Innehållsförteckning för Issue 1271 från MoneyWeek

“[Tech giant Meta’s] first [multi-gigawatt data centre] is [to be called] Prometheus. The sound you hear is Mary Beard and other classical scholars rolling their eyes. Zuckerberg has named it after the titan in Greek mythology who stole fire from the gods… Has he forgotten the second part of the tale? Prometheus was punished… by being tied to a rock and having his liver pecked out by an eagle — for eternity… Many pockets of the business world… revel in Roman and Greek history… Nomura, the Japanese investment bank, in 2021 launched Cassandra, “an early warning model for financial crises”, perhaps failing to realise that the fate of Cassandra was that she was never to be believed… The more desperately classical a business name is, the more likely it is…

“Only weeks” after the UK government sold the final part of its stake in the bailed-out bank, NatWest gave its investors £1.5bn, comprising a £768m interim dividend and a fresh £750m buyback, says Kalyeena Makortoff in The Guardian. The bank also beat forecasts with a 4.4% rise in second-quarter profits to £1.8bn. This was in part due to higher income linked to its recent takeover of Sainsbury’s banking business. NatWest also raised its guidance for 2025, and now expects income to surpass £16bn, up from between £15.2bn and £15.7bn. The latest results suggest NatWest “is quickly becoming a dependable name again”, says Hargreaves Lansdown. Investors should be particularly happy that borrowers “are… resilient, with default rates staying at low levels and expected to stay on that trend”. There has also…

Shares in Franco-Italian eyewear giant EssilorLuxottica leapt in July on reports that Mark Zuckerberg’s Meta had taken a 3% stake (valued at €3bn) in the Ray-Ban maker. Meta may raise its holding to 5%. The eyewear firm and the tech giant have already partnered on the Ray-Ban Meta product line, fashionable smart glasses that have sold almost two million units since launch, says Olivier Dauzat in Le Revenu. Meta is keen to tap into EssilorLuxottica’s manufacturing and distribution expertise as it dreams of a hardware future beyond the smartphone. The premium rating of 33 times earnings is justified by strong profitability and cash flow, along with the growing technological profile of the business.…

Keir Starmer said on Tuesday that Britain will formally recognise a Palestinian state in September “unless Israel agrees to a ceasefire and commits to a two-state solution”, says William Booth in The Washington Post. The move comes after intensive lobbying from Labour MPs and amid growing public revulsion over reports of starvation in Gaza. On the same day, Arab nations Qatar, Saudi Arabia and Egypt signed a declaration alongside 14 other countries, including Britain and France, condemning Hamas and calling for the group to disarm and surrender control of Gaza, says Tim Sigsworth in The Telegraph. Starmer’s announcement “prompted condemnation” from the US, Israel and Jewish groups. In a statement on X, Israeli prime minister Benjamin Netanyahu accused Starmer of rewarding Hamas’s “monstrous terrorism” and punishing its victims. Starmer’s “ham-fisted”…

● In 15 years, Relx boss Erik Engström has “never given a proper press interview, preferring to let the numbers… do the talking,” says Alistair Osborne in The Times. This is a pity because the “shy Swede” has a good story to tell. Since November 2009, Relx’s market cap has grown from £10bn to almost £73bn, making it the seventh-largest company in the FTSE 100. It has shifted from printed journals to digital formats, with “analytical gizmos” putting it at the “vanguard of the AI revolution”. Divisions such as risk, science and legal all have strong growth prospects. “If Engström broke his media silence, he’d be quizzed” on the “out of place” exhibitions arm and his £13.5m annual pay. Still, he could point to forecast annual sales of £9.5bn or…

Gerard Minack, founder, Minack Advisors “US outperformance had nothing to do with things like QE or interest rates. It always came down to better corporate fundamentals,” says Gerard Minack, the former Morgan Stanley strategist who now runs his own consultancy, quoted on Livewire Markets. Yet this advantage has run its course. “I think US exceptionalism is going to peak this year.” US earnings per share grew at 4% per year in real terms over the past decade – more than twice the historic norm. This was largely driven by the Magnificent Seven, with growth for the rest of the S&P 500 more in line with the rest of the world. Yet Magnificent Seven earnings have become “a marvellous self-reinforcing dynamic”, as firms plough their earnings back into more investment in…

