News & Insight • Weekly Newsletters

09 May 2025 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• The Bank of England cut interest rates from 4.5% to 4.25% - the lowest rate since May 2023, but the nine-person committee was divided: five wanted the cut to 4.25%, two wanted a 50bps cut to 4%, while two wanted no change.
• UK – US trade deal was announced, keeping tariffs at 10%.
• Friedrich Merz was voted in as the new Chancellor of Germany but only after a second round of voting. The initial vote in the German parliament to approve Merz as Chancellor failed to reach the initial 316 required votes in what is usually a formality and was the first time since World War II that an incoming Chancellor had failed to secure enough support in the first round of voting.
• The new Prime Minister Carney reiterated to President Trump that Canada is “not for sale”
• President Trump signed a proclamation that he would place a 100% tariff on “any and all Movies coming into our Country that are produced in Foreign Lands” while declaring that films produced outside the US are a “National Security threat.”
• Treasury Secretary Scott Bessent stated that his department was on the “warning track” towards exhausting its capacity to stay within the federal debt limit. When asked for the so called “x-date”, when the government would no longer be able to pay its bills, Bessent noted that “we will share with Congress when we believe we are approaching that date”. Analysts have estimated that the “x-date” is likely to be between August and October, before which Congress will need to increase the debt limit.

COMPANY NEWS

• Palantir shares closed down 12% after reporting results that were better than expected with revenue rising 39% to $883.9m. Operating margins of 44% were better than forecast as the company guided to 2Q revenue and operating profit that were above expectations with full year guidance increased for revenue, profits and free cash flow. Management commented that they were in the middle of a “tectonic shift in the adoption of our software, particularly in the US” where revenue was up 55% as analysts noted that while results were strong, they were not enough to justify the stock’s valuation
• Disney shares rose 10% after reporting very good second quarter results from Saudi Arabia – the venue of their next park. Revenue rose 7% to $23.62bn, with all divisions performing better than forecast. Like the Netflix results recently, streaming was strong, Disney+ subs rose slightly to 126m. Guidance was also excellent.
• Novo Nordisk closed up on the week after reporting first quarter results and cutting guidance – but the guidance cut was seen in a positive way. Earnings were slightly better than expected with sales of DKK78.09bn below consensus. In what was a reasonably anticipated move, the company reduced its full year outlook, now seeing sales growth of 17%, down from 20% and below the 18.6% expected with operating profit forecast to now grow 20%, down from 23% as management cited lower than planned GLP-1 penetration.
• Renishaw beat expectations across the board, leading the shares 18% higher. Group revenue grew 3% to £522.1m for the 9-month period and adjusted profit before tax rose slightly to £87.5m. Revenue in Q3 improved 5% £180.7m driven by good growth in machine tool probe sales. There was also solid growth in demand for encoders from tech equipment builders, whilst it has decided to close the loss-making drug delivery aspect of the Neurological business
• The boards of LondonMetric and Urban Logistics reached an agreement on the terms of a recommended cash and share offer for £698.9m
• NEXT continues to operate very well as trading full price sales grew 11.4% which was materially ahead of its sales guidance of 6.5%. Online UK grew 8.9% with UK Retail up 5.2%, both beating prior guidance. Online International was up 29.6% versus guidance 22%. Management believes the over-performance is due to more seasonal weather and potentially some sales pull forward and so maintained current guidance

TECH NEWS

Shares in Alphabet declined over 7.5% and Apple closed down just over 1% following reports that Apple was considering developing its own AI search engine for its products.

Apple’s senior VP of Services Eddy Cue gave evidence at the hearing where the US is trying to state it behaves in a monopolistic way. He believed AI search providers would eventually replace standard search engines like Google, and that Apple would bring those options to Safari in the future. Cue mentioned that Apple had held discussions with Perplexity AI and was looking at other providers such as Grok, OpenAI, Deep Seek and Anthropic.

EU POWER

Following an announcement that the EU was set to propose banning Russian gas imports by the end of 2027, it was interesting to note some energy related news flow.

An answer to the new power required has been the deployment of wind farms around the Continent. One proponent of this build has been the Danish company Orsted, who announced first quarter results that were OK. Revenue of DKK20.71bn was in line with consensus estimates, whereas earnings in the Offshore Wind division were lower than forecast. In a blow to Ed Miliband, the Secretary of State for Energy, the company stated that it would discontinue the Hornsea 4 offshore wind project in the UK due to the “combination of increased supply chain costs, higher interest rates, and increased execution risk” which had “deteriorated the value creation of the project”.

Continuing with the green theme, there were same-coloured shoots in the shares of ITM Power as it announced it has been selected by Uniper to supply at least 120MW of electrolyser equipment. Interestingly this deal did not include Linde and also departs from contracts typically announced that tend to be below 50MW. They also announced two further deals, as contract activity continues to build momentum.

European waste and utility giant, Veolia released Q1 results reporting Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) at €1.695bn, a +5.5% increase on the first quarter last year and ahead of consensus (€1.68bn).

THE WEEK IN HISTORY

1886: Coca-Cola, the world’s most popular soft drink, was created on May 8, by pharmacist John Stith Pemberton in Atlanta, Georgia. Originally developed as a coca-based tonic for ailments, containing cocaine, its formula evolved when Atlanta banned alcohol, leading Pemberton to mix a non-alcoholic syrup in his backyard, which became Coca-Cola.

1752: The first US fire insurance policy is issued in Philadelphia