Table of contents for Issue 1296 in MoneyWeek

“Perhaps he’ll do an Elvis and have a fatal heart attack on the loo,” a friend muttered this week. Like most investors, she is having trouble getting used to the idea that the US president has become the main threat to global markets, and is reconsidering her portfolio’s exposure to certain regions and asset classes. So what should she, and we, be doing with our money? Firstly, don’t cling to the hope that we can turn the clock back to the post-war liberal internationalist era. People we know who work in Washington DC say Trump does not stand alone, his likely successors are as belligerent as he is if not more so, and the Donroe doctrine is now firmly entrenched in the administration. So with or without the president, it…

US banking stocks have taken a hit as president Donald Trump pushes for a 10% cap on credit-card interest rates. The proposal has attracted fierce opposition from executives at Wall Street’s biggest lenders, who argue that it would reduce the number of consumers eligible for credit. The KBW Bank Index is in the red for this year. More than a third of American adults carry a card balance, with the industry earning $160bn from interest fees in 2024, say Stacy Cowley and Niko Gallogly in The New York Times. However a cap would require legal changes, and congressional Republicans are reluctant to act against the powerful banking industry. While times are good for investment banks like Goldman Sachs, consumer-focused lenders had a bumpy fourth quarter, says The Economist. A federal…

Rachel Reeves is keeping bond markets onside, but voters are looking elsewhere for economic management. The Tories had a huge lead over Labour on economic competence in 2020, but the gap had closed even before the gilt meltdown precipitated by Liz Truss’s 2022 mini-budget. Starmer and Reeves cultivated the City, with Labour securing the endorsement of the Financial Times at the 2024 election. But Reeves has since presided over two “chaotic” Budgets while enraging everyone from farmers to family business owners, says David Smith in The Sunday Times. The Tories have regained their lead on the economy, with Mel Stride appearing to be an “old-fashioned shadow chancellor – in a good, Geoffrey Howe-ish way”.…

Boston Scientific’s stock slipped by 5% after the company agreed to buy medical-device maker Penumbra for more than $14bn, its largest deal in 20 years, says Bloomberg’s John Tozzi. Penumbra’s shareholders will have a choice of shares in Boston Scientific ,or $374 in cash, a 19% premium to Penumbra’s closing price last Wednesday. Boston Scientific says the deal is part of a strategy to allow it to enter “new high-growth segments” such as neurovascular devices that treat blood-vessel problems in the brain, and mechanical thrombectomy. The hope is that the firms, which will operate as separate units, will “also benefit from sales forces that reach different specialists”, allowing Boston Scientific to meet its targets of long-term organic revenue gains of at least 10% a year. It’s true that “size and…

Kenya is seeking to raise 106.3bn shillings (£615.6m) from the initial public offering (IPO) of a state-run pipeline company, the country’s first listing since 2015 and largest on record, says Bloomberg. The government is to sell 65% of Kenya Pipeline, valuing the infrastructure group at 163.6bn shillings (£947.4m). The listing is part of reforms supported by the International Monetary Fund (IMF) to help the nation reduce its over-reliance on borrowing and raise funds for infrastructure. Kenya’s key stock index gained 51% last year, the best showing since 2008, when telecoms provider Safaricom raised 50bn shillings (£289.6m) – the previous record flotation.…

● “No one is suggesting” that DFS’s management should “sit back and put their feet up”, says Russ Mould of AJ Bell. But the sofa seller should “feel satisfied” after lifting full-year guidance against a “difficult” consumer backdrop. Stronger margins show that the firm’s “increasingly tight grip on the upholstery” sector hasn’t been achieved through heavy discounting. The big increase in profit has been matched by a jump in cash flow, which is allowing DFS to reduce debt. Investors may be looking to the return of dividends, which were last paid in 2024. A potential pick-up in the property market could be picking up, but for now DFS needs to “focus on what it can control”: keeping costs down and making sure the right products are available to customers at…

