FT : Will the Federal Reserve respond to Donald Trump’s call on interest rates?

Will the Federal Reserve respond to Donald Trump’s call on interest rates?
Market Questions is the FT’s guide to the week ahead

The Federal Reserve is not expected to cut interest rates on Wednesday but the US central bank’s policy is already under scrutiny from President Donald Trump.

Investors overwhelmingly expect the Fed to hold rates at their current level of 4.25-4.5 per cent, after three consecutive cuts since September.

Attention will focus on any shift in outlook from the accompanying statement, and on remarks from chair Jay Powell in the subsequent press conference.

In December the Fed signalled a likely pause in rate cuts and said it would consider the “extent and timing” of any further changes. Since then, data has shown slowing inflation and solid jobs growth — a combination that has sparked debate over the need for, and timing of, any further rate cuts.

“If the [Fed] wanted to send a further hawkish signal in January, this sentence could be modified again,” said HSBC US economist Ryan Wang. “We expect the Fed to refrain from sending such a signal, but this is a hawkish risk.”

But Powell is likely to face questions on early actions and comments from Trump, who this week said he would demand that interest rates drop. The president also called for lower oil prices, which could also affect inflation.

Trump has previously called for Powell’s exit but both have downplayed any friction since November’s election.

The Fed chair also made it clear in November he planned to serve out his current term and maintained too that the president could not remove him. Jennifer Hughes

Will the ECB signal a more aggressive interest rate policy?
After European Central Bank President Christine Lagarde last month came closer than ever to calling victory over inflation, investors are expecting another interest rate cut on Thursday.

Markets have fully priced in another 0.25 percentage point rate cut from policymakers in Frankfurt. If confirmed, that would be the fifth such reduction since June and would take the key deposit rate to 2.75 per cent, the lowest level in almost two years and 1.25 percentage points lower than at its peak in 2024.

In doing so, markets expect the ECB to discount December’s jump in annual inflation back to 2.4 per cent. It is confident that annual price increases this year will be close to its medium-term target of 2 per cent, while economic growth is likely to disappoint.

But almost half of the 72 participants in a Financial Times survey among European economists said that the ECB had been too slow in lowering rates.

“We do not see ourselves behind the curve,” Lagarde told CNBC in an interview in Davos this week where she attended the World Economic Forum.

Traders are expecting two or three further quarter-point cuts this year, according to levels implied by swaps markets.

With the US Fed becoming much more hawkish in December, a growing transatlantic gap in monetary policy appears to be opening up.

Lagarde told CNBC that the ECB was not “overly concerned” about potential repercussions for Europe from a potential uptick in inflation in the US. Olaf Storbeck

Will the Bank of Canada cut rates?
Traders are widely expecting the Bank of Canada to cut interest rates by a quarter point at Wednesday’s policy-setting meeting but a small question mark remains, given recent trends in economic data.

Swaps markets are pricing in a 90 per cent probability the central bank will cut its benchmark rate by 0.25 percentage points to 3 per cent from 3.25 per cent.

But when the Bank of Canada took half a percentage point off its overnight rate in December for the second meeting in a row, responding to weaker than expected economic growth, deliberations from its governing council showed that the decision between a quarter-point and half-point cut was a “close call” given mixed data and noted the “substantial” cumulation of recent reductions.

Members would be evaluating the need for further reductions in the policy rate “one meeting at a time”, the bank said in a summary of their deliberations, and “expected a more gradual approach to monetary policy going forward”.

Data since then show that Canada’s economy was growing “roughly in line” with the central bank’s forecast, according to Capital Economics. It also highlighted inflation data for December, that while including a decline to 1.8 per cent in the headline rate, indicated that a measure of underlying inflation trends was “uncomfortably high”.

Such pressures could give the central bank, which has also cited uncertainty created by the new US administration, the grounds to pause its rate cuts.

“With tariffs clouding the economic outlook, we judge that the governing council will opt for a [quarter-point] policy rate cut,” said Thomas Ryan, North America economist at Capital Economics.

FT : Reeves explores unlocking billions from UK defined benefit pensions for inv

Reeves explores unlocking billions from UK defined benefit pensions for investment
The government is preparing to allow companies to access scheme surpluses in latest attempt to kick-start growth

Chancellor Rachel Reeves is looking to free up billions of pounds from the UK’s £1.2tn defined benefit pension system in her latest attempt to kick-start growth.

