FT : Donald Trump’s investment deals are a mirage

Donald Trump’s investment deals are a mirage
Dubious pledges and uncertainty cast a shadow over the president’s manufacturing boom

If there is one thing US President Donald Trump obsesses over even more than the size of crowds at his rallies, it is the level of investment pledges he has secured from companies and countries.

The White House maintains a running list of the president’s second-term deals on a webpage entitled “Trump effect”. The commander-in-chief recently claimed that commitments had already exceeded $10tn, supposedly proving that his plans to spark a tariff-driven manufacturing boom in America will pay off. This week, I stress-test his claims.

The White House’s list is undoubtedly impressive. However, the $10tn figure — which Trump cited early last month — is misleading.

For starters, in mid-May, Goldman Sachs estimated that companies had announced plans to invest over $2tn across multiple years, with foreign governments pledging in excess of $4tn. That comes to a still chunky number of at least $6tn — roughly 20 per cent of the US economy. (Further commitments have also been made since Goldman’s analysis.)

The cumulative value of total greenfield foreign direct investment announcements — which captures capital earmarked for new facilities and operations — is also already well ahead of where it was at the equivalent point in both Trump’s first term and Joe Biden’s administration, according to data from fDi Markets, an FT-owned database.

But how much of all this will actually happen?


First, pledges are, of course, not the same as realised investments. It is typical for companies and countries to announce projects early in a president’s term to curry favour with their administration.

Looking at promises made during Trump’s first term, Goldman Sachs estimates that 80 per cent of investment commitments actually materialised. Though solid, that did include some high-profile projects falling short of their goals. Alibaba scrapped a plan unveiled in January 2017 that was slated to create 1mn jobs. Foxconn watered down a manufacturing investment plan in Wisconsin from $10bn to only $672mn.

The incentive to embellish investment plans is even stronger in Trump’s second term, given his broad tariff threats. “The US’s partners have a record going back to the 1980s of allaying trade tensions and US concerns by committing direct investment,” notes Matt Gertken, a chief strategist at BCA Research. “After reviewing the major items on the White House list, we find that many of them are indeed hyperbolic and meant for political effect.”

This is supported by data from fDi Markets. The group also tracks signals that a foreign company may be considering investment, such as a new investment strategy. It finds that signals to invest in the US, as a share of all global signals made by businesses, have jumped to their highest in well over a decade so far this year.

This suggests an 80 per cent conversion rate is highly unlikely.


But the White House’s tally is deceptive in other ways too, according to analysis by the Cato Institute. “The list includes previously planned projects that are already under way,” says Scott Lincicome, vice-president at the think-tank. “Other items have classic wiggle room, such as ambiguous timeframes, or are conditioned on the economic environment.”

Some of the larger commitments are indeed curious. Apple has promised to invest $500bn in the US over the next four years. Yet it only spent $10bn on capital expenditure and $31.4bn on research and development globally last year, notes Goldman Sachs. Nvidia’s $500bn commitment is similarly dubious.

For companies, the chasm between promised and current investment suggests the headline-grabbing figures could be bolstered by partnerships, acquisitions or costs of production. As for promises from countries, both Saudi Arabia and Qatar’s “deals” includes purchasing US goods, which boosts American exports, not investment.

This raises a broader point: big investment numbers do not necessarily translate into GDP or job gains.


Tellingly, the investment announcements have not driven significant upgrades to capital expenditure expectations at a company level. Close to 70 per cent of Goldman Sachs’ equity analysts who cover companies with recent investment promises say the pledges mostly overlap with prior plans.

“The consensus forecasts for investment and economic growth have not changed in response to these announcements”, says Mark Zandi, chief economist at Moody’s Analytics. “If anything, the fundamental drivers of investment have weakened considerably because of the global trade war.”

Whether they are genuinely new investments or not, many projects are likely to be scuppered because of uncertainty. Indeed, BCA Research’s indicator of business investment intentions across the US is in recessionary territory.

Indicatively, America’s construction spending boom, linked to the Inflation Reduction Act and the Chips and Science Act, appears to have peaked. Trump’s well-known dislike of the Biden-era initiatives has created uncertainty around the status of their tax credits and subsidies. Investment under both programmes tapered off as the 2024 election came into close view.


The lack of clarity over tariffs in particular significantly reduces the chances of successfully pulling off any fresh building plans. Import duty rates are subject to the White House’s negotiations with America’s trade partners, and now the courts too.

Relocating manufacturing production involves substantive fixed costs, often at multiples of average gross operating surplus. Rational boardrooms will not risk years of profit by breaking ground on new facilities if tariff rates shift again and render investment less competitive. Across many industries, US production costs are significantly higher than the top three countries currently exporting to the US, according to Goldman’s analysis.

Both Trump’s sector- and countrywide levy plans matter here. For example, car manufacturers weighing up whether to jump the tariff wall need to keep tabs on levies concerning their inputs, such as steel and copper.


Beyond tariffs, there are other limiting factors. Over two-thirds of manufacturing businesses considering producing more goods in the US cite the availability of qualified labour as a significant concern, according to a recent Bank of America Global Research survey.

The administration’s broader assault on universities and research risks undermining access to high-skilled workers, while a clampdown on undocumented migrants would hit the construction labour force. Permitting processes are also notoriously slow.

And then there is Section 899, a provision in Trump’s One Big Beautiful Bill Act that would give the Treasury secretary the power to set retaliatory taxes on inbound foreign investment. The Tax Foundation estimates that over 80 per cent of current US FDI stock comes from nations covered by the legislation.

