FT : Satellite images reveal Huawei’s advanced chip production line in China

Satellite images reveal Huawei’s advanced chip production line in China
Rapid expansion of Shenzhen facilities designed to break dependence on foreign technologies

Huawei is building a production line for advanced chips as part of a network of semiconductor facilities in Shenzhen that seeks to break China’s dependence on foreign technologies.

The tech giant is the key player behind three manufacturing sites in Guanlan, a district of the southern city where Huawei is based, according to multiple people familiar with the matter and visits near the locations by the Financial Times.

Satellite imagery obtained by the FT shows how the Guanlan factories, built in the same distinctive style, have been rapidly developed after construction started in 2022.

The facilities, details of which have not been reported previously, demonstrate Huawei’s ambitions to become a semiconductor leader, boosting China’s effort to challenge the US in developing technologies such as artificial intelligence.

“Huawei has embarked on an unprecedented effort to develop every part of the AI supply chain domestically from wafer fabrication equipment to model building,” said Dylan Patel, founder of chip consultancy SemiAnalysis. “We have never seen one company attempt to do everything before.”

Huawei operates one of the sites, according to people with knowledge of the matter, who said it would make its 7-nanometre smartphone and Ascend AI processors — the company’s first effort to manufacture its own high-end chips.

Two other sites completed last year are operated by chip equipment maker SiCarrier and memory-chip maker SwaySure. While Huawei denies links with the two start-ups, industry insiders said the company was connected to the groups by helping to raise investment and sharing staff and technology.


The facilities also have financial backing from the Shenzhen government, according to those with knowledge of the sites.

Huawei is involved in projects that aim to develop alternatives to technology from chip designer Nvidia, equipment maker ASML, memory-chip maker SK Hynix, and contract manufacturer Taiwan Semiconductor Manufacturing Company.

Huawei’s chip efforts accelerated after Washington imposed sanctions in 2019 and cut the company off from critical foreign technology. Its work forms part of a broader government push to localise critical components in the face of US export controls designed to stymie Chinese tech development.

“I thought that Huawei was done once the US went after it,” said a company executive. “But its ambitions have only grown, and the strides it is making have been extraordinary.”


The sites are close to fabrication plants — or foundries — operated by logic-chip makers Pengxinwei (PXW) and Shenzhen Pensun (PST) that the US government alleges are linked to Huawei.

The company has also invested in semiconductor manufacturing facilities in Shanghai, Ningbo and Qingdao, according to those with knowledge of the effort.

Some industry insiders are sceptical that Huawei can realise its lofty ambitions given its relative inexperience in semiconductor manufacturing compared with domestic and international competitors.

“This is a big project that has had a lot of state support,” said a chip investor. “But there are rival companies in China working on the same thing for decades without managing to match ASML and TSMC.”


Guanlan locals referred to sites run by SiCarrier and SwaySure as belonging to Huawei, though the tech giant has denied links to the start-ups. Industry insiders said while the companies had different shareholder bases and structures, they had other close connections.

Huawei provides early support to the start-ups by dispatching management and technical teams, helping with fundraising and, in some cases, transferring technology, according to people familiar with the developments. The association with Huawei, in turn, gives state funds the “confidence” to invest, one of the people said.

This arrangement enables state funds to invest in Huawei’s chip development plans through its network of chip start-ups, without the conglomerate itself having to take on external investment and dilute its shareholder base.

“These companies will be cut off from Huawei once they reach a certain stage of development,” said a person with knowledge of its operations. “During the process, Huawei empowers them through providing personnel, technology and systems. This helps speed up the technology iteration and improves their chances of success.”


SiCarrier was spun out of a Huawei lab with the backing of a Shenzhen state fund, according to people familiar with the matter. It was registered as a company in 2021. Bloomberg previously reported the links between Huawei and SiCarrier.

It maintained a low profile until March, when it unveiled about 30 tools including etch, testing and deposition equipment at the Semicon conference in Shanghai.

SiCarrier has several subsidiaries, including the Shanghai government-backed Yuliangsheng, which specialises in lithography technology. Former Huawei engineers lead Yuliangsheng and are developing a deep ultraviolet lithography machine, according to people with knowledge of the development. SiCarrier has not made its DUV efforts public.

A second site is operated by SwaySure, which supplies Huawei with memory chips for cars and consumer electronics.

Huawei declined to comment on detailed questions related to this article but said: “It is not factually correct to attribute all [these] Shenzhen semiconductor-related activities to Huawei. Furthermore, SiCarrier, SwaySure, UEA, PXW and PST are not affiliated with Huawei.”

SiCarrier and SwaySure did not respond to requests for comment.


The third site is Huawei’s self-operated facility, which will include manufacturing lines for its smartphone and Ascend AI chips, as well as technology related to its autonomous driving business, said two people.

SemiAnalysis said its architectural style matched those of other Huawei-affiliated foundries. Additionally, the so-called wafer bridges connecting buildings on the site’s north side and nearby utilities bear the hallmarks of a chip manufacturing facility.

Construction is due to be completed in the coming months, but it will take at least a year to start operating, as Huawei seeks to use mostly domestically made equipment that is still being tested, according to people with knowledge of the facility.

Huawei’s attempt to manufacture its own chips was prompted by its frustration at the low output of its local fabrication partner, Shanghai Manufacturing Industry Corporation.

The need for Huawei to boost fabrication capacity for the Ascend chip is more urgent after it was exposed last year for using a third-party company to circumvent sanctions to use TSMC to make its AI chips.

Many partners and rivals, including SMIC and Shanghai Micro Electronics Equipment have been drawn in to bring critical engineering expertise to Huawei’s project.