The government is preparing to allow companies to access scheme surpluses — estimated to be worth around £100bn — to encourage them to invest in more risky assets, according to people briefed on the chancellor’s thinking.

“The devil is in the detail but we are positively inclined,” said one government insider.

The Treasury declined to comment on the discussions — first reported by Sky News — but City sources said Varun Chandra, Sir Keir Starmer’s top business adviser, had discussed the possibility of using so-called surplus to boost the economy.

A shift in focus to DB schemes comes as the chancellor is gearing up for her growth speech on Wednesday. Pension experts estimate allowing companies to access scheme surpluses could unlock up to £100bn for investment.

The government had previously focused its pensions review on consolidating defined contribution (DC) and local authority pension assets. A review into pensions adequacy — which the government had hoped would drive more investment into the UK — has been delayed indefinitely.

In an interview with the Financial Times in November, former pensions minister Emma Reynolds said she had prioritised reforming DC workplace schemes because that was “where the growth is”.

She pointed out the majority of corporate DB pension schemes were closed to new members and “naturally had a less long time frame” as schemes move into less risky assets as they wind down or sell their pension obligations to an insurance company.

However, industry insiders said a radical improvement in the funding position of DB pension schemes in recent years following a rise in government bond yields meant many were now in a position to take on more risk, if the rules enabled companies and scheme members to benefit from it.

“The reason the government announcements have been about DC and the Local Government Pension Scheme is because they’ve not really understood DB and think it’s too big to touch . . . but the implications of not touching it are worse for the government and I think they realise it now,” said the chair of a multibillion pound DB pension scheme.

David Lane, chief executive officer at TPT Retirement Solutions which manages DB and DC pensions, said allowing companies to access scheme surpluses was “likely to be a more effective way of channelling pension assets in to the UK economy then some of the consolidation initiatives that have been announced . . . it’s direct if the employer reinvests that money into its business”.

Access to scheme surpluses could slow the pace at which pension funds have been offloading their pension obligations to insurance companies, with around £50bn of assets transferred in so-called bulk annuity transactions in each of the past two years, according to pensions consultancy WTW.

Halting this trend could help support UK government bond and equity markets in the longer term because insurance companies typically sell gilts and invest in higher yielding corporate bonds — many of which are overseas — as well as infrastructure to make their profits.

Zoe Alexander, director of the Pensions and Lifetime Savings Association trade group, said she backed surplus release, with the right protections in place to ensure member benefits are secure.

“Lowering the legislative threshold for allowing returns of surplus could potentially encourage trustees (in conjunction with their employers) to adopt a more ambitious mindset and take on slightly riskier investment strategies for their DB assets, including greater investment in UK assets,” she said.

Electrek : Tesla refuses to do the right thing about ‘Full Self-Driving’ transfe

Tesla refuses to do the right thing about ‘Full Self-Driving’ transfers

Tesla is refusing to do the right thing about ‘Full Self-Driving’ package transfers and instead holds its own incapacity to deliver the package over the head of its owners.

I just had a conversation with Tesla about doing the right thing about FSD transfer. I got an answer: a “categoric no”.

Tesla is literally using its own incapacity to deliver a feature it promised and sold to people, unsupervised self-driving, as a demand trigger to get people to order new cars.

The Context
For those who are not aware, Tesla has been selling since 2016 something called “Full Self-Driving package”, FSD for short, that includes advanced driver assist features, and the automaker has been promising that it will eventually result in unsupervised self-driving capability through over-the-air software updates.

At first, Tesla claimed that all cars produced since 2016 would be able to achieve that. However, Tesla quickly found out that it was wrong and introduced a new computer called HW3 in 2019 and retrofited vehicles with it.

In 2023, Tesla introduced again a new computer, HW4, but the automaker claimed that it would just add more computing power to improve capacity in the future, and it was still confident that it could deliver on its self-driving promises with HW3 cars.

In fact, Tesla CEO Elon Musk even claimed that software updates on HW4 cars would lag 6 months behind updates on HW3 cars as Tesla focuses on delivering on its self-driving promises on the older vehicles.

That lasted less than a year. Since last year, Tesla has been focusing updates on HW4 as it is reaching the compute limits of HW3. As we previously reported, Tesla is now using both nodes on the HW3 computer – meaning that it doesn’t even have any compute redundancy, which is required for level 4-5 autonomy.

Late last year, Tesla finally signaled that it might be reaching the limits of HW3 and said that it would provide computer retrofits if needed, but there’s no retrofit in sight despite HW3 falling now months behind HW4 cars.