● International Public Partnerships (INPP) is to invest £250m over the next five years to take a 3% stake in the Sizewell C nuclear power station project in Suffolk. The investment, which is equivalent to about 10% of the infrastructure fund’s net asset value, will be made in annual tranches of £50m and will be funded by selling lower-returning assets. INPP’s share buyback programme, which is intended to return £200m by March 2026, will not be affected. ● Herald Investments says it is in talks with Saba Capital over the future of the latter’s 30% stake in the trust, but the US activist investor’s “current intentions remain unclear”. The £1.3bn technology fund “would like to find a resolution to the uncertainty caused by Saba’s large holding”, says chair Andrew Joy…

conservativehome.com You may have noticed “dodgy shops” popping up in your town, says John Oxley – barbers or vape stores or some other low-value business that “appears to be doing quite nicely despite having barely any customers or meeting any real need”. At the same time, other well-run and popular businesses are “squeezed into insolvency by rising wages, rents and taxes”. An investigation by London Centric reveals that such shops are doing a “robust” trade, while costing the public purse millions in lost taxes. Other reports have exposed illegal cigarette sales and other criminal acts. Some are probably laundering money. The “obvious criminality” is “dispiriting” and revealing of the state we are in. Britain is getting it backwards – there is never any shortage of new rules to follow, which…

● Several surprising factors can affect the cost of your car insurance, says George Nixon in The Sunday Times. “Whether a driver was born in the UK or not, whether they describe themselves as a chef or a cook or even when they applied or renewed their cover [can] inflate prices – in some cases by more than £100.” Then there’s your email address. When The Sunday Times applied for a quote with four different Admiral brands using six different email address – but keeping all other details the same – quotes came in a range of over £100. Work email address were always cheaper; a Yahoo one was the priciest. ● There were 27,850 estates that paid inheritance tax (IHT) in 2021-2022, the latest year of available data. Of…

● UK Export Finance (UKEF) provided a record £14.5bn of new financing in the 2024-2025 financial year, the government body has revealed. The export credit agency last year supported more than 650 British companies looking to start or increase selling overseas. UKEF, part of the Department for Business and Trade, provides a range of practical advice and support, in addition to financing facilities, to UK businesses with ambitions to step up their exports. ● Changes to Companies House rules that would have put an end to SMEs’ right to file abbreviated company accounts have been put on hold. The government had previously said that from April 2027, all businesses would be required to publish full accounts of their trading. However, ministers have now decided to maintain the exemption currently enjoyed…

2023 Cherubino, Ovale, GinGin Chardonnay, Willows Vineyard Chardonnay, Wilyabrup, Margaret River, Western Australia £38, goedhuiswaddesdon.com At a landmark Australian chardonnay wine tasting earlier this year, entitled “State by State, A Celebration of Premium Australian Chardonnay”, which I am very proud to say was organised by my wife, Amelia, it was clear to all who attended (which was the great and the good of the UK wine trade) that Aussie chardonnay has long been a superstar category in the wine world. To some of us, we already knew that Australia leads the world in epic tasting, great value examples of this masterful variety. Larry Cherubino was invited to showcase no fewer than eight of his wines, and every single one was stellar. Here are two! 2023 Cherubino Black Label Pemberton Chardonnay…

The AI Con How to Fight Big Tech’s Hype and Create the Future we Want Emily M. Bender and Alex Hanna Bodley Head, £22 Since late 2022, the launch of ChatGPT has propelled artificial intelligence (AI) into the headlines, triggering a massive surge of investment from governments and the private sector alike. AI proponents envision it as a panacea for humanity’s most pressing issues; a vocal contingent fears it could herald our downfall. In this book, Emily M. Bender and Alex Hanna contend that both AI enthusiasts and “doomers” are significantly overestimating the capabilities of this latest wave of innovation. Bender and Hanna argue that rather than possessing true intelligence, modern AI is essentially a more rapid and sophisticated form of pattern recognition. It can perform a broader array of…

