by various foreign sovereign wealth funds and Gatwick is majority-owned by French infrastructure group Vinci.

In terms of news on what consumers are spending their money on, MGM Resorts Revenue Edges Up, Driven by Las Vegas Strip (Wall Street Journal, Elias Schisgall and Molly Reinmann) shows that the hotel and casino company had a positive Q2 thanks to strong convention bookings, more flights to Las Vegas and a 20% rise in MGM Digital revenue. It’s currently considering a takeover bid from Barry Diller. Bags or baubles? How AI wealth divides luxury stocks (Financial Times, Lex) suggests that the recent uptick for luxury goods companies is at least partly thanks to tech investors (who presumably cashed out) buying trinkets. Chipotle Mexican Grill Posts Higher Sales, Driven by New Restaurant Openings (Wall Street Journal, Grace Yoon) shows that the fast-casual restaurant chain did well enough in Q2 to raise its sales guidance and Greggs shares soar as baker defies fears of sausage roll peak (Financial Times, Stephanie Stacey) highlights Greggs’ storming success in the first half, calming investor concerns that the UK had hit “peak Greggs”. It had benefitted from expanding its menu to include more iced drinks and salads. Interestingly, the company had been one of the UK’s most shorted stocks before this earnings report!

In a quick scoot around some of today’s other interesting stories, UBS and Deutsche Bank join Wall St rivals in trading-led profit surge (Financial Times, Mercedes Ruehl and Florian Müller) shows that the European banks managed to benefit like their transatlantic rivals from volatile markets that powered trading revenues but UBS also put in a strong performance in wealth management. Standard Chartered launches $1bn buyback as bank embraces AI (Financial Times, Arjun Neil Alim) shows that the Asia-focused UK bank had a decent quarter and announced headcount reductions in its operations department where it will use more AI.

Grant Thornton seals accounting sector’s largest takeover in a generation (Financial Times, Stephen Foley) highlights the biggest takeover in the accounting sector in a generation as Grant Thornton bought rival CBIZ for $5bn in cash. * SO WHAT? * The enlarged group will be the biggest audit and consulting firm in the US outside the Big Four, pushing RSM into fifth spot. CBIZ was the eighth biggest US accounting firm by revenue while Grant Thornton was the ninth. It’ll be interesting to see where they go from here…do I hear buzz words and phrases like “synergies”, “cost-cutting” and “cross-selling”??

In car news, BMW to cut ‘as many as 8,000 jobs’ under pressure from Chinese rivals (The Guardian, Jasper Jolly) shows that the nightmare continues for German carmakers as BMW announced plans to cut thousands of jobs, particularly in admin and development divisions in Germany. It currently employs about 160,000 staff. On the positive side, Ferrari hits 2026 sales target for polarising Luce EV within two months (Financial Times, Silvia Sciorilli Borrelli and Kana Inagaki) shows that Ferrari has already managed to hit its undisclosed sales targets for its €550,000 Luce EV thanks to strong demand from China.

Elsewhere, Airbus profits surge as jet deliveries rise (Financial Times, Sylvia Pfeifer) shows that the world’s biggest plane maker reported a rise in profits for Q2 thanks to an increase in jet deliveries. It has had a whole load of supply chain problems so this is good news for a change!

Talk about contrast! Here’s where techno and classical music collide…