With the questionable hardware situation and the even more questionable data pointing to Tesla being way behind schedule on its self-driving ambition, Tesla FSD owners are asking for a simple thing from the automaker, and it can’t even do that.

The Problem
With the situation looking dire for HW3, Tesla owners have been asking the automaker for years to link the FSD software package to the owner rather than the car – meaning that if you upgrade your car to a new Tesla, you can transfer your FSD software package, which you paid up to $15,000 for and Tesla never fully delivered, to the new car.

Doesn’t this sound fair? Tesla sold you a product they never delivered, and you are only giving them another shot on the newer hardware with a new car, which has a higher chance of success.

It doesn’t cost Tesla anything since it’s just a software package that it transfers to hardware that is standard on all cars.

Yet, Tesla has refused to do the right thing here. Musk was asked several times by Tesla owners about doing that and refused. Instead, he devised a plan to use Tesla’s own inability to deliver self-driving capability as a demand trigger.

In the summer of 2023, Musk finally agreed to allow FSD transfers, but not because it was the right thing to do. Instead, he said it would be a “one-time amnesty” for a single quarter. Tesla used this to boost sales in the quarter.

Tesla ended up bringing back the incentive four more times when it needed to boost orders, making Musk a liar for saying it would only be for a quarter. By claiming it’s only for this one time, Tesla is creating urgency in trying to get people to upgrade – instead of doing the right thing and offering everyone who bought FSD the ability to transfer until Tesla actually delivers on its promise.

Currently, Tesla is not offering it because it doesn’t need to. There are plenty of other factors boosting demand right now including the new Model Y, the fear of losing the tax credit in the US, and in Canada, Tesla just announced a price increase coming next month – pushing people to take delivery this month.

I reached out to Tesla about transferring my FSD on a new car this week, and I was told “the FSD transfer window is closed right now”. After explaining all this above to the salesperson and highlighting that it’s the right thing to do not to charge me $11,000 for a software package that I already bought and they never delivered, they agreed to run it up the chain.

The next day, I was told that upper management responded: “a categoric no.”

Electrek’s Take
It’s such a simple thing to do. It’s not only the right thing to do, but it’s also smart for Tesla as it reduces the obvious liability of having HW3 cars that paid for FSD.

At this point, it’s clear that Tesla will never be able to deliver on its promised unsupervised Full Self-Driving capabilities on HW3 cars. Should we really be surprised? Tesla was wrong before and had to upgrade cars from HW2.5 to HW3, which is now 6 years old.

Tesla didn’t know what hardware it needed to deliver self-driving then, and there’s a good chance it doesn’t know now. But even then, would anyone seriously believe that Tesla would deliver unsupervised self-driving capability on 6-year-old hardware? I think not.

Therefore, every HW3 vehicle Tesla sold with a FSD package is a liability. It makes for them to remove the packages from those cars and move them to more recent vehicles with a higher chance of ever delivering on their promise – even though there’s plenty of room for doubt with those cars too.

Regardless, It’s about doing the right thing for your customers instead of using your own inability to deliver a product you promised as a demand lever for more orders. It’s worse than the tactics used by car dealerships that Tesla despises so much.

As usual, I want to highlight that I think FSD is an incredible product, and if it was developed without Elon Musk claiming that it would achieve unsupervised self-driving by the end of every year for the last 5 years and Tesla selling the product to customers before it is ready, I think it would be much more celebrated.

But instead, Tesla and Musk are doing those things, and many people see it as a fraudulent and dangerous product. It doesn’t help when the CEO grossly misrepresents data about the program.

(ZH) EU Considers German Chancellor Olaf Scholz's Proposal Of Europe-Wide EV Inc

EU Considers German Chancellor Olaf Scholz's Proposal Of Europe-Wide EV Incentives

The European Union is drafting bloc-wide incentives for electric vehicle purchases to aid struggling automakers, German Chancellor Olaf Scholz announced at Davos. He emphasized that Europe must strengthen its economy, boost industry competitiveness, and reduce bureaucracy in response to global challenges, according to Bloomberg.

Scholz said last week: “What we need are pragmatic solutions, not ideological ones. And that is why I am delighted that the president of the commission has now taken up my proposal for harmonized Europe-wide purchase premiums for e-cars.”