“Think of me as an expert mechanic, walking around a second-hand car lot in which there are no warranties, and all of them are discounted for the risk of being lemons,” said activist investor David Webb in 2018. By steering clear of most of the lemons most of the time, “and getting a substantial discount on good companies, I have been able to outperform”. Webb, who died of cancer last week aged 60, was a former investment banker who rose to prominence as Hong Kong’s most vocal activist investor, says Bloomberg. He championed corporate governance reforms – fighting for minority shareholders, revealing dubious dealings, and criticising the city’s monopolies and tycoon-dominated industries. From 2003 to 2008 he served as an independent director on the board of Hong Kong stock exchange.…

A better approach to regulation Javier MileiThe Economist The industrial revolution led to an explosion in global wealth, says Argentine president Javier Milei. Population increased sixfold; income per head tenfold. AI could “do it again”, but politics, state intervention and “bad economics” are getting in the way. The fact is, large, dominant firms “emerge from superior technology and economies of scale. It should be unquestionable that exploiting these increasing returns to scale is socially beneficial” (it makes things cheaper). However, neoclassical economic theory insists that concentrated market structures are market failures that need to be disciplined. The EU, for example, targets excessive pricing. Yet high prices are “precisely” the signal competitors need. The crucial question is whether entry is blocked – which it often is, with hurdles erected by the…

project-syndicate.org AI is already “transforming” human life and “reordering entire economies”, says Peter Kirchschläger. It may even end up “redefining the meaning of work itself”. But the downsides are also “increasingly evident” – precarious working conditions, downward pressure on wages and a “structural mismatch” between what economies need and what workers are trained to do. The end result may be even more radical: the end of paid work. This concern is raised whenever new technologies are introduced, but this time the fear may be justified. Past technologies sought to make human labour more efficient or less physically demanding. AI seeks to remove humans from the process entirely. Indeed, “emerging evidence” suggests AI is “eliminating entire professions faster than new ones can emerge”. Yet this needn’t be a bad thing. The…

It is nearly eight years since Sam Isaly abruptly stepped down from OrbiMed, the managers of the Worldwide Healthcare Trust (LSE: WWH). In the 22 years in which he was lead manager, WWH achieved an annualised return of 16.8%, the highest in the investment trust sector. Since WWH continued to perform well for the next four years, it didn’t really matter. However, there followed four years of dismal performance in which the share price fell 30% and underperformed the MSCI World Health Care index before a recovery in the last six months. Meanwhile, Isaly began building a new funds business. Exome Asset Management now runs a little over $200m, with nearly half in its Worldwide Healthcare Partners (WHP) strategy, but has already built a formidable performance record. In the year…

Most people have never heard of trade-credit insurance, but without it a large segment of the global economy would cease to function. Tradecredit insurance protects firms against the risk of customers failing to pay, particularly when selling goods or services on credit with extended payment terms, such as 30 or 60 days. If the customer runs out of money, or simply refuses to pay, insurance can help cover some of the loss. This risk-absorbing buffer isn’t just a necessity for companies, but also for the economy as a whole. If one large customer goes bust and doesn’t pay its suppliers, the cascade effect on the rest of the economy can be hugely damaging. The collapse of construction group Carillion is an excellent case study. When it collapsed in 2018, it…

The “spectacular” capture of “Venezuelan leader and strongman” Nicolás Maduro by the US at the start of the month “somewhat overshadowed” the arrest at the same time of his wife, Cilia Flores (pictured), says Alonso Moleiro in El País. At her first court hearing after being snatched by US forces, she made a point of describing herself as “first lady of the Republic of Venezuela”. But she was always far more than that. Maduro used to say that she was more the “first combatant”, reflecting the fact that she was “one of the most powerful figures within Venezuelan power circles”, who wielded significant influence over the decisions of the regime. Flores was more the brains, Maduro the brawn, says Tiago Rogero in The Guardian. When the pair met in a…

2022 Château Pierre-Bise, Les Rouannières, Coteaux de Layon Beaulieu, Loire, France Younger adults are becoming increasingly health-conscious, which has led to a rise in so-called sober-curious behaviours. As a wine expert, this might be troubling, but savvy wine lovers today are drinking fewer, yet finer, bottles. This is a lifelong Jukes mantra – a couple of days “off” each week and a couple of days “on”, enjoying delicious, carefully chosen wines that make the heart sing! And while there is pressure on the global wine industry, the global dessert wine market was $35.7bn in 2023 and is projected to reach $60bn in 2033. These statistics are cause for celebration, and this ought to mean unfashionable styles such as Sauternes, muscat Beaumesde-Venise, hosts of German rieslings, Hungarian Tokaji, Vin Santo, as…