All said, the obstacles to completing any proposed factory build, product launch or hiring spree during Trump’s second term are unprecedented. And, even if projects do occur, they may not deliver the desired results.

Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, looked at consumer goods company Kimberly-Clark’s $2bn pledge last month, which he says is linked to a strategic restructuring and cost-cutting plan unveiled a year ago. “While Kimberly-Clark certainly wants to expand its US manufacturing capacity, the new facilities announced appear highly automated and will use high-skilled labour — not necessarily the blue-collar jobs Trump has been promising.”

Indeed, since production costs and labour availability are primary concerns, US reshoring is unlikely to drive significant employment. “Those companies that do end up reshoring are likely to offset associated costs via increased automation”, adds BofA Global Research.


Trump is not alone in overegging investment pledges. Most presidents do it. The Biden-Harris White House touted over $1tn in private sector commitments, even though many projects have been delayed or paused.

Yet the discrepancy between this current administration’s running list of investment announcements and what actually happens is likely to be one of the most exaggerated, given Trump’s transactional and capricious policymaking.

Net total investment could even look dire by the end of Trump’s second term, if it continues as it has started. Right now, domestic capital expenditure projects are largely on hold or cancelled. Outbound FDI projects may even pick up as companies try to avoid retaliatory measures on the US. Automakers are considering shifting to China, given its stranglehold on rare-earth magnets.

Over time, there is reason to be optimistic. For some companies and nations, announcing plans to invest in the US is a longer-term strategic play to gain exposure to its unrivalled market and technology (even if the conditions aren’t quite right now). “Some pledges suggest a desire to leverage the promise of a future upside to stave off the reality of near-term threats,” says Clayton Allen, US director at Eurasia Group. If policy stabilises, it could catalyse dormant projects.

For now, however, Trump’s investment deals are largely a mirage.

FT : Apple’s struggles to update Siri lead to investor concerns over AI strategy

Apple’s struggles to update Siri lead to investor concerns over AI strategy
iPhone-maker hit by technological challenges that have led to delays to the full rollout of its ‘Apple Intelligence’ features

Apple is struggling to deliver upgrades to its artificial intelligence voice assistant for the iPhone, with investors downbeat about the potential for major AI announcements at its flagship annual event next week.

Recently departed employees told the Financial Times that the Silicon Valley giant has been hit by challenges with updating Siri using cutting-edge large language models that can deliver more sophisticated responses to spoken prompts.

Apple has been attempting to build its own LLMs over the machine learning technology that currently powers Siri, a product already used in hundreds of millions of its bestselling devices, with the aim of creating a truly conversational assistant.

Former executives said that the process of integrating the technologies has led to bugs, an issue not faced by competitors such as OpenAI which have built generative AI-based voice assistants from scratch.

One former Apple executive said: “It was obvious that you were not going to revamp Siri by doing what executives called ‘climbing the hill’,” meaning to incrementally develop the product rather than rebuilding it from the ground up.

“It’s clear that they stumbled,” the person added.

The updates to Siri form a key part of “Apple Intelligence,” a suite of AI features announced at the company’s Worldwide Developer Conference last year and intended to boost hardware sales.

The FT reported this week that Apple’s attempt to rollout the AI features in China, powered by models made by Alibaba, is being held up by a Beijing regulator. Sensitive deals in the country involving American tech companies have come under closer scrutiny in response to US President Donald Trump’s trade war.

Repeated failures to release Apple Intelligence features that have already been announced has meant expectations are low for this year’s WWDC, which kicks off next week.

“We’re at the point where investors already know what the good news potentially is, and it’s about: let’s first have you deliver what you promised last year,” says Samik Chatterjee at JPMorgan. 

The AI struggles have weighed on the tech giant’s stock. It has been worst-performing of the so-called Magnificent 7 tech stocks in 2025, down around 18 per cent since the start of the year and below the tech-heavy Nasdaq which is largely flat. 


Trump’s tariffs, competitive threats in China, and legal pressure on Apple’s high-margin services business have also led to investor concerns about its long-term growth.

At the core of Apple’s AI troubles is Siri, its legacy voice assistant which is seen as critical to unlocking true “agentic” abilities on the iPhone and other Apple devices.

When ChatGPT launched in late 2022, “the way companies were doing conversational interaction was changing rapidly, and it was clear Siri was coming up short,” said another former senior Apple employee who worked on the technology ahead of the launch.

The person added that they were “surprised” to see features announced last year that were ultimately “not going to make it” in time for Apple Intelligence’s initial release.

As well as operating much larger and more powerful models, the likes of OpenAI, Google and Perplexity all have launched voice assistants that are widely viewed as smarter than Apple’s.

The iPhone-maker’s answer was to focus last year’s annual developer conference on its own AI push, where it teased an AI-upgraded assistant able to read the user’s screen, draw on their contextual information and take actions within their apps.

A group of AI features such as writing aids, image and emoji generation and camera-based search have already hit the market.

The heralded changes to Siri are yet to be released, however. Chief executive Tim Cook recently admitted the technology did not meet the company’s “high quality bar” and was “taking a bit longer than we thought.”


The delays led to Apple pulling TV ads featuring The Last of Us star Bella Ramsey that promoted the new Siri update. The company drew a number of false advertising lawsuits from consumers.