An industry insider said Huawei’s political influence meant companies were expected to assist, even when it meant helping a competitor.

SMIC has dispatched engineering teams to assist in setting up the facilities. Meanwhile, SMEE, the leading domestic provider of lithography tools, has been providing support, even after Huawei poached many of its technical staff, said two people. Both companies did not respond to a request for comment.

The US government has targeted the Huawei network. In December, Washington placed SiCarrier and SwaySure on the “entity list”, barring American companies from selling technology to them.

The government alleged they were aiding Huawei’s efforts to build advanced chip technology for military modernisation.

FT : Counterterrorism police arrest Iranian nationals in raids across England

Counterterrorism police arrest Iranian nationals in raids across England
Five individuals were detained on suspicion of preparing terrorist act, police say

British counterterrorism officers have arrested eight men, including seven Iranian nationals, in relation to two separate alleged plots, London’s Metropolitan Police said on Sunday morning.

One of the alleged plots was a planned attack on an unspecified location, police said.

Yvette Cooper, home secretary, said the arrests were “serious events that demonstrate the ongoing requirement to adapt our response to national security threats”. 

She added: “The government continues to work with police and intelligence agencies to support all the action and security assessments that are needed to keep the country safe.”

Five of the men were detained across England on Saturday on suspicion of preparing a terrorist act against a “specific premise”, the Metropolitan police said.

Four of those individuals were Iranian citizens while the nationality of the fifth was still being established, the Met said.

In another counterterrorism operation on the same day, a further three Iranian nationals were arrested in London, the Met said in a separate statement.

The head of Britain’s MI5 domestic security service, Ken McCallum, said in October that his agents and police had tackled 20 “potentially lethal” plots backed by Iran since 2022, most aimed at dissident Iranians living in Britain. 

The spy chief said at the time that MI5 had seen Iran launch “plot after plot . . . at an unprecedented scale”.

The Met said that the first operation involved five arrests in Swindon, west London, Stockport, Rochdale and Manchester with support from officers from Counter Terrorism Policing, Greater Manchester Police and Wiltshire Police.

“As part of the investigation, officers are also carrying out searches at a number of addresses in the Greater Manchester, London and Swindon areas in connection with this investigation,” it said.

The Met said police officers had been in contact with the “affected site” to provide relevant advice and support.

Commander Dominic Murphy, head of the Met’s Counter Terrorism Command, urged the public to “remain vigilant” and pass on any relevant information they might have seen or heard.

“This is a fast-moving investigation and we are working closely with those at the affected site to keep them updated,” he said.

“The investigation is still in its early stages and we are exploring various lines of enquiry to establish any potential motivation as well as to identify whether there may be any further risk to the public linked to this matter.”

In the second operation, the Met said searches were ongoing at the three addresses. The Met said this investigation was unrelated to the arrests of the five men.

The police did not disclose details of the suspected plot, citing operational reasons.

FT : Struggle intensifies in Lebanon over IMF-sponsored bank reforms

Struggle intensifies in Lebanon over IMF-sponsored bank reforms
Opponents of clean-up plan target MPs and activists with barrage of media and legal attacks

Lebanon’s push to overhaul its banking system has sparked a furious rearguard action by opponents of the IMF-backed reforms that officials say are essential if the country is to recover from a 2019 financial meltdown.

Resistance to the reforms has taken the shape of repeated media attacks and court cases targeting civil society groups — including non-profit research and advocacy organisations — which have sided with the IMF and say they are the victims of a smear campaign.

Lebanese talk show hosts and news channels have accused reformist policymakers, NGOs and journalists who investigated financial corruption of being part of a George Soros-funded conspiracy to harm Lebanon’s economy.

Independent media outlets have also faced multiple legal complaints in what Human Rights Watch called a “weaponisation of criminal defamation laws”.

Lebanon has so far failed to implement most of the reforms demanded by the IMF since the currency lost more than 90 per cent of its value and bank deposits were wiped out in the 2019 crisis, with losses estimated at more than $70bn, in part because of the hostility of leading businesspeople and financiers.

But Prime Minister Nawaf Salam and President Joseph Aoun — who came to power earlier this year after the previously dominant Hizbollah movement was weakened during the latest conflict with Israel — are under pressure from foreign donors to overhaul the banking system. They have vowed to enact the reforms their predecessors did not.

Diala Shehadeh, a lawyer for Megaphone, one of the media outlets facing allegations, described a “political campaign . . . with the goal of defending the interests of the banker class”.

In a sign that the supporters of reform have momentum, parliament last week changed banking secrecy rules to allow increased transparency, while previous attempts had fallen short of IMF demands.

Salam hailed the decision as a “necessary step towards the desired economic reform which our government has pledged to achieve” and fundamental to “holding perpetrators accountable”.

His message contrasted with that of the leading media outlets that have lambasted civil society: they assailed the banking secrecy law as a “betrayal” of depositors and pushed against a clause in the new legislation allowing records from up to a decade in the past to be revealed.


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Yet the most contentious reforms are still to come, and the intensifying battle via the media underscores the challenges lying ahead for the new government and its agenda.

To secure a long-sought deal with the IMF, Lebanon needs to pass laws restructuring the banking sector, distributing losses for the 2019 crisis and preparing plans to repay depositors. The polarising question is how much of the burden should be borne by the state versus by commercial banks.

“Specific actors in the banking sector who had the most to lose and the most to hide have been those who are investing more heavily in supporting a certain narrative in the media,” said Ayman Mhanna, executive director of the Samir Kassir Foundation, a Beirut-based media watchdog.

“So far the campaign is not succeeding to actually reach its policy goals. This is why we expect the campaign to continue and to get even more forceful.”