Tesla’s CEO Elon Musk has warned shareholders in his electric-vehicle (EV) company of a “few rough quarters ahead”. Revenue has taken a hit from US president Donald Trump’s trade wars and anti-EV policies. The shares have fallen by a fifth so far this year, with year-on-year sales down 13% in the second quarter. Never mind. At least “die-hard” Tesla fans can now gorge on Tesla burgers with “Electric Sauce” for $13.50 a pop: Musk’s long-awaited Tesla Diner & Drive-In has finally opened in Hollywood, says Angela Yang on NBC News. The doors to the “retro-futuristic” diner opened at 4.20pm – “a classic reference Musk often makes to marijuana”. It is filled with Tesla technology, including a humanoid robot called Optimus serving popcorn. Diners can order American classics, such as fried…

“I’ve seen a couple of these deals that were rated by a ratings agency, and I have to confess it shocked me what they got rated,” Jamie Dimon told a conference last year. JPMorgan Chase’s CEO isn’t talking about subprime mortgages in the mid-2000s, but the ongoing boom in private credit markets. Private credit is a loan “made by an investment fund instead of through a bank”, say Kat Hidalgo and Paula Seligson on Bloomberg. The market for such lending has boomed since the financial crisis, as stricter regulation caused banks to pull back from lending to riskier firms. The resulting credit crunch squeezed borrowers with poor credit ratings – think small companies with lots of debt, or fast-growing technology firms yet to make a profit. Starved of loans, they…

The Pentagon is getting serious about rare earths. The group of 17 minerals are key components of the magnets used in everything from fighter jets to missile guidance. About 90% of global refining capacity is in China, leaving Western militaries dependent on a potential adversary. In July the Pentagon took a 15% stake in MP Materials, which operates America’s only rare-earths mine in California. The deal, an unusually direct intervention in the private economy, also guarantees a minimum price for the rare earths neodymium and praseodymium for a decade. Shares in MP Materials have quadrupled this year. It is the second-largest holding in the VanEck Rare Earth and Strategic Metals ETF (LSE: REMX), up 33% in a year.…

AI upstarts are supposed to “lay siege” to Google’s search-engine dominance, says Asa Fitch in The Wall Street Journal. However, Google-owner Alphabet’s latest quarterly figures suggest the “ubiquitous search tool” has proven “surprisingly resilient”. Google’s AI Overview tool, which displays AI-generated results in addition to more traditional links, now has two billion users (up from 1.5 billion last quarter). Combined with a 49% increase in the number of links displayed in searches, this has helped revenue from search rise 12% compared with a year earlier. The results underline Alphabet’s “continued ability to monetise its search traffic”, as well as the fact that the advertising market is still “relatively healthy”. The performance will certainly “soothe concerns” that AI chatbots such as OpenAI’s ChatGPT and Anthropic’s Claude are taking significant market share…

Mexican real-estate investment trust Fibra Next raised 8bn pesos (£320m) from its initial public offering (IPO), the largest debut on the country’s struggling stock exchange since 2018, says Bloomberg. The company, a spin-off from Fibra Uno, sold real-estate trust certificates (CBFIs) shares for 100 pesos each. The funds will be used to develop 500,000 square metres of industrial real estate. Fibra Next’s listing was delayed in 2023 because tax authorities failed to provide approval on time, and it was held up in 2024 as officials requested more information, coinciding with a poor year for the Mexican stockmarket. Fibra Uno has retained a major stake in the company.…

When Donald Trump began unveiling his tariff plans in April, investors feared we were entering a sharp and sudden bear market. Stocks dropped sharply around the world, with the US down 10% in two days. Yet the plunge was short-lived: stocks rallied as abruptly as they had dropped. The US and other major global markets have gone on to new highs. So did investors get rattled too easily – or are they too sanguine now? On the optimistic side, the deals that the US is striking with trading partners look less damaging than everybody feared in April. Yes, tariffs are unwelcome. They bring complexity and friction to global trade, and add costs. Those costs will be born to varying extents by the entire supply chain between foreign exporters and US…