The current delays to Siri mean that Apple is essentially three years or more away from delivering “a truly modern AI assistant, long after Google and others have integrated such tech,” Bank of America analysts wrote on Monday.

The failures have led to changes at Apple. John Giannandrea, its AI guru poached from Google in 2018, saw the Siri product division removed from his remit earlier this year and transferred to Mike Rockwell, the executive behind the Vision Pro headset.

A former Apple executive said that fragmented leadership teams led to a lack of a unified strategy around AI, made worse by an initial lack of appetite on the part of top executives to allocate a big enough budget for the build-out of the technology.

Another challenge is Apple’s focus on user privacy and security. It has prioritised running its AI features through smaller models and user data staying on the device, which former employees said adds another layer of complexity to the challenge.

This stands in contrast to larger LLMs such as those that power OpenAI’s ChatGPT, which run through the cloud on powerful servers. Apple has leaned on OpenAI by releasing ChatGPT integration with Siri.

Since then, OpenAI has signalled its own ambitions in the hardware space, with chief executive Sam Altman announcing a $6.5bn deal to acquire IO, the company founded by former Apple designer Jony Ive, who will now be creating products for a potential rival. Apple shares fell about 2 per cent on the news.

WSJ : The U.S. Economy Is Headed Toward an Uncomfortable Summer

The U.S. Economy Is Headed Toward an Uncomfortable Summer
Companies are freezing hiring and investment to deal with shifting tariff policies. ‘Even Trump doesn’t know what Trump will do next.’

Key Points
  • U.S. economy faces uncertainty because of shifting trade policies and tariffs, affecting business planning and investments.
  • Despite steady job growth and low unemployment, businesses express concerns over trade policy uncertainty.
  • Consumer spending and potential financial-market shocks are key factors determining if the U.S. economy bends or breaks.

The U.S. economy, which weathered false recession alarms in 2023 and 2024, is entering another uncomfortable summer.

Job growth held steady in May, with the economy adding 139,000 jobs. The unemployment rate has stayed in a tight range, between 4% and 4.2%, over the past year.

But there are cracks beneath the surface. Businesses are warning that constantly shifting trade policies are interfering with their ability to plan for the future, leading to hiring and investment freezes.

Policy uncertainty has unfolded against the backdrop of an economy with slower job growth and a cooling housing market. Compared with last year, the Federal Reserve is more reluctant to cut interest rates because officials are worried about new inflation risks.

John Starr, the owner of UltraSource, an importer and manufacturer of meat-processing technology in Kansas City, Mo., said he is hunkering down—no hiring, no more capital spending—until he has clarity on tariffs.

The company is waiting for suppliers in Europe to finish work on $20 million in orders it placed before 10% tariffs took effect on April 9. That means he faces a $2 million levy if tariffs stay at that level.

“How am I supposed to pay this?” said Starr, a third-generation owner of the company. “That could wipe out profits for a year.”


Whether the economy again bends, rather than breaks, turns on how the U.S. consumer handles the latest curveball—this time from President Trump’s desire to reorder America’s trading relationships and reduce reliance on imported goods. For months, the president has announced one large tariff increase after another, at times wavering from escalation to temporary resolution.

“Where this goes all depends on what Trump decides to do next, and candidly, even Trump doesn’t know what Trump will do next,” said Christopher Thornberg, founding partner at Beacon Economics in Los Angeles. “So it’s almost impossible to see where this thing is heading.”

Economists largely agree that for the U.S. economy to slide into recession, the American consumer needs to falter.

“As long as the consumer is doing OK, it’s not going to change our world,” said Ric Campo, chief executive of Camden Property Trust, a Houston-based developer and owner of 58,000 apartment homes.

Most economists think the prospects of a recession are higher than they were at the beginning of the year but lower than in April and early May, when tariffs on China had been increased by 145%.

The U.S. agreed to roll back the tariff increase to 30% last month. Most other nations face 10% tariff increases, with higher rates on dozens of countries paused until early July.

Three risks loom large.

• First, the U.S. labor market has been in an uneasy equilibrium where companies aren’t hiring but are reluctant to fire workers that they hustled to find three or four years ago. Like a beach ball that shoots skyward after being held underwater, joblessness can quickly jump once companies decide demand is too soft to keep those workers.

“It starts with one large firm. Then competitors might say, ‘Well, listen, we have to do the same,’ ” said Gregory Daco, chief economist at consulting firm EY.

Bill Hutton, president of Titan Steel, a Baltimore-based distributor and processor of mostly imported steel for products such as paint cans, said he is going to “err on the side of caution” when it comes to reducing the size of his workforce. Having worked so hard to staff up, he said, he is “very, very leery of making assumptions that, ‘Oh, we can dial up or down our workforce at a moment’s notice.’ ”

• Second, consumers could finally push back against rising costs, forcing companies to tighten their belts.

Delinquency rates on consumer debt have been on the rise for a year, raising fears that deteriorating finances for low-income borrowers could lead to a more pronounced slowdown in consumer spending.

For the housing market, the spring sales season has been a bust. The U.S. market now has nearly 500,000 more sellers than buyers, according to real-estate brokerage Redfin. That is the largest gap since its tally began in 2013. Home prices could fall 1% this year, said Redfin economist Chen Zhao.

“The market has been at rock bottom for the last 2½ years and there was some hope that we’d get a little bit of a turnaround this year. And it’s just actually been worse than expected,” said Zhao.