Scholz criticized efforts to undermine EV adoption, emphasizing that "e-mobility is the future" and warning against harm to the auto industry. Ahead of next month's snap elections, his Social Democratic Party is proposing temporary tax deductions to boost German-made EV purchases.

But the road to EU-wide purchase incentives for EVs still has some bumps in it, according to follow up reporting by electrive.
They wrote this week that the EU is exploring harmonized EV incentives, but their implementation and structure remain uncertain. Proposals range from unlimited purchase premiums to socially targeted incentives, while Germany’s Chancellor backs temporary tax cuts for German-made EVs, though their legality under EU law is unclear. The CSU party has suggested a €3,600 purchase premium.

In Davos, Scholz reaffirmed that electric mobility is the future, warning that doubters harm the industry. EU Commission President Ursula von der Leyen echoed his view, emphasizing the importance of staying competitive in clean technologies.

Despite conservative pushback on the 2035 ban on new fossil-fuel car registrations, von der Leyen has stood firm, as alternatives to EVs are unlikely to mature in time.

As the report concludes, EU-wide incentives aim to bolster competitiveness against China and the US, but designing a WTO-compliant system that excludes subsidies for Chinese manufacturers remains a complex challenge.

TechCrunch : Real estate firms pivot to energy development amid booming data cen

Real estate firms pivot to energy development amid booming data center demand

Brendan Wallace has a lot on his mind lately. Wallace is the co-founder of Fifth Wall Ventures, a nine-year-old proptech venture firm with $3.2 billion in assets under management. He’s also a homeowner in L.A., which continues to battle raging wildfires. While his place remains intact, many of his friends haven’t been so lucky.

Wallace is becoming accustomed to external forces beyond his control. First, the pandemic drastically altered the landscape for many of Fifth Wall’s limited partners, a who’s who of real estate (CBRE, Cushman & Wakefield, Lennar). Unfortunately for many of those same players, office vacancy rates still stand at roughly 20% nationwide, and analysts don’t expect that number to budge as many companies abandon the idea of a full return to the office.

Proptech has also taken its slings and arrows in recent years, partly owing to high-fliers whose fortunes turned fast, like WeWork, which emerged from bankruptcy last June following a failed IPO and massive restructuring.

Change typically presents hidden benefits, however, and Wallace believes the industry is poised for a bounce back. As he sees it, there are ballooning opportunities tied to asset resilience — or using tech to help real estate assets withstand damage and disruption. He also sees a huge opportunity to help Fifth Wall’s limited partners more aggressively seize on the tech industry’s demand for data centers — and the energy required to fuel them.

We talked with Wallace recently about some of those trends, along with life in L.A. during what has felt to so many like the apocalypse. You can listen in on that full chat here or read on for excerpts from our conversation, edited lightly for length.

You’re in L.A. How are you doing?

It’s just tragic what has happened. Everyone on our team is safe. We’re in Santa Monica and they had to evacuate our office. This is a crucible moment for Los Angeles, and there’s going to be a lot of reflection on the other side of this, with the big political and economic questions that California has been grappling with for a long time coming into the fore. That’s a positive thing, but right now, it’s just devastating to see parts of this beautiful, amazing city destroyed.

How are you thinking about what comes next? There’s going to be a lot of cleanup, a lot of reconstruction. That must represent unexpected opportunities, as unseemly as that is to say.

I wouldn’t say opportunities … I do not think that on the other side of this crisis, people are going to stop wanting to live in Los Angeles … So I remain optimistic that this will be a moment of rebuilding and reimagination for one of America’s greatest cities. And I would say we at Fifth Wall are excited to be a part of that. What being a part of that looks like? I don’t know yet.

A major issue that homeowners and business owners were dealing with is [even before the fires] is the flight of insurance providers from the state …

We’re one of the most active investors in fintech for the residential industry. Fifth Wall invested in Hippo, which is a home insurance company that was very active in California. [Editor’s note: Hippo stopped writing new homeowners’ insurance nationwide last summer.]

I mean, a lot of the regulation that was very well-intentioned and focused on benefiting consumers has actually had the opposite effect, and it’s creating market asymmetries that are exacerbating the very problems we have now, which is a lot of homes being uninsured or people getting their insurance canceled. So what we are excited about is two things: there are better solutions for consumers that could be developed, and we’re interested in potentially investing in them. The other thing that I’d like to see is a streamlining of the amount of bureaucracy that is required to launch insurance companies.