Last year, Henderson European Focus Trust and Henderson EuroTrust merged to form Henderson European Trust (LSE: HET), with £680m of assets (after significant cash exits) and a well-regarded management team in charge. Just a few months later, though, the co-managers left Janus Henderson and the combined trust will now be merged into the larger Fidelity European Trust (LSE: FEV). The three- and five-year investment records of FEV and HET are already very similar at 33% and 74%. This is behind JPMorgan European Growth & Income (LSE: JEGI), on 46% and 99% respectively, but ahead of the rest of the sector. The enlarged FEV, with £2.1bn of assets, should now have better liquidity and will aim to maintain a mid single-digit discount to net asset value (NAV). Fees should be lower…

Investors beware the ETF casino Nir KaissarBloomberg Ordinary investors need to cling to their victory in “the battle of fees”, says Nir Kaissar. An investment in a cheap S&P 500 exchange-traded fund (ETF) in the mid-1990s would have grown 17-fold to date, “beating virtually every professional investor” thanks to zero commission trades and an average expense ratio of just 0.05% a year. Now, with the “hype” surrounding cryptocurrencies, artificial intelligence and private markets, Wall Street has spotted an opportunity to reverse decades of falling fees. Ever since the first ETF was launched in 1993, mutual funds have increasingly ceded market share. However, since the 2000s, Wall Street has “gradually encroached, turning what was a low-cost index haven into a high-priced casino”. There have been more than 270 new ETFs this…

project-syndicate.org The Cassandras are out in force in Britain, but “amid all the doom and gloom” about the prospects for the country and economy, there are some “positive developments that rarely get much attention”, says Jim O’Neill. The first is a “slow but important relative shift” in the housing market, which began almost a decade ago. This is that, although house prices in London are still “extremely prohibitive” at more than six times average earnings, they have come down from nearer to eight times earnings a decade ago. Several factors explain the fall, but the “gentle ongoing decline” is “surely ultimately a good thing” and will ease problems weighing on the labour market and social mobility if the trend continues. The second positive development is a shift in relative regional…

Two in five people have lost track of some of their assets. Are you among them? The national sum of money in lost accounts, ranging from savings and pensions to forgotten investments, has reached a new high of £89bn, according to Gretel. The firm, a free tracing service, says pensions are the most commonly forgotten asset, with an estimated £64bn in unclaimed retirement pots. Other lost assets include £2bn in lost investments and wealth management accounts, £2.5bn in shares, £8.1bn in life insurance, £5bn in forgotten child trust funds (CTFs), and £4.6bn with National Savings & Investments (NS&I), banks and building societies. The government will use some of the money that isn’t reclaimed. The Dormant Assets Scheme aims to release £350m for England between 2024 and 2028 from unclaimed assets.…

Does your company need cyber insurance? While high-profile cyber attacks on firms such as Marks & Spencer generate most of the headlines, there is a much broader cyber crime epidemic going on. Around 42% of small and medium-sized enterprises (SMEs) in the UK have experienced a cyber attack or breach over the past 12 months. The impact can be devastating. Transport company KNP last month announced it was closing down after almost 160 years in business following a cyber attack that left it locked out of its own IT systems. The damage caused proved too much for the firm to recover from. Data from BT suggests the average cost of a serious breach to a small business is just short of £8,000; but in many cases, the bill will be…

FRP Advisory Group (Aim: FRP) is a leading advisory company specialising in restructuring and insolvency services across the UK, with a market share of 12%. Over the past decade, it has expanded and doubled down on its position, increasing its share of the market threefold from 4% at the beginning of the 2010s. The firm has grown despite a relatively benign backdrop for insolvencies and restructurings. According to the Insolvency Service, the number of corporate insolvencies reached a high of 24,000 in 2009 (across England and Wales) before declining to 14,500 a year in 2015, 2016 and 2017, before rising slightly to 17,000 in 2019 and then falling again to a multi-decade low of 12,300 in 2020. In the years between 2009 and 2019, struggling businesses were supported by low…