• Third, financial-market shocks or abrupt sentiment changes remain a wild card. The Fed reduced short-term interest rates by 1 percentage point last year, providing a measure of relief to borrowers with credit cards or variable-rate bank loans.

Officials hit pause on rate cuts this year amid concerns that tariffs might create new inflation risks. Longer-term borrowing rates, which aren’t set by the Fed and which influence many borrowing costs such as mortgages, have been elevated as investors around the world pay more attention to how governments will finance rising deficits in the years to come.

Any sudden and sustained rise in borrowing costs could spill over to the stock market, hurting companies’ earnings and making stocks less attractive. Lofty asset prices have supported business investment and high-income consumer spending.

For many companies, the uncertainty triggered by Trump’s sudden and seemingly arbitrary announcements of tariffs has upended the outlook for sales this year.

Starr, at UltraSource, orders equipment that has a lead time measured in months. Because those products are made to each customer’s specifications, Starr can’t resell them if clients refuse to eat the cost of the tariff.

“I have to take action now,” Starr said. “We’re going to be very careful about any cash expenditure just because we need that cash to pay the tariff.”

White House officials have said they are confident the president’s approach will lead to better trading relationships. “In order to get another country to eat the burden of the tariffs, we have to have a credible threat to move our supply chains across the border…It can take some time to make that threat credible,” Stephen Miran, chairman of the president’s Council of Economic Advisers, said in an interview.

Miran said he couldn’t produce a forecast for inflation this year because “we’re still waiting for policy details to be fully fleshed out right now.” He also said businesses would benefit from a tax-cut package moving through Congress.

Starr, who said he has already racked up $300,000 in unanticipated expenses because of tariffs, said the prospect of business tax cuts is of little use if his profits are zeroed out from tariffs. He said he doesn’t object to paying a 20% tariff on prospective orders as long as he has certainty the duty won’t suddenly change after he has negotiated purchase orders with customers and vendors.

Steel and aluminum tariffs, which Trump this past week raised to 50% from 25%, could boost domestic metal producers while squeezing profits for carmakers, can manufacturers, and companies such as Titan Steel. Hutton, the steel company’s president, said customers have been understanding about accepting some price increases because his competitors have also had to raise prices.

“It feels like we’re muddling through,” he said. “Nobody—neither us, nor our customers, nor our overseas supplier—is in any position to do any long-term thinking.”

The Fed aggressively raised rates in 2022 and 2023 to combat inflation. But the U.S. economy was insulated because many households and businesses had already refinanced at ultralow rates during the pandemic. Later, the economy benefited from an unexpected boom in capital spending on artificial intelligence.

Any pullback could be abrupt. “It’s very rare that you have a technology shock of this sort that doesn’t lead to overbuilding,” said Jason Thomas, chief economist at private-equity manager Carlyle Group.

Some companies have held back from raising prices now until they can see how tariffs settle out. “They just said, ‘We cannot take the risk of souring relations with our customers, with our suppliers, over a policy that in two months’ time may not even be in place,’” Thomas said.

He expects businesses eventually will have to pass along some cost increases, however, because they will have depleted inventories acquired at pretariff rates.

One tailwind—recent declines in energy prices—could help offset some of the inflationary impulses from tariffs.

While the president often gets undue credit for what goes right or wrong in the economy, this time could be an exception.

“The economy has a lot of momentum, and so if Trump truly backs off on tariffs and just calms down, you could see this expansion going another two, three years, honestly,” said Thornberg of Beacon Economics. “Then again, if he keeps rocking the boat, you can blow it up by the beginning of next year.”

FT : Donald Trump and Elon Musk’s allies urge reconciliation after damaging spli

Donald Trump and Elon Musk’s allies urge reconciliation after damaging split
Tech industry fears commercial and political damage from breakdown in relationship between Tesla boss and US president

Allies of Donald Trump and Elon Musk have urged the US president and his billionaire backer to repair their relationship, seeking to limit the political and commercial damage from this week’s spectacular split.

The fissure between the powerful pair, ostensibly over the president’s signature tax bill, threatens to derail the White House’s legislative agenda and wreck a hard-won alliance between Silicon Valley and Washington.

“It is unfortunate . . . I hope they will come back together,” Texas Senator Ted Cruz, who was in the Oval Office when Trump slammed Musk, said on Friday. “A lot of conservatives are feeling like this is not good, let’s hug and make up.”

The Tesla chief executive, who had spent Thursday launching more explosive attacks on Trump, seemed to be open to a détente, responding positively to hedge fund manager Bill Ackman, who urged the duo to “make peace for the benefit of our great country”.

Trump on Friday claimed he was “not even thinking about Elon”, before adding on CNN: “The poor guy’s got a problem . . . I won’t be speaking to him for a while I guess, but I wish him well.”

He repeated that line on Saturday, telling NBC he had no intention of mending their relationship. He warned of “serious consequences” if Musk funded candidates to run against Republicans.

Tech figures who backed the administration hoping it would usher in an era of tax cuts and deregulation have been racing to contain the quarrel, with limited success.

“Elon isn’t taking calls from anyone,” one Silicon Valley financier and big donor to Republican candidates told the Financial Times. “Not from people who have billions invested in his companies . . . The Valley is losing their shit.”

Attempts to get Trump to reconcile with his former “first buddy” were set back on Friday morning by news the president planned to sell or give away the Tesla he had bought in March as a show of support for Musk. The White House also dismissed reports of a conciliatory phone call between the two men.