Is Europe’s 80-year-old alliance with America doomed? asks Michael Shear in The New York Times. US president Donald Trump’s threats of 25% tariffs on a slew of European nations, including the UK, for defying his will on Greenland have pushed transatlantic relations to breaking point. “To use what is essentially economic warfare with allies is unprecedented,” says Ian Lesser of the German Marshall Fund. Politicians in London and Brussels spent much political capital last year negotiating unequal tariff deals with Washington, only for Trump to rip them up over the Greenland question. Some now ask whether the US can be trusted to stick to any deal, with the European parliament freezing approval of the EU-US trade agreement this week (see our politics and briefing pages). Investors wait and see The…

Zurich Insurance’s bid for Beazley is “the latest swoop on a UK-listed company”, says Hugo Duncan in This is Money. Shares in Beazley, one of the world’s biggest specialist insurers, jumped 40% to a record peak when news of the £7.7bn bid broke. The offer was the fifth Zurich has made for Beazley since an initial approach 12 months ago, with Beazley rejecting a slightly smaller bid only a few hours before. Zurich is now approaching shareholders directly, arguing that its proposal gives them “immediate and certain cash value for their investment”. Zurich insists that its decision to go public with the bid “wasn’t a hostile act”, says Patrick Hosking in The Times. But Beazley’s board “may well disagree”: it has urged its shareholders “to take no action” while it…

Five to buy Danaher Barron’s Danaher produces medical and scientific tools, including Covid tests. The US conglomerate’s stock has barely moved for three years owing to reduced demand for diagnostics and ever-changing US trade policies. Yet this year the shares could generate “healthy” returns. Finalised tariff rules will prompt drugmakers to invest in research and development (R&D) again; there is optimism over demand for monoclonal antibodies; and the firm could resume dealmaking given a strong financial position. “It’s cheaper to bet on Danaher now than it has been in... years.” $240 Marks & Spencer This is Money Last year was an “annus horribilis” for Marks & Spencer (M&S) owing to a cyberattack that cost it “almost every penny of profit” for the first half as online sales were crippled and…

Cryptocurrency does not feature in our strategic portfolio, partly because we are not yet converts to the idea of crypto as a fundamental asset. There’s an obvious appeal to the idea of a currency that lie outside government control. Yet bitcoin and ether have significant disadvantages for transactions compared with existing payment networks. The need for a stable store of value is obvious given the growing long-term risks of currencies being debased. Yet gold still seems a superior choice in almost all ways. All this makes it difficult to decide whether crypto is truly a revolution that will find more and more mainstream applications or the ultimate expression of our bubble-prone era. Still, we certainly cannot not dismiss the way that bitcoin has soared over the past decade. Yes, much…

“My Dad died when I was seven. It meant my siblings and I all had to grow up fast. We didn’t have much money, so I was brought up to work hard and be self-reliant. I had a paper round, jobs in a bar and in a shop. It’s where my work ethic comes from.” Chef Angela Hartnett (pictured), quoted in The Times “Some of us drink Champagne in the fast lane, and some of us eat our sandwiches by the loose chippings on the A597.” Victoria Wood, quoted in The Mail on Sunday “The most ineffective workers are systematically moved to the place where they can do the least damage: management.” The late Dilbert cartoonist Scott Adams, quoted in The Washington Post “In New York [flops happen] when the…

collabfund.substack.com Nothing is worse than getting what you want, but not what you need, they say, says Morgan Housel, author of The Art of Spending Money. If you want money and you’re lucky enough to get it, for example, you might then realise that what you needed was not money, but “family, friends, health, being part of something bigger than yourself”. Can money buy happiness? Yes. But it’s more complicated than people think. Money can help you acquire a better life if you know how to use it wisely. But the poor can easily be better at that than the rich. Someone who saves diligently their entire life may find they can’t bring themselves to spend it in retirement because saving has become a habit. Spending wisely is thus an…

