Tuesday 14/10/25

In war-related news, Hamas releases final hostages as Trump hails ‘historic dawn’ in Middle East (Financial Times, James Shotter and Andrew England) shows that the final 20 living Israeli hostages that Hamas held in Gaza were released back home while almost 2,000 Palestinian prisoners were released from prisons in Israel as part of Trump’s peace deal. There’s still a very long way to go on this. Then in Donald Trump to meet Volodymyr Zelenskyy in Washington on Friday (Financial Times, Christopher Miller, Amy Mackinnon and Steff Chávez) we see that Trump is going to host president Zelenskyy at the White House at the end of this week with a view to talking about how to get Putin to the negotiating table. Let’s hope Zelenskyy doesn’t get ambushed again. Will he be wearing a suit this time?? Perhaps a MAGA hat??

Then in US stocks rebound after Donald Trump takes softer tone on China (Financial Times, William Sandlund, Srinighi Balakrishnan and Arjun Neil Alim) we see that markets staged a bit of a relief rally after the latest TACO move by the president where he initially threatened 100% tariffs on Chinese imports on Friday only to chicken out and soften his initially aggressive rhetoric. Putting it bluntly, Xi has him by the balls and Trump knows it. The best Trump can do is make a big show of defiance but we all know that China has all the power when it comes to rare earths. Trump has to back down.

Back home, Autumn budget 2025 predictions: what could Rachel Reeves announce? (The Times, Mehreen Khan and Jack Barnett) takes a look at what might be in chancellor Reeves’s bag of tricks when it comes to the Budget. Now I think that predicting what’s going to be in the Budget this far out is a bit of a mug’s game, so I won’t spend too much time on it. That being said, the bods at Morgan Stanley have given it a stab and reckon she could raise £25-45bn (that is a huge range, even for economists 🤣) by introducing new taxes that target pension savings, property and gambling while council tax could be overhauled, tax loopholes could be removed and the the freeze on income tax thresholds could continue. We’ll see more of this between now and the Budget when it gets announced on November 26th.

In UK planning bill amendments added with new powers to tackle ‘blockers’ (Financial Times, Jim Pickard, Gill Plimmer and Julie Steinberg) we see that ministers have put together a set of

last-minute amendments to the planning and infrastructure bill that will be voted on in the House of Lords next Monday. Amendments include new powers for the home secretary to be able to prohibit councils from rejecting planning permissions in England and Wales. The idea is to shut down protesters’ ability to delay the process and help the government to hit its target of delivering 1.5m new homes over the course of this parliament. It’ll be interesting to see whether the Lords just wave this through or not…

In energy news, How mega batteries are unlocking an energy revolution (Financial Times, Nassos Stylianou, Sam Learner, Irene de la Torre Arensa and Sam Joiner) is a brilliant article about how advances in battery storage technology are helping to smooth out the volatility of power generation from renewable sources. It takes California as an example of how a more than tripling of mega battery capacity since a power outage in August 2020 has been transformational in ensuring more stable power supplies. Global capacity is expected to rise tenfold by 2035 and while the US and China dominate the market at the moment, accounting for around 70% of projects by power capacity, more countries are announcing plans to increase development – including the UK. Technological advances are being made, raw material costs are falling and the batteries themselves are becoming more efficient. * SO WHAT? * I have been banging on about this for a while now – that battery storage is just as (if not more) important that power generation because it’s vital to ensure that the power that’s generated actually gets used and deployed in the most efficient way. There was some really interesting research from the Energy Transitions Commission (ETC) which suggested that countries in “sunbelt locations” that have a combination of solar power and decent battery storage could see power costs halve versus what they are now using current fossil fuel-based systems. Countries that rely more on wind power (like the UK, Germany and Canada) – won’t be able to rely on batteries as much because wind is less consistent and so there will still be a shortfall. I thought that analyst Daan Walter at energy think-tank Ember put it best when he said that batteries can have the same impact on power  as “grain silos stabilised harvests and refrigeration preserved fresh food”. This is an excellent article and I’d recommend you read the full version if you have access.

US banks reporting season is clicking into gear this week and JPMorgan backs ‘America First’ push with up to $10bn investment (Financial Times, Joshua Franklin) highlights the bank’s decision to take stakes in companies of up to a total of $10bn to finance growth in areas that are key to US security, a sign that big businesses are putting money into Trump’s “America First” policies. This is part of a wider 10-year push for the bank to facilitate and finance $1.5tn in critical industries. It was interesting to hear JP Morgan’s chairman and CEO Jamie Dimon say that “This is not philanthropy. This is 100 per cent commercial. We are going to take our sources of research, bankers and investors, and we’re going to scour the United States and maybe the world for a new opportunity”. * SO WHAT? * I think that Trump and chums are going to love this. It’s a really strong statement and, given Dimon’s gravitas, it may put pressure on other major captains of business (particularly banks) to do something similar. Given all the testosterone that’s sloshing around in America’s boardrooms, maybe it’ll prompt business chiefs to outdo each other.