Shi Yongxin, the abbot of the Shaolin Temple in Zhengzhou in China, is being investigated by multiple agencies for embezzlement, “improper relationships with multiple women” and “fathering illegitimate children”, says the BBC. Shi (pictured), 59, who has been the abbot since 1999, has long been the centre of controversy. He rose to the top rank at the temple in 1999, and became a national figure, joining China’s rubber-stamp parliament and serving as deputy director of China’s Buddhist Association. He earned the nickname “CEO monk” for his MBA degree and attempts to turn the Shaolin Temple into a global brand. The 1,500-year-old Buddhist institution, located in a mountain range in Henan province, now attracts thousands of visitors every year. Shi was no recluse, travelling the world with an iPhone and iPad,…

The EU’s trade deal with US president Donald Trump drew furious reactions in Paris and Berlin (see our politics page), but behind the theatrics the deal seems likely to be approved. The unequal accord will see the US impose 15% tariffs on most EU imports. Europe made vague undertakings to buy $750bn in “strategic” US goods such as energy, and to invest $600bn into the US. The pact is similar to the one the US signed with Japan last week. A disaster dodged Markets reacted with relief but little elation to the news. The Japan and EU deals take the worst-case scenario off the table – “a full-blown, tariff-and-trade war” like the one that followed America’s passing of the 1930 Smoot-Hawley Act, says Russ Mould of AJ Bell. European shares…

Britain’s fintech group Wise has “curbed a potential shareholder revolt” by winning approval of the transfer of its primary listing to the US, says Samuel Normal in City AM. This took place despite a backlash over plans for a ten-year extension to super-voting shares held by only a “handful of inside investors”, including co-founder and CEO Kristo Käärmann. The shares were set to expire in July 2026 but will now run for a further decade. The move to the US, originally announced in June, has led to “soul-searching among regulators and lawmakers alike about the UK’s capital market woes”, says Bloomberg’s Aisha S Gani. But it was relatively uncontroversial. It’s hard to dispute the company’s argument that changing location could ultimately “open up its shares to legions of retail and…

Five to buy Volex The Telegraph Volex’s shares surged 17% when the manufacturer of power cords and cable assemblies recently reported double-digit annual sales and profit growth. The stock could prove volatile in the near term owing to an uncertain geopolitical environment and US tariffs. However, Volex’s “solid balance sheet and sound competitive position” mean it is “well placed to benefit from an upbeat long-term economic outlook”. The shares’ valuation, moreover, is “modest”. 365p Mony Group Investors’ Chronicle Mony Group, owner of price-comparison website Moneysupermarket.com, generates half its sales from insurance products. When premiums surge, customers look for better deals, benefiting Mony. The stock fell after half-year revenue declined thanks to lower car-insurance premiums compared with a strong period the year before. In response, the company shifted its focus to…

“It will make Europe a leader in this market,” boasted Ursula von der Leyen, the president of the European Commission, when the Chips Act was passed back in 2023. The Commission was to mobilise €43bn in public and private investment in microchips to make the continent a world leader in technology. It would pump money into research, development and state-of-the-art technology. At the time, there was a global shortage of processors, and the US under Joe Biden was pursuing an even more ambitious strategy of self-sufficiency in chipmaking. It seemed vital Europe followed that lead. The target was 20% of the global market by 2030, double the percentage when the programme was announced. How is it coming along? Intel announced last week that it was giving up on Europe. The…

Tracker funds (also known as index funds or passive funds) aim to track the performance of a particular index, such as the FTSE 100 or S&P 500. The funds may hold all, or a representative sample, of the stocks in the underlying index (physical replication), or replicate the performance of the index via buying derivatives (synthetic replication). The aim is to have as low a tracking difference (the gap between the performance of the index and the fund) as possible. Since the goal of a tracker is to match the index, significant outperformance is as concerning as significant underperformance (even if it might not feel like that to an investor), because it suggests problems with the way the fund is being run. Tracker funds can be traditional open-ended funds (unit…

Activist investor Dan Loeb is facing a revolt from shareholders in Third Point Investors (TPI), his Londonlisted fund, over plans to merge it with a reinsurer controlled by Loeb’s New York hedge fund. A group of shareholders led by Asset Value Investors, who own 14% of Third Point Investors, say the deal “rides roughshod” over governance rules, and want to be offered the chance for a full exit at NAV. Third Point Investors is offering a $136m tender at a 4.8% discount, up from $75m at 12.5% initially, but this is less than a quarter of the capital. The rebels, who have filed complaints with the Financial Conduct Authority and Takeover Panel, want Loeb to be blocked from voting his 25% stake in Third Point Investors in favour of the…