A draft of a banking sector restructuring law has been accepted by the cabinet, and parliament’s finance committee began discussing it this week. But legislation to distribute losses and repay depositors has yet to be approved by either.

The secretary-general of the Association of Banks in Lebanon said this week that the banking sector wanted the draft restructuring law to find “a realistic balance between financial reform and the protection of depositors’ rights”. 

Lebanon’s former central bank governor Riad Salameh — whose policies are widely blamed for the crisis — was arrested last year and charged with financial crimes, including embezzlement, which he denies.

Lebanese banks have long been major advertisers on the country’s television channels, whose business models rely on support from bankers and politicians, according to studies by The Policy Initiative, a Beirut-based think-tank. 

Multiple media outlets have cast MPs who support the clean-up as agents of a foreign agenda. “A true political-economic octopus lurks in Lebanon,” said one report on Lebanese television channel MTV, calling policy advocacy group Kulluna Irada and news providers Megaphone and Daraj agents of US financier Soros, an accusation they deny. Megaphone and Daraj’s websites list the Open Society Foundation founded by Soros among their funders.

Some of the groups named in such reports have in turn filed legal complaints against MTV.

Daraj, Megaphone and Kulluna Irada have in recent months been subject to legal complaints accusing them of undermining the Lebanese state, which HRW described as an effort to “stifle attempts to shed light on” financial malpractices.

One complaint against Daraj, filed in March 2025 by banker Antoun Sehnaoui, accused the outlet of “harming Lebanon’s foreign relations” and “spreading fabricated news to destabilise financial trust”, according to Daraj’s lawyer.

Neither MTV nor Sehnaoui responded to requests for comment.

FT : UK adds just 65 miles of motorway in 10 years

UK adds just 65 miles of motorway in 10 years
Large proportion of additional capacity could be down to statistical anomaly, says transport expert

Britain has added just 65 miles of new motorway in the past decade, with a large proportion of this figure the result of a statistical quirk rather than actual construction.

The length of Britain’s motorways increased from 2,265 to 2,330 miles between 2014 and 2024, equivalent to 65 miles, according to data from the Department for Transport.

Some other European countries have built thousands of miles of new highways during the same period.

But former DfT civil servant Michael Dnes told the Financial Times that only three new stretches of motorway were opened in that period, on the A1(M) to Newcastle, the M8 near Glasgow and the M90/Queensferry Crossing.

The combined length of these sections totals 24 miles, according to Dnes’s calculations, who now works for the consultancy Stonehaven, raising a question over the whereabouts of the other 41 miles.

The discrepancy could be explained by the improved accuracy of Ordnance Survey maps, Dnes said. Great Britain’s national mapping agency can more precisely measure so-called “wiggle” in the roads, which has marginally extended the recorded length of highways.

Dnes said he was making a serious point that the progress in building motorways in Britain was so sluggish that it could be “swamped by literal rounding errors”. 

New motorways are often controversial with environmentalists because of their impact on climate change and on local biodiversity. Yet many drivers are frustrated with Britain’s often-congested roads.

The statistics will raise questions over why the UK has been so slow to build motorways in recent decades, with just 422 miles added since 1990.

In the same 35-year period, Spain has built 6,917 miles, France 3,057 miles, Germany 1,440 miles, Turkey 2,082 miles and Poland 1,545 miles, according to data from the EU.

One DFT official said Britain had not built much motorway in recent years because successive governments had “prioritised enhancements to the existing motorway network”.

Another official said the UK’s motorway system was more “mature” than other much larger European countries, having grown rapidly in the 1950s and 60s and therefore less in need of expansion.

Edmund King, president of the AA motoring organisation, said successive governments had backed “smart” motorways “to the detriment of actually improving the network”.

Smart motorways are sections of road where traffic flow is managed by adjusting speed limits. They are meant to increase capacity by utilising the hard shoulder as a running lane.

But King said that, in practice, “they don’t work as one-third of drivers don’t use the inside lane” for fear of broken vehicles ahead.

He added sudden lane closures could cause more congestion than on a regular highway, where the hard shoulder is available, noting £900mn has been spent upgrading “badly designed” systems.

Despite the government’s pledge to deliver a “record level of spending on fixing the road network” in the Budget, investment in building roads is expected to fall in the coming year by 5 per cent on the current allocation.

Noble Francis, economics director at the Construction Products Association, said: “Anyone who travels on the roads in the UK knows that we need improvements in both the quality of existing roads and new, additional roads to make travelling easier and quicker.”

Asphalt sales volumes have declined in five of the past six years and are now at their lowest in a decade, according to the Mineral Products Association, which represents the heavy materials industry.

Aurelie Delannoy, MPA director of economic affairs, said asphalt producers continue to face “investment strategies beset by delays, cancellations and a shrinking pipeline of new work — alongside worsening budget pressures on local authorities impacting road maintenance”.

>>> Barron’s Weekend Summary

Cover Story:
-Money managers in the US are more bearish now than they have been nearly 30 years, according to Barron's latest Big Money poll. The survey found 32% of respondents are bearish on the outlook for stocks over the next 12 months, the highest percentage since 1997. This is the highest percentage since the dot-com bubble, 9/11, Lehman Brothers collapse, 2008-09 financial crisis, and Covid-19 pandemic. The bulls' ranks are also at historic lows, with just 26% of respondents stating they are bullish on the market's prospects. The change in sentiment largely reflects concerns about the potential impact of the Trump administration's tariffs on corporate earnings and the economy. Despite President Trump's softening stance and willingness to make deals with both allies and China, managers remain concerned about the possibility of a global trade war.