Palace Capital’s largest shareholder is calling for the £42m property trust to replace executive chair Steven Owen unless he slashes his pay and agrees to complete its ongoing wind-down for a total fee of £40,000. Lakestreet Capital Partners, which holds a 22.5% stake, says that Owen is receiving around £200,000 per year and up to £720,000 this year including share incentives, which it calls “wholly unacceptable”. It proposes to replace Owen with its two founders at an upcoming general meeting. Palace says the criticisms are “inaccurate and misleading” and do not reflect progress under Owen, who has been overseeing a sale of the trust’s assets since mid-2022 when shareholders rejected a new ESG-focused strategy and opted for a managed wind-down.…

“China’s giant internet platform Tencent offers gaming, digital advertising and cloud services” Emerging markets came into focus over the course of 2025 amid a volatile global backdrop. Heightened geopolitical tensions and uncertainty over US trade policy caused periodic bouts of weakness, as investors assessed the potential impact of tariffs on global trade and growth. However, these concerns also contributed to a weakening of the US dollar, a dynamic that has tended to be supportive for emerging markets by easing financial pressures and allowing for more flexible policy. This trend was reinforced as some investors began to reassess the risks of over-concentration in US assets and diversified more actively into other markets. In this environment, opportunities across emerging markets have remained uneven and recovery has played out differently by country and…

After my first couple of visits to the Greek island of Santorini, I had assumed most of the other Greek islands would be quite similar. So, I was happy to learn on subsequent visits to the wider Cyclades island group that I had, in fact, over 200 opportunities to be surprised. I travelled to Folegandros on my last trip, which is one of the lesser-known islands in the southern Cyclades. Folegandros doesn’t have an airport, which means we had to land in bustling Santorini next door and catch a ferry. (You can also book a private boat transfer should you arrive at an inconvenient time.) In hindsight, this was the first indication that this island would be different. For starters, Folegandros has a more rugged and dramatic landscape than many…

How to Own the World Before You’re 30 Andrew CraigJohn Murray Business, £16.99 The shelves are not short of books on investment and personal finance. The problem is that most of them are aimed at those in their 30s, 40s, or older. By that time investment and spending habits may have become set in stone, and the extent to which you may need to sacrifice outgoings to get your finances back on track will be much greater than if you had started out down the correct path earlier in life. Andrew Craig has therefore taken his bestselling book on investment and produced a revised version aimed at readers in their 20s, subtitled “A Plain English Guide to Investing Early for your Future Wealth and Happiness”. The book is divided into…

“After a rocky 2025 [for UK assets] the early days of the new year hint at a change in attitude… With [inflation] finally having dipped and major fiscal announcements deemed unlikely until the end of the year, the focus is on potential positive catalysts. Goldman Sachs has gone as far as predicting that ten-year gilt yields (which move inversely to prices) will drop from 4.5% to 4% this year. The drivers of this improved sentiment? First… the belief that the BoE will cut rates more than expected… Markets are currently pricing in two UK cuts this year, and the chances of at least one more are on the increase…most speculative, is the suggestion that the unsavoury notion of a ‘moron premium’, coined by TS Lombard economist Dario Perkins in 2022…

Shares in Taiwan Semiconductor Manufacturing Company (TSMC) rose 3% after the group said that it would increase capital spending “steeply” over the coming three years to feed “sustained demand” for AI chips, says Kathrin Hille in the Financial Times. TSMC expects revenues from AI chips to rise 55% a year between 2026 and 2029, ten percentage points higher than last year’s forecast. It also raised its five-year forecast for overall sales to 2029 from 20% to 25% or higher. This bullish outlook comes after the Taiwanese company reported a record TWD505.7bn (£11.9bn) in net profit for the fourth quarter of 2025 and beat its own profitability guidance with a 62.3% gross margin. TSMC is “typically cautious” on capacity given the industry’s “boom-and-bust cycles”, says Hargreaves Lansdown’s Matt Britzman, so this…