Billionaire Tim Draper, who invested in Tesla and SpaceX, urged Trump and Musk to reunite to save the so-called Department of Government Efficiency, an initiative that was backed by many in the tech world and staffed by Silicon Valley executives.

“They seemed to be making good progress together,” Draper told the FT. “My advice: Don’t throw the baby out with the bath water.”

However, cracks in Silicon Valley and Washington’s marriage of convenience had been appearing for weeks, particularly over Trump’s tax bill that irked Musk. Deficit hawks have balked at the legislation adding trillions to the US debt pile, while more socially progressive tech figures have bridled at proposed cuts to entitlement programmes such as Medicaid.

“I am fully for pursuing the elimination of waste and fraud,” said Jon McNeill, a former Tesla president who worked alongside Musk and runs start-up incubator DVx Ventures. “But at the same time, I don’t want a tax break so badly as to make the most vulnerable suffer. And from what I’m hearing, a lot of my peers feel the same way.”

Musk’s allies aligned with Trump fear several Silicon Valley figures who followed him into government could find their roles are in peril.

The sudden deselection of Jared Isaacman, a tech founder and friend of Musk’s who had been nominated to lead Nasa, was the start of an expected “purge”, said one person close to the administration.

Among those considered to be at risk were crypto and artificial intelligence tsar David Sacks, policy adviser Sriram Krishnan, and Michael Grimes, Musk’s former banker at Morgan Stanley who is now an official at the Department of Commerce.

Sacks, who is also one of the co-hosts of the All-In podcast, a sounding board for the Trump-aligned tech world, was “shell-shocked”, said one person familiar with the matter, and needed to be protected from public scrutiny until things calmed down.

Usually a frequent poster on social media, Sacks has remained silent since the Musk-Trump relationship imploded. He did not immediately respond to a request for comment.

Other prominent tech figures have been debating whether reconciliation is possible and, if not, what life beyond the break-up would look like.

Ryan Selkis, founder of a crypto platform who became a prominent Trump backer, told the FT: “Elon will be back in the fold in a matter of weeks, but it will be a chastened Elon.”

But Delian Asparouhov, a space tech founder who co-runs the Hill & Valley Forum, which links Silicon Valley and Washington, said: “I don’t think there is going to be a de-escalation here.”

He told tech news site TBPN smaller space companies that work with Musk’s SpaceX could encounter “more resistance” from the White House.

Others bemoaned the souring of the tech community’s Trump bet. “Maybe Silicon Valley got played by Trump. He got what he wanted,” said one west coast venture capital founder, citing Musk’s $250mn donation to Trump’s campaign.

The person lamented the economic volatility — caused by tariffs and Trump’s unpredictability — during a presidency that they had been promised would be a boon to business. “We’re all experiencing a liquidity crunch,” they said. “We need public markets to open.”

The public bust-up between Trump and his benefactor could open the door for others in Silicon Valley to become tech’s de facto ambassadors in Washington, especially Musk’s arch-rival, OpenAI’s Sam Altman.

“Tech is not represented by one person,” an investor in Musk’s companies said. “This doesn’t end because of one person, even if he’s the most prominent person in the world.”

FT : Private equity firms overhaul exit strategies as IPO market slams shut

Private equity firms overhaul exit strategies as IPO market slams shut
Executives prioritising break-ups or continuation funds as trade war kills off potential floats

Private equity groups are overhauling their exit strategies after accepting that a years-long downturn in initial public offerings is unlikely to end soon.

Buyout executives at the industry’s annual European conference this week said they were prioritising other options for exiting their investments, including breaking up businesses to sell them off in smaller parts or selling companies to themselves via “continuation funds”.

“I can’t remember in my 20 years of growth equity investing, not having an IPO window open for this kind of long period of time,” said General Atlantic co-president Gabriel Caillaux at the Berlin SuperReturn event. “That is obviously calling us to rethink not strategy, but some tactical aspects.”

Buyout firms have a record backlog of ageing and unsold assets, as higher interest rates and market turmoil have made it harder to float companies or sell at acceptable prices, putting pressure on them to find other ways to return cash to their investors.

The volume of private equity-backed IPOs has slumped since the frenzy of 2021, with only nine across Europe and the US this year compared with 116 in the same period in 2021, according to Dealogic.

The head of private equity at a large international firm said IPOs now ranked behind break-ups and minority stake sales as an exit option.

“The IPO is number three on the list these days,” they said.

Permira in January sold a minority stake in its €2.2bn luxury sneaker company Golden Goose after abandoning an IPO. EQT, which was last year reported to be considering a listing for its schools business Nord Anglia, eventually cashed out its older fund by selling to a consortium that included one of its newer funds.

Sellers were increasingly securing sales by offering buyers greater protection against risks, including through earnouts — where part of the price is linked to future performance, the private equity executive said. “The toolbox is really being opened now,” they added.

Executives had hoped the election of US President Donald Trump would lead to a revival in IPOs, but instead his policy volatility has closed the capital markets to most potential issuers.

In March, Permira and Hellman & Friedman postponed a planned IPO of US software group Genesys, while Bain Capital and Cinven did the same with their listing of German pharmaceuticals company Stada.

The head of private equity at a large global asset manager said that in the wake of Trump’s April 2 tariff announcements, listings were “gone”.

A top dealmaker at another of the world’s largest private capital firms said “the only thing that’s worse” than the current IPO market was “the perception of how strong it was supposed to be compared to how it’s turned out”.