Interview:
-Anduril, a California-based company valued at over $30B, aims to become a prime defense contractor by building weapons systems using advanced technology quickly and at scale. The company aims to put autonomy and software at the core of its products, similar to Tesla's impact on the auto industry. Anduril's core technology is an artificial intelligence brain called Lattice, used in its drone-tracking Sentry tower, Ghost reconnaissance drone, Roadrunner interceptor drone, and autonomous unmanned aircraft Fury. Barron’s spoke to Anduril's Executive Chairman, Trae Stephens, who after college started in the intelligence industry and then had a stint at Palantir Technologies. Stephens said that Anduril has found an opportunity in the market for weapons systems that leverage modern software. The company's strategy involves vertically integrated large-scale manufacturing, with Columbus, Ohio, being the location of Arsenal-1, its first hyperscale factory. This is in competition with the largest technology companies, as the best software and hardware engineers have options for work. Anduril's growth will be based on managing its supply chain, as it must compete with the best technology companies in the world. The company's collaborative combat aircraft, designed to fly alongside the Air Force's F-47 sixth-generation fighter jet, requires a significant increase in engine production from aerospace suppliers.

Tech Trader:
-Microsoft's earnings report revealed that while all four companies reported better-than-expected earnings, the stock reactions following their results highlighted that digital bits win over atoms in a global trade war. Shares of Microsoft and Meta Platforms surged, while Apple and Amazon underperformed. Apple CEO Tim Cook said tariffs would add about $900M to the company's costs for the June quarter, while Amazon CEO Andy Jassy said the company had yet to see significant impact from the levies. Both Apple and Amazon sell many physical products and couldn't provide much clarity about the potential tariff impact for the rest of the year. Beyond tariffs, reports of artificial intelligence's demise have been greatly exaggerated. Microsoft announced it would increase European data center capacity by 40% over the next two years and reaffirmed its prior guidance to spend $80B on data center capacity this fiscal year ending in June.

The Trader:
-Refiners, which convert crude into gasoline and other products, are influenced by the larger supply-demand picture for oil but are more dependent on the balance between the price of oil and the fuels they make. The fuel market appears tighter than the broader oil market, with the difference between the price of oil and the wholesale price of gasoline rising to $27 at the end of April. This gap is due to a fundamental difference between the oil and fuel markets today. The supply of crude oil is rising due to OPEC's increasing crude production, but the supply of fuels is not as much. There aren't enough refineries to turn all that crude into gasoline and diesel. Nearly as many refineries have been shutting down as opening this year, leaving the world in a relative deficit. LyondellBasell shuttered a Houston refinery in February, and Phillips 66
PSXInventories of gasoline are at the low end of their five-year average and have plunged to 12-year lows on the West Coast. Diesel inventories are also low. Fuel demand in both the US and Europe has remained relatively strong, even as gasoline demand is rising in many countries where the USA exports fuel – but unlikely to rise in the USA itself. Stocks of major refiners like Valero and Marathon Petroleum have fallen this year and are down more than 20% over the past year. Analysts see them bouncing back and nearly doubling by 2027.
-The S&P 500 has rebounded from its April lows as markets reflect President Donald Trump's less draconian stance on tariffs. However, the impact of tariffs may not be evident in the hard data until May or June, and the market is only one Trump Truth Social post away from another tumble. Many stocks don't look attractive, especially given the lingering hazards. The CBOE Volatility Index (VIX) has fallen but remains above 20, suggesting higher-than-average risks. Evercore ISI strategist Julian Emanuel screened for stocks with poor momentum and are buying back more stock than others, indicating management remains confident in a company's earnings potential and wants to support the stock price. Examples include Devon Energy, AES, Trex, and Enphase Energy, which have averaged declines of 11% this year, far more than the S&P 500's 3.6% drop. Pinterest, a $17.6B stock, has been a big repurchaser of its shares, trading at about 4.1 times expected sales for the next 12 months, down from a three-year peak of about 7.6. While it's more expensive than smaller platforms like Snap and Etsy, it is much lower than other fast-growing internet stocks like Airbnb and Booking Holdings, which trade over six times.

Features:
-Market strategists predict an imminent economic recession due to President Trump's tariff policies, while consumer confidence has declined for a fifth consecutive month. Despite last year's 2.8% growth in the US GDP, adjusted for inflation, there are reasons to believe the economy will avoid a recession this year. Hard data, including GDP growth, employment, inflation, and retail sales, doesn't provide a clear picture of economic distress, and consumer data shows continued growth in spending. GDP fell at an annual rate of 0.3% in the first quarter, with most of the decline due to a 41% surge in imports. Inflation-adjusted final sales to domestic purchasers gained 3%, and consumer spending rose 1.8% in the quarter.
-Palantir Technologies CEO Alex Karp expressed enthusiasm at his company's annual AIPCon gathering, stating that the company is thriving and has a strong investor base. However, the company has been the subject of debate on Wall Street, with analysts generally agreeing on its near-term growth opportunity. Analysts expect revenue to grow 36% to $862M, with earnings surging 62%. However, price targets among Wall Street analysts range from $40 to $130, with Palantir recently trading at $118. The uncertainty also affects Palantir's daily moves, with daily average spreads of 5.6 percentage points since going public in 2020. The volatility and debate stem from the company's nontraditional roots, as it grew up in the staid world of national security and defense. A devoted base of retail investors further clouds the company's value.