“It’s the only song I’ve written that I was totally sure of. I said: ‘If this isn’t a hit, I shall be selling shoes somewhere.’” Alice Cooper (pictured) on his song School’s Out, quoted in The Sun “I once flew out to Uruguay during the Falklands War, to enter Argentina, with $150,000. I looked down on London where I lived, and thought: ‘I’ve got more money on me than my house is worth.’” BBC foreign correspondent John Simpson on travelling with money for bribes, quoted in The Sunday Times “You can easily vote your way into socialism, but you must shoot your way out.” Ayn Rand, quoted on X “Next time the university comes looking for cost savings, I know where to point them.” A Warwick University professor after the…

engelsbergideas.com Today’s youth face a “deadly threat”, says Aaron Maclean – the rise of AI. Like a stroke, this is a very real threat to the minds of the young. Some are already arguing that educational institutions should incorporate the use of AI into class writing projects. The youth are doing it anyway, the reasoning goes, so we should teach them the best way to use the tools at hand. But the purpose of writing is not to produce the best possible paper with the available tools. It is to practise writing – which is to say, reasoning. We are already in an educational “bronze age”. If you want to see what the gold or silver ages looked like, look up a class syllabus from a century or two ago.…

Don’t get caught out on foreign-exchange (FX) fees on holiday this summer. Many banks charge a foreign-transaction fee of around 1% -3% on each non-sterling purchase. They may also charge an additional flat fee, ranging from 50p to £1.50, every time you spend. And if you plan to withdraw cash, expect to pay a transaction fee of around £1.50. Using the right bank account, credit card or travel cards can avoid those fees. As far as bank accounts are concerned, Monzo, Starling, Chase, Revolut and First Direct do not charge FX fees. Many other bank accounts do, but premium accounts waive the fee when you use your debit card abroad. Nationwide, for example, does not charge FX fees if you have the Flex Plus account – but it costs £18…

A high-profile case that saw a fish and chip shop owner fined £40,000 should be regarded as a wake-up call by SMEs without robust processes in place to comply with immigration laws. The penalty was levied against the Surrey-based firm after immigration officers arrested a member of its staff who was working illegally. The employee had reportedly supplied the business with false documentation. The law in this area has become tighter in recent years. The upshot is that all new employees should be subjected to “right to work” checks before you take them on. One option is a manual check, which requires staff to produce specific documents to prove they are entitled to work. These will include their passport or another form of ID, a letter from a previous employer…

“Thermo Fisher is a leader in instruments for clinical research and diagnostics” Despite a turbulent global landscape in 2025, equity markets have remained resilient, a reminder of how well good businesses often respond to shocks and challenges. And it’s not just world events they’re having to cope with. Persistently high bond yields are raising the bar for equity investors. When returns on cash in the bank and relatively safe bonds are high, it suppresses their appetite for stocks. In an environment of uncertainty like this you need to focus more than ever on quality companies, valuation discipline and portfolio diversification. The Goshawk Global Balanced Fund UCITS ETF (LSE: ROE) delivers on these fronts. Below are three holdings that illustrate the diverse opportunities in global equities. Leaner and meaner Mitsubishi Electric…

Our Dollar, Your Problem An Insider’s View of Seven Turbulent Decades of Global Finance, and The Road Ahead Kenneth Rogoff Yale University Press, £25 For the past eight decades, the US dollar has been the undisputed king of global trade. Yet this dominance was not always seen as inevitable, nor is its future entirely secure. Kenneth Rogoff tells the story of how the dollar has in the past fended off challenges from the Soviet rouble, Japanese yen, euro and Chinese renminbi. The economic, political and cultural might of the US (which still accounts for 17% of global GDP) played a significant role in this success, of course, but the shortcomings and missteps of its rivals also contributed. Some believe that bitcoin or other digital currencies could now be loosening the…