In Goldman Sachs to Acquire Industry Ventures for Up to $965 Million (Wall Street Journal, Kelly Cloonan) we see that the bank has agreed to buy venture capital platform Industry Ventures in cash and equity. The deal is expected to close in Q1 of 2026, pending regulatory approval. The idea behind this is to broaden client access to fast-growth companies and sectors.

It sounds like a decent enough idea in theory! We’ll have to wait and see how this actually pans out in practice…

Wall Street bank scrambles to contain fallout from private credit implosion (Daily Telegraph, Hans van Leeuwen) is an interesting article that highlights the trouble that US investment bank Jefferies is in thanks to its involvement in First Brands Group, the collapsed car parts maker that Jefferies has a stake in. The bank has been trying to restore confidence in its business despite major investors including the likes of Morgan Stanley and BlackRock trying to pull money out of the specialist trade finance fund Point Bonita Capital that it part owns. That hasn’t stopped shares in Jefferies from tanking by 20% so far this month though. Jefferies’ CEO and president have both had to come out publicly, dismissing concerns. * SO WHAT? * The collapse of First Brands Group has prompted heightened concerns about the broader “shadow banking” sector, where loans are made without any regulatory cover that loans from banks would have. IF perception changes and everyone gets the jitters about investments, the danger is that everyone will want to pull their money out at the same time – and that would cause all sorts of turmoil. For the moment, it feels like the general feeling is that this is still a relatively small part of the overall financial system so won’t lead to any kind of financial collapse.

OpenAI extends chip spending spree with multibillion-dollar Broadcom deal (Financial Times, Tabby Kinder) highlights the latest item that OpenAI has bought on its ongoing shopping spree – a shedload of computer chips from US semiconductor giant Broadcom. This could add an extra $350bn – $500bn on top of the $1tn it’s already spent on chip and data centre deals over the last few months! * SO WHAT? * All of these big deals are tying everyone in to OpenAI’s fortunes so as long as OpenAI does OK, so does everyone else. It will be amazing if all this gambling pays off, but the blowback could be disastrous if things go wrong.

In other chip news, Samsung on track for highest profit in 3 years (Financial Times, Christian Davies) shows that the South Korean chip maker is very much surfing the AI chip wave, which is

helping to turn around several quarters of sluggish growth while TSMC’s stock market rally is a triumph of need over fear (Financial Times, Lex) highlights the chipmaker’s ongoing dominance in its field and the fact that this dominance is likely to protect it from any kind of attack for quite some time. Its share price is riding high, its order book is overflowing and profitability continues to improve.

Meanwhile, Dutch courage on Nexperia heralds more unravelling of deals (Financial Times, Lex) emphasises the point I made yesterday about the Dutch government’s intervention with Nexperia that this state intervention in a Chinese asset could lead to the unwinding of other deals. The problem is that Europe needs to replace such key assets with home-grown ones!

In a quick scoot around some of today’s other interesting stories, Ford Cuts Production of Five Trucks, SUVs After Fire at Aluminum Supplier (Wall Street Journal, Christopher Otts and Bob Tita) follows on from the story I mentioned last week about one of Ford’s suppliers having a fire at a key facility – and shows that Novelis won’t be back on line until early next year, pushing back Ford’s production. Ford is Novelis’s biggest customer. Tricky.

Back home, UK retail sales growth cools amid fears over budget tax rises (The Guardian, Richard Partington) cites a report from the BRC which shows that retail sales growth lost momentum last month as consumers fret about their post-Budget finances. Separate figures from Barclaycard echoed this as well. * SO WHAT? * At the moment, everyone seems to be fearing the worst. The thing is, if the Budget turns out to be not as bad as people have feared, there might even be a decent Christmas for retailers as all that pent-up desire to spend is released! I think this is unlikely on balance, but you never know!

Novo Nordisk’s ‘lottery ticket’: can obesity drugs help treat Alzheimer’s? (Financial Times, Hannah Kuchler) shows that the pharma company behind weight loss drugs Wegovy and Ozempic is currently on tenterhooks as it waits to find out whether its weight loss drugs can be used to treat Alzheimer’s. Phase 3 trial results are expected to be published this quarter. It is a tiny chance, but given that other efforts so far have only slowed down cognitive decline rather than reverse it, Novo Nordisk is getting very excited. * SO WHAT? * Novo Nordisk could do with some good news after watching its share price more than halve over the last year thanks to a combination of disappointing trial results for a new obesity treatment, competition from cheaper obesity drug copies and rival Eli Lilly’s success. Given how far the share price has fallen, good news like this could reignite investor flames once more. Fingers crossed for all concerned…

There’s fusion and then there’s fusion. Every heard of a Yorkshire burrito?? These guys went to try it…