European Trader:
-Shell, the London-based oil-and-gas company, reported better-than-expected earnings for the first quarter despite falling crude prices. The stock rose and Shell maintained its $3.5B level of quarterly share buybacks, contrasting with rival BP, which scaled back its program. Shell's results show it can perform well even with oil prices at around $60 a barrel amid trade wars and recession concerns. CEO Wael Sawan pledged to increase output, focusing on profitable liquid natural gas operations. First-quarter adjusted earnings came in at $5.6B, better than consensus forecasts and up from $3.7B in the fourth quarter. Adjusted earnings were 92 cents a share, beating the 82 cents median estimate on FactSet. London-traded shares rose 3.4% in early trading, while American depositary receipts added 3.7 before the market opened.

Emerging Markets:
-No update

Commodities:
-The mineral-rights deal signed on April 30 has provided the US with preferential access to resources in Ukraine, including minerals and traditional energy resources like oil and gas. This deal is seen as part of the global race for resources that will intensify over the coming decades. Ukraine likely has an abundance of materials such as lithium, titanium, and rare earth elements, which are used in electronics, lasers, and wind turbines. However, the country doesn't have any commercially viable mines yet. As the US tries to wean itself off imports from China, one critical bottleneck for tech companies is that China is currently the biggest exporter of key minerals. Most of the minerals required to make machines that will power AI in the future aren't that scarce, but they're just not easy to access. Mining these materials is expensive, time-consuming, and can be harsh on the surrounding environment. China is miles ahead of everyone else in this area, with the largest-scale extraction facilities. The US Geological Survey calculates that more than half of the US needs for rare earths are met by imports from China, and 93% of US needs for yttrium, an element used in making LED lights, came from China last year.

Streetwise:
-Walt Disney is set to report its quarterly financial results on Wednesday, following two significant milestones. The live-action Snow White remake has surpassed $200 million in worldwide box office receipts, but ticket sales have been low after six weeks in theaters. Disney has halted Tangled, a live-action remake based on the Rapunzel story. Netflix has also surpassed Disney in stock market capitalization, becoming the most valuable media company in 2018. Disney plans to use Thunderbolts, a superhero team-up, for theater redemption. However, McDonald's has reported its biggest same-store sales decline since the Covid-19 lockdown. Disney+, which launched in the U.S. in 2019, has seen its subscriptions increase from $6.99 without ads to $9.99 with ads, ranking third in subscribers behind Netflix and Amazon.com's video kick-in for Prime subscribers.

Barron's : Buy This Beer Stock. It’s a Solid Buffer Against Tariffs.

Buy This Beer Stock. It’s a Solid Buffer Against Tariffs.
Dutch brewer Heineken, the fastest-growing premium brand in the industry, has limited exposure to the U.S. and trade wars.

Heineken is the world’s second-largest brewer, giving it advantages of scale and a large number of diverse revenue streams outside the U.S.
Heineken’s premium brand is growing quickly, and commands higher prices.
The stock has gotten too cheap, despite steady earnings growth.
The stock market is still trying to recover from a tariff hangover. Heineken might be a hair-of-the-dog solution.

Netherlands-based Heineken is the world’s second-largest brewer after Anheuser-Busch InBev. It has operations in more than 70 countries and, along with its eponymous beer, owns popular brands like Amstel, Dos Equis, Lagunitas, Red Stripe, and Tiger. It also gets less than a third of its business from the U.S.—good news at a time when Americans are drinking less and a potential trade war has clouded the picture.

All of that adds up to a recipe for broad-based, ongoing earnings strength, even in the face of an economic downturn.

“With all the back and forth on tariffs, one outcome is that people are going to be a lot more interested in European investments as they look outside the U.S. for opportunities,” says Brian Krawez, president and lead portfolio manager at Scharf Investments. “Heineken has very little exposure to the U.S., and it’s trading cheaply compared to where it has historically, even though we believe it still has decent growth going forward.”

He also likes the fact that some 40% of the company’s sales come from premium brands in developed markets that have strong pricing power. The Heineken brand itself is the fastest-growing premium brand in the industry.

Although surveys show that in the U.S., Gen Z and younger millennials are drinking less than prior generations, that is somewhat offset by older drinkers, so it will take time for demographics to turn against alcohol. Heineken is also pushing into new categories like low-alcohol and nonalcoholic beverages, which are growing double digits; its Heineken 0.0 was one of the first major brands in the space.

Morgan Stanley analyst Sarah Simon recently noted that she preferred brewers to spirits makers, given that “beer is better positioned in the context of moderation trends,” as evidenced by increasingly popular low-alcohol and nonalcoholic brews. (Zero-proof liquors exist, too, but are a smaller market.)

Heineken’s growing emerging markets business, which accounts for nearly two-thirds of its profits, can shine as well, given that many are seeing rising alcohol consumption trends that are likely to hold up relatively well throughout economic cycles.

“I think it is the best-traveling beer brand there is in the world,” says Roger de Bree, managing director of Tweedy Browne. “In emerging markets, alcohol is a relatively low-ticket way to feel good about yourself in good times and bad. It’s a lot cheaper than a BMW.”

Investors may be concerned about Heineken’s ability to navigate a global economy burdened with a trade war. Yet even if one materializes, it’s worth noting that management has handled worse in recent years. Although the pandemic weighed on profits, Heineken’s 2021 earnings per share had already rebounded to nearly 85% of its 2019 levels; by 2022, it had already surpassed prepandemic earnings. The founding family also remains heavily involved in the businesses, which research has found is beneficial for shareholders.

Nor do Heineken’s American depositary receipts, which trade under the ticker HEINY, look very pricey. They change hands for 15.4 times forward earnings, compared to a five-year average of close to 20 times. (There are also ADRs for Heineken Holding, which is a separate stock more closely linked to the controlling family.) Heineken also stands at less than 10 times enterprise value to earnings before interest, taxes, depreciation, and amortization, or Ebitda. That’s a discount to its own history and the midteens EV/Ebitda of SABMiller when it was acquired by AB InBev.

