Blog

The infoshot to help kick-start your week

Friendship with Epstein haunts Trump as US markets break records

As Donald Trump’s friendship with Jeffrey Epstein came back to haunt him and drive a rift between him, prominent MAGA loyalists and his base, the S&P and NASDAQ reached record highs.  

Major banks, including JP Morgan, Morgan Stanley, Citigroup, PNC and Bank of America reported better than expected earnings for Q2. The common consensus from the US banks seems to be that corporate clients have moved on from Trump’s tariffs and, according to Morgan Stanley CEO, Ted Pick, “boardrooms appear more accepting of ongoing uncertainty broadly.” Despite US consumer debt currently standing at $17.57tn, the banks praised the ‘health’ of US consumers as they deal with inflation, high interest rates and increased levels of economic uncertainty.  

Big-name consumer facing firms, like, PepsiCo and Netflix also beat forecasts to help send the S&P to 6,296 points at close of play on Friday.  

Outside traditional markets, lawmakers passed the US’s first major cryptocurrency legislation. The so-called GENUIS Act sets up a regulatory regime for stablecoins. The price of bitcoin hit a record high on the back of the news reaching $120,000.  

UK suffers unexpected inflation jump and unemployment hits four year high

According to the Office for National Statistics (ONS), the UK inflation rate for the year to June rose from 3.4% to 3.6%.  

The rise is higher than many economists expected. Motor fuel costs and increasing food prices were behind this month’s rise. Fuel prices did fall slightly but the decrease was much smaller than last year. Early in June oil prices spiked due to Israeli and US strikes on Iran before falling off later in the month. Food and non-alcoholic drink prices went up 4.5% in the year to June. Everyday essentials like bread, cereals, milk and eggs all rose.  

Suren Thiru, Economics Director at the Institute for Charted Accountants in England and Wales (ICAEW), said the latest rise may signal a “slight summer surge” in inflation and warned about “skyrocketing” business costs and global turbulence sending inflation higher by the autumn.   

The Bank of England (BoE) is still expected to cut interest rates this summer as it tries to hold inflation at its target of 2%. Andrew Bailey, Governor of the BoE, has made it clear that larger cuts could happen if the jobs market continues to slow down. Last week’s unemployment figures from the ONS showed the UK unemployment rate had risen to 4.7% its highest in four years – all while the number of vacancies carries on tumbling. If you exclude the pandemic, the number of job vacancies in the UK is now at its lowest in ten years.  

Landmarks in AI usage and Nvidia gets permission to sell AI chips to China again

For the first time, Netflix used AI in one of its TV shows. Argentinian sci-fi series El Eternauta used AI tools to generate visual footage during a scene involving a collapsing building. According to Co-CEO Ted Sarandos, the AI-assisted scene was completed ten times faster and at a significantly lower cost than using traditional visual effects methods.  

Open AI also launched the personal assistant AI, ChatGPT Agent last week. The new model can perform real-world tasks autonomously, like booking your dinner restaurant for the evening or organising shopping and connect directly to your email accounts to find files and help manage your online calendar. Pressure to monetise AI products like this is growing and OpenAI CEO, Sam Altman, has previously discussed adding a 2% fee on any sales generated through AI agents that are powered by this kind of “deep research” software.  

Chipmaking giant Nvidia said it plans to resume sales of its H20 AI chips to China following a successful meeting between Trump and their CEO, Jensen Huang. They have been given assurances from US government officials that licences will be approved and that they’ll be allowed to start delivering again soon.