German biotechnology group BioNTech was one of the main winners of the pandemic thanks to its Covid vaccine, says WirtschaftsWoche. Revenue from the vaccine has slid by 90% in the past few years, but the group still has €14.4bn of cash set aside. It has invested it wisely, strengthening its position in research into mRNA and reorientating the company towards cancer treatments. BioNTech is due to launch its first cancer drug onto the market this year; it is designed to extend breast-cancer patients’ lifespans. There are 20 treatments in the pipeline, many of which should reach stage three, the final stage of clinical trials, by the end of the year.…

Britain’s fabled “special relationship” has come under increasing strain this week, with Donald Trump criticising UK policies on immigration and green energy as well as accusing Britain of “weakness” and “stupidity” over the Chagos Islands deal, say George Parker and Lucy Fisher in the Financial Times. Meanwhile, Keir Starmer “turned his back” on Trump’s proposed “board of peace” in Gaza and green-lighted a Chinese “super-embassy” in London, dubbed a “colossal spy hub” by shadow foreign secretary Priti Patel, ahead of a visit to Beijing next week, which will make him the first British PM to visit China since 2018. Starmer’s fear of offending “Mad King Don” is understandable, says Matt Widdowson in People’s World. In 2023, US firms held more than $1trn in direct investment in the UK. Our future…

A total of £872bn is held in Britain’s Isa accounts, with almost £100bn of that added in the last year alone. I would hazard a guess that almost every subscriber to this magazine has one. Within an Isa, your money is completely free of income and capital-gains taxes, and unlike with pensions there is flexibility over when you can take it out. Isas have become central to the way the British save and invest. With a £20,000 annual limit, it soaks up most of the spare money people have to put aside. Now, they are starting to come under sustained attack. In the last Budget, chancellor Rachel Reeves reduced the amount that could be put into a cash Isa to £12,000 a year as of April 2027. There are reports…

When most of us put money in the stockmarket, we go long – buying shares that we believe will go up. Short-sellers do the opposite – they aim to profit from a share price falling. A short-seller borrows the shares from someone who already owns them and sells them in the open market. If the price falls, the short-seller buys the shares back at the lower price, returns them to the lender and pockets the profit. So, for example, say you want to “short” shares in troubled high-street chain Beta Retail, which currently trades at £1 a share. You borrow 10,000 shares from an index fund (which owns them because it simply tracks the underlying index) in return for a small fee. You then sell them. So you now have…

thedailyeconomy.org China is using its near-monopoly in the production of rare-earth metals to strong-arm rivals, including the US, says Walter Donway. But this dependence on China does not arise because the metals are scarce, nor because China alone possesses the technical capacity. It arose because China was willing to accept the costs of production, where other countries were not. China’s monopoly is sustained not by “insurmountable efficiencies”, but by differences in politics and regulation, and that is “inherently unstable”. It will persist only so long as “the costs of entry exceed the perceived risks of dependence”. If that balance shifts, the monopoly will erode. China’s own actions are accelerating that shift. Export restrictions raise prices, which makes alternative sources of supply economically viable. Unreliable supply makes diversification valuable. Strategic risk…

● The Serious Fraud Office (SFO) has arrested six people as part of a £300m bribery and fraud investigation into Home Reit, the suspended social-housing investor. Home Reit listed in London in 2020 and raised £850m in three years to invest in housing for vulnerable people. However, its shares plunged after a 2022 short-seller report raised concerns about property valuations and nonpaying tenants. The shares were suspended from trading in January 2023, its manager was replaced in May 2023 and the fund began winding down a year later. In November, it agreed to sell 82% of its portfolio for £123m. ● In other Reit news, Picton Property Income has launched a strategic review and says it is open to a sale or a merger. The mainly logistics-focused Reit has been…

Surviving Rome The Economic Lives of the Ninety Percent Kim BowesPrinceton University Press, £35 Most histories of ancient Rome have focused on those at the very top: the emperors, generals, philosophers and wealthiest merchants. Much less has been said about what life was like for the rest of Roman society, which constituted the vast majority of the population. This is starting to change thanks to the work of economic historians and the archaeological evidence produced during the building of motorways, railways and other developments in the Italian countryside. Here, Kim Bowes of the University of Pennsylvania surveys the latest research and seeks to fill the gaps in our knowledge of the period. The old idea that most Romans who were not part of the elite must have been self-sufficient subsistence…