In April, Heineken delivered upbeat organic volume and revenue updates for its first quarter, and maintained its full-year fiscal 2025 guidance, despite currency headwinds and the unknown fallout from tariffs, which caused peer Diageo to withdraw its forecast.

De Bree argues that Heineken has been underearning in the postpandemic period. “You have heavy investments in the brands, heavy cost-cutting, relentless growth of your premium product, and premiumization. I’ve been sitting here for two years thinking the profits will explode sometime—not that they need to.”

Indeed, consensus already calls for Heineken to report EPS of $2.80 this year, a nearly 10% increase, and another 9% jump next year. The average analyst price target just over $52 implies more than 15% upside from Tuesday’s close of $44.15.

That said, Heineken isn’t without risk. Along with fluctuations in foreign-exchange rates, which the company noted was a headwind, the company’s premium brands could see slower growth in a recessionary environment in which people trade down.

Still, there are a lot of hopeful signs: The company has been bringing down its net-debt-to-Ebitda ratio, which is now below its five-year average; analysts have been tweaking their 2025 and 2026 EPS estimates higher in recent months; and Heineken has been actively buying back shares.

“If we could own more stocks like this, we would,” says de Bree.

We’ll drink to that.

>>> Weekend Papers Summary

FINANCIAL TIMES
-US stocks rose on Friday, wiping out losses following Donald Trump's "liberation day" tariff announcement. Labor market data showed 177,000 jobs added in April, surpassing the 135,000 predicted by Bloomberg economists. The S&P 500 jumped 1.5%, marking the ninth consecutive daily gain for the S&P 500 since 2004. The S&P 500 had plunged as much as 15% in turbulent trading after Trump's announcement, triggering tumult across global financial markets. However, global equities have since largely recovered, thanks to signs of a possible thaw in trade tensions, including comments by China's commerce ministry that Washington expressed "a desire to engage in discussions" on trade.
-Canada's Prime Minister Mark Carney is set to meet with Donald Trump in Washington on Tuesday to revive a crucial trading relationship with the US. This is Carney's first foreign visit since winning the general election after a campaign overshadowed by Trump's taunts about Canada and tariffs on some of its exports. The two leaders have agreed to meet next week in the US capital. Carney said he had held a "very constructive call" with Trump and the focus will be on both immediate trade pressures and the broader future economic and security relationship between the two sovereign nations. King Charles will also deliver a speech to open the new parliament in Ottawa later this month, marking the first time in nearly 50 years that the monarch takes part in parliament's opening. Trump's mockery of Canada and threats to annex the country have sparked tensions between the two allies and trading partners.
-In 2022, Citigroup hired 27 analysts to work from its newly opened office in Malaga, Spain, to improve work-life balance and attract new talent. The office, which offered eight-hour days and free weekends, was criticized by rivals as a publicity stunt. However, Manolo Falcó, the bank's global co-head of investment banking, defended the initiative as not a gimmick. Less than three years later, the office closed and most staff moved to London. A few employees have been let go as the initiative aimed to break from traditional working conditions faced by junior analysts in investment banking. Citigroup selected 27 analysts from over 3,000 applicants when it launched its Málaga hub less than three years ago. Former employees and those involved in the project say the reality differed from the bank's pitch, with many working long hours in hopes of earning coveted roles in cities like London and Paris. The project was conceived by a trio of Citi executives, including Nacho Gutiérrez-Orrantia, María Díaz del Río, and Falcó. Each analyst was allocated to one of the industry teams in London, with Málaga potentially serving as a springboard to a job in the City if they performed well.
-Donald Trump has proposed a $163B budget cut to federal spending, aiming to eliminate programs deemed "woke," "wasteful," or "weaponized against ordinary working Americans." The budget, submitted to Congress, aims to cut non-defense spending by 22.6% to the lowest level since 2017, while increasing the defense budget. The plan would cut billions of dollars previously spent on foreign aid, healthcare, education, and the environment, codifying many of the cuts being implemented by the Department of Government Efficiency. Trump's budget wishlist comes as he intensifies his assault on the administrative state, with Elon Musk and Doge leading the effort to shrink the size of the federal government. However, many of the measures will face an uphill battle in Congress, where Trump's Republican Party holds a slim majority in the Senate and House of Representatives. The proposal outlines the president's priorities for discretionary spending, which does not include longer-term mandatory spending such as Social Security, Medicare, and interest paid on the federal debt.
-Two Congressional panels, John Moolenaar and Rick Scott, have urged the Securities and Exchange Commission (SEC) to delist Chinese groups, including Alibaba that they believe have military links that threaten US national security. The lawmakers wrote to SEC chair Paul Atkins to request action against 25 Chinese groups listed on American exchanges, including Baidu, JD.com, and Weibo. They claim these entities benefit from American investor capital while supporting military modernization and human rights violations. Despite their commercial appearance, the Chinese groups are "ultimately harnessed for nefarious state purposes" due to China's military-civil fusion program, which requires Chinese companies to share technology with the People's Liberation Army when ordered by Beijing. The push is part of the latest US effort to counter China and reduce its ability to use American capital, technology, and expertise to modernize its military. The US-China trade war has exacerbated tensions between the two countries.
-Cardinal Kevin Farrell, born in 1947, is the 'camerlengo', the custodian responsible for overseeing the Holy See's day-to-day operations during the interregnum between popes. He is the Church official responsible for organizing next week's conclave, the secretive election held to choose Francis's successor. Vatican insiders say he is the perfect person for the role, as he has always been a practical man with very good skills in administration and managing money. Farrell enacted centuries-old rituals intended to prevent attempted misuse of papal authority after Francis's death. The papal apartment was sealed to prevent looting, once common after popes died. Francis's fisherman signet ring was destroyed to thwart attempts to create fake documents with his seal. For the conclave, the camerlengo is now responsible for ensuring an "orderly election and its privacy", according to Universi Dominici Gregis — the apostolic constitution governing papal succession. Tasks range from ensuring the Sistine Chapel is swept for surveillance devices to vetting the cooks and housekeepers who will serve the cardinals — swearing them to perpetual secrecy about what they may see or overhear.
-Germany's new agriculture minister, Alois Rainer, has urged meat to be served at every school and kindergarten in Germany, as Friedrich Merz prepares to become chancellor. Rainer, a butcher by training, will replace Cem Özdemir as the top official in charge of food and farming after Merz takes office. He called for cheaper meat prices and inclusion of meat on menus for children, particularly in schools and kindergartens. Rainer's comments were met with enthusiasm by Markus Söder, the head of Rainer's Christian Social Union (CSU), who is a fan of the döner kebab and made Green-bashing a personal hobby during the campaign for February's nationwide elections.
-The US Department of Justice plans to force Google parent Alphabet to sell key parts of its digital advertising business, which was found to be an illegal monopoly. The DoJ told a federal judge that divestments of Google's ad exchange and publisher ad server businesses are the only way to break its dominance. The tech giant should also be required to share real-time ad bidding data with competitors. A trial date for the proposals and Google's rebuttals is set for September 22.
-The Israeli military is proposing a new system of aid distribution points in Gaza, manned by soldiers or private contractors, to address the extreme food shortages faced by 2M Palestinian civilians. The proposal would require Palestinians to travel to a humanitarian zone and pick up food parcels to carry back to their families. The military has ruled out distributing aid itself, but the system would allow Israel to screen Palestinians and decide which ones receive food. Implementing this system could remove some of the largest, most experienced, and deeply resourced relief agencies from the process of distributing aid to the besieged population. This is one of multiple options discussed by Israeli officials for allowing aid back into Gaza, a prospect that Prime Minister Benjamin Netanyahu's far-right coalition allies are opposed to.