Structural changes in the markets were also making it harder to list businesses, they added, including the rise of passive exchange traded funds that do not typically buy IPOs.

Daniel Lopez-Cruz, head of private equity at Investcorp, said the IPO market “for all intents and purposes is closed for private equity companies”.

The secondary market — where buyout firms sell assets to themselves with so-called continuation funds, or investors in private equity funds sell on their stakes in those funds — had become “a great help”, he said.

Continuation vehicles have soared in popularity in recent years as a means to return cash to fund investors. Private capital firms sold $75bn of assets on the secondary market last year, up 44 per cent from the previous year, according to Jefferies. The vast majority of that went into continuation funds.

Some executives remained positive about the possibility of IPOs making a comeback, however.

“Things can change very, very fast,” said the head of a major European buyout firm. “We have businesses in our pipeline that we’re considering IPOs for in nine or 12 months. It’s about being well prepared and going for it when you can.”

SCMP : Baijiu blues: China’s Gen Z rewriting liquor industry as tastes change, c

Baijiu blues: China’s Gen Z rewriting liquor industry as tastes change, consumption dips
Young Chinese are driving a shift from the traditional white spirit to fruity, lower-alcohol beverages, in a sign of as evolving lifestyles

Selecting which crops to grow each season can be a make-or-break decision for farmers. And in the ancient Chinese town of Baisha, famous for its liquor production, more and more are sowing seeds of change in a bid to capitalise on the evolving tastes of consumers.

Located in the southwestern megacity of Chongqing and home to the distillery of Chinese baijiu distilled-liquor brand Jiang Xiao Bai, the town is seeing its farmland increasingly being used to grow green plums instead of sorghum grain.

Both are key ingredients in producing certain spirits, but unlike sorghum, which is primarily used in traditional fiery baijiu distillation, green plums are used to produce much lighter and fruitier wine.

“Innovative low-alcohol drinks mark a very clear market trend in China,” said Fan Li, PR director of Bottle Planet, which owns Jiang Xiao Bai. “We are embracing changes in the market.”

To ensure their legacy continues, more Chinese liquor brands are innovating their products, with an increased focus on low-alcohol, fruit-flavoured beverages instead of grain-based baijiu, as they seek to expand their consumer base from predominantly middle-aged men to other demographics such as young urban women.

Industry insiders say the younger generation could upend China’s alcohol market, where baijiu, with around 50 per cent alcohol content, has long been the mainstream tipple of choice. In a shift from traditional alcohol consumption, which revolves around social rituals, they say the younger generation is prioritising self-indulgent experiences – with drinking occasions maturing from networking obligations to emotional companionship.

According to a 2022 report from consulting firm Ries, China had 490 million potential young alcohol consumers, and beverages with around 10 per cent alcohol were the most favoured among them.

Thus, the term “new alcoholic beverages” has been trending in the country in recent years, referring to innovative low-alcohol drinks that combine beverage flavours with a mild tipsy experience, including pre-mixed cocktails, fruit wines, infused liquors, sparkling alcoholic drinks, and fruit beers.

Meanwhile, compared with more expensive traditional baijiu, lower prices – usually around 100 yuan (US$14) per bottle – are also appealing to young consumers, according to industry insiders.

China’s low-alcohol beverage market will exceed 74 billion yuan (US$10.3 billion) in 2025, with an annual compound growth rate of 25 per cent, said Wang Qi, executive chairman of the China Alcoholic Drinks Association, according to Chinese media National Business Daily.

Bottle Planet’s plum wine brand, Meijian, has played a leading role in this market since its launch in 2019, Fan said.

In major Chinese cities, the sales of Meijian increased last year by more than 30 per cent, on average, according to the company.

“The revenue of the entire company grew by 16 per cent last year, with the main growth driver being Meijian green plum liqueur,” Fan said.

In contrast, and aligning with an overall consumption decline across China that has led to weakened purchasing power and waning demand for business networking, the growth of traditional baijiu sales has been slowing in recent years.

Some prestigious and luxury baijiu brands – including Kweichow Maotai and Wuliangye – have also introduced their own fruit wines.

WSJ : Trump Warns Musk of ‘Serious Consequences’ if He Backs Democrats

Trump Warns Musk of ‘Serious Consequences’ if He Backs Democrats
Musk deletes social-media posts that sought to connect Trump to disgraced financier Jeffrey Epstein

Key Points
  • Trump threatened consequences if Musk backs Democrats in the midterms.
  • Musk deleted social-media posts linking Trump to Jeffrey Epstein; Trump denies any connection to Epstein’s crimes.
  • Trump aides play down the possibility of reconciliation after their public falling out over Musk’s criticism.

BEDMINSTER, N.J.—President Trump warned former right-hand-man Elon Musk to stay out of the midterm elections, threatening “very serious consequences” if he backed Democrats in the campaign.

Musk, who crossed Trump by staunchly opposing his “big, beautiful” tax-and-spending bill over deficit concerns, said last week that anyone who votes for this bill should be fired. Some Democrats have suggested that they try to win Musk over to their side, despite his being villainized by the party for his sweeping cuts to government staff. The billionaire spent about $300 million backing Trump and Republican candidates in the 2024 elections.

Asked by NBC News on Saturday if Trump was concerned that Musk could start funding Democratic candidates, Trump said “he’ll have to pay very serious consequences if he does that,” but declined to provide specifics.