Regulations aside, does the math work out? It’s hard to understand how startups with different regulations can [insure] California when these devastating things happen that make it very hard for insurers to recoup their investments.

It’s very hard to answer that question without looking at a county-by-county analysis. It’s possible that some areas are going to be uninsurable, but it’s also possible that some areas are going to be uninsurable that otherwise would be without regulation, and the latter is what I’m focused on mitigating.

This isn’t just a California problem. It might be more acute in California and the value of homes might be higher in California, but we have to solve this as a nation.

Do you think the wildfires might reshape the way real estate is valued in these high-risk areas? That doesn’t seem to have happened in, say, Miami.

I think it is going to increase prices for a few reasons. There’s going to be a lot of new construction in Southern California that’s going to drive up the replacement cost for homes. People are still going to want to live in these beautiful parts of the country; you aren’t going to see an exodus of people simply because of this.

The increase in insurance premiums is also going to lead to less affordability of homes, and that could have downward pressure [meaning houses might cost slightly less because sellers have to factor in the high cost of insurance]. The net of it, though, is this is going to increase a lot of home prices throughout Southern California and especially in West Los Angeles.

You’re an investor in ICON, a 3d printer of modular homes. Do you see a potential opportunity for that company? We reported that it laid off a quarter of its staff just this month before the fires broke out.

ICON is a really exciting business. Fifth Wall is a small investor in that company. Our thesis was not so much around wildfire prevention or post-natural-disaster rebuilding but around, how do you build homes faster and cheaper and with fewer materials than you do today? What they’ve built is a way of effectively printing a home and in the process, massively reducing the waste associated with home construction.

One of the crazy stats that most people don’t know is that about 5 percent of all the material in U.S. landfills is material that went to a construction site and then went straight to a landfill. It’s a massive problem that drives up cost for the consumer, makes it harder to operate construction companies, and has a massive carbon footprint. The question, I think, is: How can you scale that up? Can you make that cost effective?

Have you made investments in companies that are specifically focused on making nonflammable materials?

No, but we should, and I think it’s a space that will receive a lot of attention right now … [Going forward,] retrofitting is going to be the big problem. Most of the homes we need to protect are already built, and they are built with materials that can be very hard to rip out. And so in real estate tech, the bulk of the problem and the bulk of the value that you can add to society is by retrofitting the assets we already have, whether those be buildings or homes or infrastructure assets.

Of course, in rebuilding, we should be very cognizant about the materials used, and we should use the best solutions. But the vast majority of the homes at risk in Southern California already exist today.

Broadly speaking, the proptech sector has seen fewer deals in recent years. Is it fair to say that overall interest in the industry has cooled?

It has absolutely cooled. I think we just lived through — and are still in — cold, bitter capital markets for proptech. You hadn’t seen any big M&A events. Basically none of the focused venture funds, Fifth Wall included, raised any capital during that period. There were very little VC inflows to the space.

The flip side of that is what you’re seeing now — companies that survived this Darwinian extinction event. The companies that made the right cost cuts, that pivoted their business model, that pivoted their marketing, and that went through recapitalizations are emerging on the other side of this stronger, more viable, and more durable in a long term. I do think spring has sprung for the proptech industry, and you’re seeing lots of positive indicators for the space right now. [Editor’s note: Here, Wallace references the IPO of ServiceTitan, a Fifth Wall portfolio company that makes software for contractors and went public in December, and the recent sale of another portfolio company, Industrious, to its partial owner, CBRE.]

What about this existential threat to the office industry about which we’ve been hearing for years?

Long term, [there are questions] about the office industry, but alongside that you’re seeing explosive growth in categories that were never even thought of as real estate before. Data centers are absolutely exploding. And some of those that that explosion is forcing the real estate industry to grapple with big questions. Like, the AI revolution that has everyone enthralled is absolutely not possible without a massive scale up of data centers in the U.S. Yet a massive scale up of data centers in the U.S. is absolutely not possible without massive production of new energy.

Go on …

We need racks of servers that can do training and do inference all over the world — and we need lots of them. This is not a surprise or a secret in real estate capital markets; data centers have probably been for the past two years the hottest asset class in the real estate industry. But now there’s an associated problem that’s emerging . . . which is that data center is so energy intensive, the local utility will not allow you to plug in that grid …

That’s forcing the real estate industry to say, “We have to be in the energy business ourselves if we want to be in the business of computational data centers.”

What are your LPs expecting you to do? Are you going to be investing in fusion startups now?