NEW YORK TIMES
-The expansion of a tariff-free shipments loophole nearly a decade ago led to low-cost online retailers like Temu and Shein offering items directly from Chinese factories at significant discounts. This also led to billions of dollars in digital advertising, benefiting tech giants like Meta and Alphabet. In the last two years, only Amazon spent more on online advertising in the US than Temu or Shein. However, the shipping loophole's demise may end the advertising bonanza, as President Trump eliminated the exemption that allowed goods made in mainland China and Hong Kong valued at less than $800 to enter the US without import taxes. This means Temu and Shein are now subject to tariffs of up to 145% for importing Chinese goods.
-Temu, a Chinese e-commerce platform, has stopped shipping products from China directly to US customers. Instead, all US orders will be shipped from local warehouses in America. This change comes as the Trump administration closed a loophole that allowed products made in China and worth no more than $800 to enter the US without import fees. The exemption, which President Trump has called a "big scam" that hurt American small businesses, ended Friday. Temu said it would adjust its prices after Trump announced his intention to close the loophole, known as the de minimis exemption. Last week, the company started charging import charges for US customers who wanted to buy items from China, which in some cases more than doubled their purchase prices.
-President Trump has proposed a fundamental rewrite of the American tax code, suggesting that the US could stop taxing income under $200,000 and instead rely on revenue from his extensive tariffs. Trump stated that it may take a while before a complete tax cut is achieved, as the tariffs could be enough to cut all income tax. This idea was news to Republicans on Capitol Hill, who are already working on translating Trump's impulses for cutting taxes into law. Congressional Republicans are trying to incorporate several of Trump's previous tax proposals into the legislation, including not taxing tips, overtime pay, and Social Security benefits.
-President Trump has proposed the elimination of the National Endowment for the Arts and the National Endowment for the Humanities in his budget for the next fiscal year. The proposal, along with the Institute of Museum and Library Services, aligns with Trump's efforts to reduce the size of the federal government for accountability, waste reduction, and unnecessary governmental entities. The endowments, which were proposed in 2017 during Trump's first term, have remained alive due to bipartisan support in Congress, despite their budgets growing during the first Trump administration. The proposal aligns with Trump's efforts to decrease the size of the federal government.
-The US Army is planning a parade in Washington to celebrate its 250th anniversary on June 14, which coincides with President Trump's 79th birthday. The parade will feature 150 vehicles, 50 aircraft, and 6,600 soldiers. A fireworks display and a daylong festival will also be held, featuring equipment displays, musical performances, and a fitness competition. The Army is exploring ways to make the celebration even bigger, including more capability demonstrations, additional displays of equipment, and more community engagement. The celebration is in honor of the 250th anniversary of the Army's founding.
-Harvard University has resisted President Trump's threat to revoke its tax-exempt status, stating that there is no legal basis for such a move. Harvard has not explicitly pledged to challenge the revocation, which would impact the university's finances. However, a spokesperson for the university stated that there is no legal basis to rescind Harvard's tax-exempt status. The move would endanger the university's ability to carry out its educational mission, result in diminished financial aid for students, abandonment of critical medical research programs, and lost innovation opportunities. Trump declared on social media that the government would be "taking away Harvard's Tax Exempt Status" and defended the move as "what they deserve."
-Ghana's national cathedral, designed by celebrity architect David Adjaye, is a $400 million project that has been a major financial burden for the country, which is in "severe distress" due to the country's debt and the ongoing construction of the cathedral. The walls surrounding the cathedral are made of aging plywood and its spires are yellow construction cranes. The choir of frogs that frequently reverberates with singing during the half-finished foundations fill with rainwater. The new finance minister has stated that Ghana's economy is in "severe distress."
-Health and Human Services Secretary Robert F. Kennedy Jr. will direct federal health agencies to explore new treatments for the measles disease, including vitamins, as the US faces its largest single outbreak in 25 years. This decision is part of a series of actions that experts fear will undermine public confidence in vaccines as essential public health tools. The outbreak has swept through low vaccination rates in the Southwest, infecting hundreds and killing two young girls. Critics argue that Kennedy has focused too much on untested treatments and offered only muted support for the measles vaccine, which is 97% effective in preventing infection. The decision to focus more resources on potential treatments could have grave consequences at the center of the outbreak.
-Australia is set to vote in a general election, becoming the third major U.S. ally after Germany and Canada, amid a global economic and political landscape impacted by the second Trump administration. The two candidates, Prime Minister Anthony Albanese of the center-left Labor Party and opposition leader Peter Dutton of the conservative coalition, agree that the country faces a challenging environment. The country heavily relies on the U.S. for security and benefits from trade with China, which is exerting military ambitions closer to Australia's shores. However, the persistent cost-of-living crisis and worsening housing affordability have dampened the optimism that Australia is a recession-proof country with rich resources, high wages, and a stable government.