In the NBC interview Trump said he had “no reason to” repair his relationship with Musk, after their breakup played out in real time on Thursday. Asked whether his relationship with the billionaire businessman was over, Trump said, “I would assume so.”

Musk deleted social-media posts in which he attempted to connect the president with convicted sex-offender Jeffrey Epstein. As the men’s relationship imploded on Thursday, Musk wrote on X that Trump’s name appeared in documents stemming from a federal investigation of Epstein, insinuating that he was in some way linked to the late disgraced financier’s criminal behavior.

On Friday, Musk wrote, “I will apologize profusely as soon as there is a full dump of the Epstein files.” Both posts have been removed from Musk’s X feed.

The president and his senior aides said Trump has no connection to Epstein’s crimes. Trump called the allegations “old news” in the NBC interview. “Donald Trump didn’t do anything wrong with Jeffrey Epstein,” Vice President JD Vance said in a recent podcast interview.

Behind the scenes, some people close to Trump and Musk have sought to organize a phone call between the two men in an attempt to hash out their differences, according to people familiar with the matter.

David Sacks, a venture capitalist who acts as Trump’s AI and crypto czar, has been privately encouraging Musk to call the president to try to mend the relationship, according to people familiar with the matter. James Fishback, a businessman and supporter of both Trump and Musk, encouraged Musk on social media to apologize to the president. A spokeswoman for Sacks declined to comment.

But Trump has said repeatedly in interviews he has no interest in talking to Musk, and the president’s advisers played down the possibility of a call.

A senior White House official reiterated that Trump has no immediate plans to speak with Musk, adding that the president is in the process of moving on after the high-profile clash with the billionaire. The official said Musk’s decision to delete his social-media posts about Epstein isn’t enough to repair the relationship.

After Fishback wrote in a social-media post that Musk should apologize to Trump, Fishback heard from White House officials, who thanked him for his support, but said—at least for now—that the relationship between the president and the Tesla CEO is over, a person with knowledge of the conversation said.

Long before Trump and Musk had their public falling out, some White House staff privately clashed with the billionaire, including Sergio Gor, the head of the White House Personnel Office.

Issues between Musk and Gor intensified during a mid-March cabinet meeting, where Musk complained extensively about what he said was the slow pace of hiring aides to fill agencies. Musk’s complaints were seen as an effort by Musk to embarrass Gor in front of the cabinet, according to several people familiar with the episode. But Gor was prepared to push back on Musk’s broadsides, and had statistics about the pace of hiring at his fingertips, some of the people said.

Steven Cheung, the White House communications director, said in a statement that Gor is a vital member of Trump’s team. “As a long-time advisor, there is nobody more capable of ensuring the government is staffed with people who are aligned with the mission to make America great again and work towards implementing the president’s agenda,” Cheung said.

Though Musk has toned down some of his harsh rhetoric over the past 48 hours, he has continued to raise concerns on his X account about what he argues is out-of-control spending by the federal government.

And he has continued publicly discussing the possibility of starting a new political party that he argues would better represent the majority of voters. He wrote on X that he plans to call it The America Party.

Trump and his senior advisers have tried to refocus their attention on passing Trump’s tax-and-spending bill, which cleared the House last month and is now being debated in the Senate.

“I’m too busy doing other things. You know, I won an election in a landslide. I gave him a lot of breaks, long before this happened,” Trump told NBC when asked if he has any desire to repair his relationship with Musk. “I think it’s a very bad thing, because he’s very disrespectful. You could not disrespect the office of the president.”

>>> Barrons Weekend Summary

Cover:
-As Warren Buffett prepares to retire as Berkshire Hathaway CEO, the spotlight is on companies that use or plan to use the Oracle of Omaha's strategy of combining insurance and investments, which is not as easy as it appears. The Buffett approach is increasingly being used by top alternative asset managers, such as Apollo Global Management and KKR, which incorporate Berkshire Hathaway into their investment strategies. Bill Ackman has been approved to transform Howard Hughes Holdings, a real estate company, into a "mini-Berkshire" with an insurance business. Dan Loeb plans to transform his European-listed investment fund, Third Point Investors, into an insurer focused on the hot annuity market. Other companies using a similar strategy include Markel Group, Fairfax Financial Holdings, Loews, and White Mountains Insurance Group. However, mimicking Buffett's strategy is challenging, as public markets would be awash in Berkshire Hathaways if it were easy. Markel and Fairfax are the closest to Berkshire in structure, generating impressive returns since the mid-1980s.

Interview:
-No update

Tech Trader:
-Nintendo has launched the Switch 2, its first console in eight years, and is now poised to be one of the most successful hardware releases of all time. The Switch 2 went on sale on Thursday, with customers waiting in long lines at GameStop, Best Buy, and other retailers. The hardware delivered what people wanted—a Switch with better technical capabilities that maintains the original's charm and overall form factor. The hot-selling Switch 2 means that Nintendo's consecutive console hex is probably over, as it offers backward compatibility, allowing it to play current-generation Switch games and giving gamers solace that their large investments in software are intact.