Fusion is obviously really exciting, but we have a more near-term problem. We need the energy now or next year. Ideally, we do not want those to be fossil-fuel based, dirty energy sources … so that really leads to the renewables that we know are cost viable, [which is] most obviously solar. [So] the bottom line is, yes, we are investing in solutions to accelerate the development of solar alongside our real estate investors, and real estate companies will become energy development companies themselves.

CrunchBase : The Week’s Biggest Funding Rounds: Anthropic Leads Slow, Slow Week

The Week’s Biggest Funding Rounds: Anthropic Leads Slow, Slow Week

After a frenetic first couple of weeks as far as big rounds go, this week was quieter than a library. Only one round of more than $100 million was reported — although it was actually $1 billion — as everything came to a crawl. The goings on in Washington, D.C., likely had something to do with that, as many companies may have decided to hold their news until a slower week.

1. Anthropic, $1B, artificial intelligence: Anthropic, a ChatGPT rival with its AI assistant Claude, is reportedly taking in a fresh $1 billion investment from previous investor Google. In October 2023, Google invested $2 billion in the OpenAI rival. The new funding also comes just a couple of weeks after it was reported the startup was in advanced talks to raise $2 billion in a deal led by Lightspeed Venture Partners that would value it at $60 billion. Anthropic was last valued at $18.5 billion in February 2024. This deal also comes just two months after Amazon agreed to invest another $4 billion in an AI startup. That deal followed Amazon’s 2023 announcement to invest up to $4 billion in Anthropic — a deal that gave the Seattle-based e-commerce and cloud titan a minority stake in the startup.

2. Highnote, $90M, fintech: San Francisco-based Highnote, a fintech startup whose platform enables companies to embed virtual and physical card payments into their products, closed a $90 million in Series B led by Adams Street Partners that reportedly values the company at $750 million. While known mainly as a card issuer, the company is creating a platform that allows companies to receive card payments. Founded in 2020, Highnote has raised more than $145 million, according to the company.

3. Render, $80M, cloud infrastructure: Render, a cloud application platform, raised an $80 million Series C funding led by Georgian. The San Francisco-based startup’s cloud platform looks to simplify things for developers — eliminating the need for them to set up infrastructure configurations and settings. Founded in 2018, the company has raised nearly $157 million, per Crunchbase.

4. ShopMy, $77.5M, marketing: It’s not enough to have a great brand anymore — you also need to have relationships with influential creators. That’s where New York-based ShopMy comes in. This week, the startup — which helps creators manage product recommendations and eventually form relationships with big brands — raised a $77.5 million Series B led by Bain Capital Ventures and Bessemer Venture Partners. Founded in 2020, the company has raised $97 million, per Crunchbase.

5. Fundraise Up, $70M, nonprofit: Even fundraising is getting into AI. Brooklyn-based Fundraise Up, a fundraising platform for nonprofits globally, raised a $70 million financing round led by Summit Partners. The startup uses AI in its platform to boost donations in a variety of ways, including tailoring donation suggestions to individual donors. Founded in 2017, the company has raised $82 million, per Crunchbase.

6. Clutch, $65M, fintech: San Francisco-based Clutch, a fintech that partners with credit unions to enhance their offerings, completed a $65 million Series B led by Alkeon Capital Management. Founded in 2020, the company has raised $106 million, per Crunchbase.

7. Eleos Health, $60M, mental health: Boston-based Eleos, a startup using artificial intelligence to help with behavioral health, raised a $60 million Series C led by Greenfield Partners. Founded in 2019, Eleos says it has raised more than $120 million.

8. Lindus Health, $55M, biotech: New York-based Lindus Health, which helps clients run faster clinical trials, locked up a $55 million Series B led by new investor Balderton Capital. Founded in 2021, the company has raised almost $80 million, per Crunchbase.

9. Rhino.ai, $50M, artificial intelligence: Washington, D.C.-based Rhino.ai, an AI-driven development platform that enables enterprise application design, raised a $50 million Series A led by Koch Disruptive Technologies. Founded in 2023, this is the company’s first announced round, per Crunchbase.

10. Method Financial, $42M, fintech: Austin, Texas-based Method, a financial connectivity API for consumer liability data and payments, locked up a $42 million Series B led by Emergence Capital. Founded in 2021, the company has raised nearly $61 million, per Crunchbase.

Big global deals
Anthropic’s raise was easily the biggest of the week. The next largest came from Europe.
  • Sweden-based Neko Health, a health-tech startup, locked up a $260 million Series B.

WWD : Glenn Martens Seen as Frontrunner for Maison Margiela

Glenn Martens Seen as Frontrunner for Maison Margiela
Diesel's creative director since 2020 would succeed John Galliano at the helm of the Paris-based house.

BLUE CLUES: Speculation is rife in Paris that Renzo Rosso has found the successor to John Galliano at Maison Margiela within his own stable of design talents.

It is understood that Glenn Martens, creative director of Diesel since 2020, is in pole position to take up the plum Paris post.

Representatives for Margiela parent OTB could not be reached for comment.

Martens, who has heated up Diesel and won a cult following for his work at Y/Project, would certainly bring to Margiela formidable design chops and a yen for twisted constructions.

The Belgian designer has also dabbled in couture as a guest designer at Jean Paul Gaultier in 2022.

Martens was involved with Y/Project since it was launched in 2010. It ceased operations earlier this month after failing to find a buyer.

Galliano bowed out of Maison Margiela at the end of last year and on a high: His spring 2024 Maison Margiela Artisinal couture collection was one of the most acclaimed of the year, catapulting him and Margiela near the top of the fashion heap.

OTB Group also controls the Diesel, Jil Sander, Marni and Viktor & Rolf brands, production arms Staff International and Brave Kid, and holds a stake in the Amiri brand.

Martens grew up in the Belgian city of Bruges and graduated from Antwerp’s Royal Academy of Fine Arts in 2008. He was famously recruited by Jean Paul Gaultier after Gaultier saw his graduation show and conscripted him as junior designer for his women’s pre-collection and the G2 men’s label.

>>> Barrons Weekend Summary

Cover:
-The bond market has experienced a challenging period, with rising interest rates causing the worst fixed-income returns in almost 90 years. President Donald Trump's political promises, including tariffs, tax cuts, and heavy government spending, could push interest rates higher. The US Treasury, the world's biggest borrower, has felt the pressure of higher bond yields most acutely, as the government's total debt has grown larger than the US economy. This burgeoning debt points to higher interest yields and lower bond prices in the years ahead, driven by ongoing deficits totaling 6% of gross domestic product and surging interest expense on existing and new debt. The US Treasury must decide whether to be part of the problem or part of the solution.

Interview:
-No update

Tech Trader:
-Tech leaders at the White House announced the Stargate Project, a joint venture aiming to build new artificial-intelligence data centers in the US. The project promises investments of $100B in the first year and $500B over four years. SoftBank CEO Masayoshi Son will handle financing, OpenAI CEO Sam Altman will contribute AI expertise, and Oracle executive chairman Larry Ellison will oversee the buildout. MGX, a new AI investment firm in the United Arab Emirates, will be a financing partner. Microsoft, Nvidia, and Softbank-owned Arm Holdings were named as technology partners. However, there are several unanswered questions about the project, including where the money will come from. SoftBank has $38B in cash and short-term investments, and $80B in long-term debt. MGX may shoulder much of the financial burden, but it is unclear what resources it can muster.

The Trader:
-The stock market is currently dominated by the Magnificent Seven and the Federal Reserve, with investors potentially being the winners. The S&P 500 index rose 1.8% for the week, while the Dow Jones Industrial Average and NASDAQ Composite rose 2.2% and 1.7% respectively. Apple, Microsoft, Meta Platforms, and Tesla are expected to report earnings on January 27, with Netflix's fourth-quarter numbers indicating a positive impact. However, solid growth may already be priced into the Mag 7 stocks, and investors should not chase this momentum. The Roundhill Magnificent Seven ETF is trading at 30 times earnings estimates for this year. The Fed is primed for a knockout, as it is no longer expected to cut interest rates on January 29 and investors are not pricing in high odds of an ease at the March meeting. However, many on Wall Street believe it could deliver one or two more rate cuts this year.
-Healthcare stocks have been concerned since the election over the potential impact of Robert F. Kennedy Jr.'s confirmation as President Trump's Health and Human Services secretary. RFK Jr.'s skeptical comments about vaccines have raised concerns about a potential slowdown in drug development in the life-sciences industry. He has been particularly critical of the Food and Drug Administration, causing fears that approval of new medications could take longer than usual. However, Thermo Fisher Scientific, a medical instruments and equipment giant, has seen its stock rise about 3% since early November and nearly 11% in January. The need for major healthcare companies to develop new blockbuster drugs is more important than the specter of RFK Jr., as Covid-19 vaccines and treatments are no longer as lucrative as they were in 2021.