The Trader:
-The S&P 500, which reached 6000 points, has not been able to continue climbing, indicating a nuanced signal for investors. The index has gained 1.4% for the week, while the Dow Jones Industrial Average is rising 1% and the tech-heavy NASDAQ Composite is up 2.2%. The S&P 500 is key to the market, but it hasn't passed the test with flying colors. It reached 5999 by noon on Thursday, but sellers pulled it lower due to the risk of market drop. This is the third time since late February that the index came within less than 50 points of reaching 6000 and couldn't surpass it, indicating that there hasn't been enough economic change to boost confidence in stocks' potential soar. The index closed in the green on Friday, with the S&P 500 still below its record high of 6144 hit on February 19.
-Kroger shares have fallen about 9% since early 2025 due to investor appetite for risk. However, Kroger's upcoming earnings report should convince investors that there are plenty of gains to be had. Analysts have not reduced their earnings estimates during the dip, suggesting sentiment rather than fundamentals is responsible for the decline. Kroger stock trades at 13.6 times 12-month forward earnings per share, down from its 2025 peak of just over 15X. The risk reward is appealing at a reasonable 13x, and the stock has room to gain as long as its first-quarter earnings report doesn't disappoint. Analysts expect same-store sales to grow by 2.4%, driven mostly by mild price increases, bringing total revenue to $45.27B. Kroger doesn't have a tariff problem, as only a tenth of its products come from overseas, with just 1% coming from China. This could lift the gross profit margin slightly, though expected earnings of $1.45 per share would be up only 1.4% from the same quarter one year ago due to investments in employees and new technology assets.

Features:
-The Trump-Musk fissure has raised questions about whether Elon Musk poses more harm as Tesla CEO than good. Wall Street has overwhelmingly stated that replacing Musk is unimaginable and that investors should stick with the stock if they believe in his vision for an artificial-intelligence future. Future Fund co-founder Gary Black believes that Tesla without Musk would be a disaster for shareholders, as he is the visionary and architect behind autonomous vehicles and humanoid robots. Wedbush analyst Dan Ives sees Musk as the best asset of Tesla and sees him as CEO until 2030 despite the Trump situation. The question has been raised before, as reported by the Wall Street Journal in April. Tesla board chair Robyn Denholm responded to the Journal report, calling it "absolutely false." Tesla investor Alexandra Merz, a former credit officer at Moody's and founder of L&F Investor Services, defended Musk's leadership in a panel hosted on X, saying she doesn't want Musk replaced.
-The drug industry has been aligning with the Trump administration's efforts to move manufacturing and investment into the US and disentangle the American economy from the Chinese one. However, U.S. pharma companies have recently announced the biggest deals ever for the rights to experimental medicines invented by Chinese companies. These deals, worth around $25B in upfront and potential milestone payments, seem to fly in the face of White House policy. The deals could potentially result in new options for sick patients but also pose a major risk to U.S. biotech firms. The domestic drug pipeline relies on capital from Big Pharma, and now those funds may be going to start-ups in Shanghai, rather than Cambridge, Mass. The recent deals follow a successful trial result last year by US biotech Summit Therapeutics of a new immunotherapy cancer drug it licensed from Chinese firm Akeso. Since then, Big Pharma companies have rushed to get their own drugs to compete with Summit’s product. In November, Merck licensed an experimental drug from a Chinese drugmaker for around $500M up front and another $2.7B in potential milestone payments.

Europe:
-President Donald Trump has had a phone call with Chinese leader Xi Jinping, following the unraveling of a trade truce between the two countries in mid-May. The call, which lasted 90 minutes, was described as a "very good phone call" and resulted in a positive conclusion for both countries. Trump has also announced that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer will be meeting with their Chinese counterparts soon. Xi invited Trump for a visit and stated that Chinese students are welcome to study in the US. Both countries have accused each other of violating the agreement reached in Geneva, which reduced tariffs from triple-digit levels. The US has indicated that China is slow-walking the lifting of export restrictions on critical minerals, while China has pushed back against the reinforcement of restrictions on access to artificial-intelligence chip technology and electronic design automation software.

Emerging Markets:
-No update

Commodities:
-Wall Street is optimistic that deregulation and tax cuts will impact corporate earnings and favorable trade deals will be struck. Investment advisors are helping clients navigate this complex landscape, and they have not been making adjustments based on shifting government policy. The US dominates the digital economy, with Apple being the world's leading provider of smartphones, e-commerce, digital advertising, cloud computing, electric vehicles, and AI chips for GPUs. The rest of the world, except China, has fallen behind, with China's technology likely not being accepted in the US or Western Europe. The rest of the world is falling further behind in AI, with Europe and Japan lagging behind. A European Commission report revealed that Europe invests only 4% of what the US has invested in AI, and the rest of the world is becoming increasingly dependent on the US

Streetwise:
-Small-caps have been long-term winners in the stock market, with an average return of 15% a year over the past century. Swiss engineer Rolf Banz documented the "size effect" in 1981, which led to IBM's acquisition of Microsoft in 1986. IBM's PC-DOS, a quick and dirty operating system, was a success, but IBM didn't lock down the rights, allowing Microsoft to sell it as MS-DOS to PC clones. This led to the PCjr, which wasn't powerful enough to run Microsoft's Windows software. Goldman Sachs took Microsoft public in 1986, giving it a market cap of $777M, or $2.3B in today's dollars. Investors have enjoyed wild stock surges from personal computing, the internet, and artificial intelligence, with Microsoft valued at $3.5T. Tech giants dominate the stock market, and some argue for a small-cap comeback. Northern Trust analyst Daniel Fang points out that small-caps have underperformed large-caps for 12 years, leaving them cheap. Such cycles since 1930 have averaged nine years in either direction. With interest rates higher, more small-caps will naturally grow to become large-caps, boosting returns for small-cap indexes.