Features:
-Guggenheim analyst Joseph Osha has cut his rating on GE Vernova to Hold from Buy and withdrew his previous $380 target for the share price. Vernova stock closed just below $438/share on Thursday, and Osha is moving to the sidelines. Despite the "easy money" gains, Osha believes that the stock's valuation is less likely to improve as rapidly as they have been improving. GE Vernova shares were up more than 200% since the spinoff, but the downgrade has had a muted initial reaction due to Wall Street's positive reaction to earnings reported earlier this week. William Blair analyst Jed Dorsheimer noted record orders for gas power and electrification technologies, suggesting that President Donald Trump's power policies should boost Vernova's gas power and nuclear businesses. The stock trades for about 26 times the earnings before interest, taxes, depreciation, and amortization expected for 2026.
-Endeavor Group, the company that owns Ultimate Fight Championship and World Wrestling Entertainment, is facing a potential takeover bid from a group of big investors. The investors may request more than the current takeover price, given a sharp rally in its most valuable asset, a majority stake in the company. Silver Lake, the tech investment firm that reached a deal to take Endeavor private in April, could boost its offer for Endeavor, led by CEO and Hollywood agent Ari Emanuel. The deal is expected to close in the current quarter. Endeavor's stock is up 0.5% at $31.06, reflecting investors' view that the offer may have to rise. The key issue is that Endeavor owns just over half of TKO Group Holdings, which owns the UFC and WWE sports entertainment businesses. Since the deal was struck in 2024, TKO Group stock has risen just over 50%, raising the value of Endeavor's stake in TKO Group by more than $5B.

Europe:
-Novo Nordisk has reported early-stage data on a new weight-loss drug, amycretin, which could potentially outperform existing obesity blockbusters. The data comes after investors dropped Novo shares in December after CagriSema fell short of expectations. The Phase 1b/2a trial of amycretin showed patients on the highest dose losing 22% of their body weight after 36 weeks. The efficacy results were 4% better than a similar period in a Phase 3 study of Eli Lilly's Zepbound, the most effective weight loss drug currently on the market. If amycretin works better than Zepbound, it could help Novo regain weight-loss market share. However, the study is relatively early-stage and Novo did not provide details on amycretin's safety and tolerability profile.

Emerging Markets:
-No update

Commodities:
-President Donald Trump has called an "energy emergency" and signed executive orders to boost oil drilling and revoke clean energy rules from the Biden administration. The policy aims to "unleashing energy dominance," urging companies to "Drill Baby Drill." However, the biggest impact of Trump's policy changes may be on fossil-fuel demand. The US government has limited control over oil drilling, unlike countries with state-owned oil firms like China and Saudi Arabia. US oil production is already at record levels, and most companies are slowing production growth to ensure efficiency. Trump wants oil companies to drill in Alaska's wilderness, but there is little appetite due to high upfront costs. The natural gas industry is also facing challenges due to too much supply forcing prices down.
-Venture Global, a global liquefied natural gas company, has launched the largest ever IPO for a US energy company in history at a value of $60B. This raises some risk to the shares but could attract an audience that doesn't usually invest in energy. The IPO is a big splash for an industry that hasn't had many in recent years, as traditional oil-and-gas companies are associated with older products that will eventually become defunct as the world shifts away from fossil fuels. Venture Global CEO Michael Sabel believes the investor base for energy has "broadened out substantially," pointing to the interest seen in both Venture Global and other companies, such as Constellation Energy, which owns nuclear power plants and has seen stock double over the past year due to excitement about using nuclear power for artificial-intelligence data centers.

Streetwise:
-Jack Hough observes that the earnings season has been surprisingly good, with companies beating Wall Street's consensus estimate around three-quarters of the time. These surprises are often due to companies and analysts managing investor expectations to beatable levels, rather than business results wowing. Over the past five years, in cases where companies beat both earnings and sales estimates, their shares rose by an average of less than 1%. This suggests that investors are not underreacting to the surprises. A study over a decade ago found that the combination of earnings surprises and immediate price jumps was a solid predictor of handsome returns over the following months. However, many companies have delivered just that, with shares gaining an average of 3.6% in response. Overall, the blended fourth-quarter growth estimate for the S&P 500 has been nudging higher due to widespread and large upside surprises, approaching 13%.