NEW YORK POST
-The Trump administration plans to cut staffing at the CIA and other intelligence agencies, including the National Security Agency, over several years. The CIA workforce will be reduced by 1,200, and thousands of positions at the NSA and other intelligence agencies will be cut. The reductions at the CIA include several hundred people who have already opted for early retirement. The rest of the cuts will be achieved partly through reduced hiring and would not likely necessitate layoffs. The CIA issued a statement saying CIA Director John Ratcliffe is working to align the agency with Trump's national security priorities. The CIA and NSA have already offered voluntary resignations to some employees. The CIA also plans to lay off an unknown number of recently hired employees. The new administration has also eliminated diversity, equity, and inclusion programs at intelligence agencies, though a judge has temporarily blocked efforts to fire 19 employees working on DEI programs who challenged their terminations.
-The State Department has approved the sale of F-16 fighter jet training, sustainment, and equipment to Ukraine in the first deal related to the recently signed mineral rights agreement. The $310.5M equipment and services will allow the US to earn credit in an investment fund established by the minerals deal, where profits will be split 50/50. Ukraine's purchase includes aircraft modifications, personnel training, spare parts, consumables, accessories, repair and return support, ground handling equipment, software delivery and support, publications and technical documentation, studies and surveys, US Government and contractor engineering, technical, and logistics support services, and other related elements of logistics and program support. The Defense Security Cooperation Agency (DSCA) stated that the proposed sale will support the US's foreign policy goals and national security objectives by improving the security of a partner country that is a force for political stability and economic progress in Europe.

WWD : Four Watches for the Formula 1 Fan

Four Watches for the Formula 1 Fan
IWC Schaffhausen, Tag Heuer, Roger Dubuis and Richard Mille have timekeepers that will get the hearts of the elite motorsports’ fans racing.

F1 Watches

Gears, wheels, movements galore. There’s no shortage of connections between mechanical beauties worth driving and those that can be worn on the wrist.
For the Formula 1 fan, WWD picked a quartet of watches that are likely to get the heart racing thanks to innovative materials, high-flying complications and feats of engineering.
Tag Heuer Formula 1 Solargraph, From $1,800
Tag Her Formula 1 Solagraph
Courtesy of Tag Heuer

When it was introduced in 1986, the colorful Formula 1 model design broke into a landscape dominated by gray scale metallic tones and serious timekeepers, fast becoming a bestseller that sold some 3 million units for its first generations, the watchmaker’s heritage director Nicholas Biebuyck told WWD last year.

With a 38mm size and a solar-powered movement, its 2025 descendants are just as color-filled as the original and already have a cool-kid collectible feel to them.

  • Two minutes of sun exposure are enough to power the watch’s Solargraph movement for a day. Once fully charged, it has 10 months of autonomy in total darkness.
  • The life accumulator that stores the energy in the Calibre TH50-00 movement has a 15-year lifespan — 10 times longer than a traditional battery. It is hidden under the semitransparent dial.
  • Its vibrant color-filled versions are made of TH-Polylight, a new lightweight, durable bio-sourced material that has been introduced for the occasion.
Which Formula 1 fan are you? Nine colors say that motor racing isn’t your only competitive sport. When it comes to fashion, you’re up to speed, too.
IWC Schaffhausen Ingenieur 40, $12,900
IWC Schaffhausen Ingenieur
Courtesy of IWC
Marking its 70th anniversary this year, this design family is best known for the Ingenieur SL, aka “Jumbo” or reference 1832, designed in 1976 by the legendary Gérald Genta. While not a commercial success at launch — the company even dubbed it “our most brilliant failure” in a short film released after Watches and Wonders — it’s getting its movie star ending.

Originally a custom prop worn by Brad Pitt in the upcoming “F1” feature film, one of the most anticipated releases of the year, its 1,000-piece limited edition with a striking green dial has the markings of a classic.
  • The caliber 32111 is automatic with pawl winding, a 4Hz frequency and 120-hour power reserve. It has a hacking seconds hand and quick-adjust date, too.
  • The movement is encased in a soft-iron inner cage, which shields it from magnetic fields that can negatively affects the accuracy of mechanical timepieces.
  • Its glass is secured against displacement by drop in air pressure, and it is water resistant to 100 meters.
Which Formula 1 fan are you? You’re all about those racetracks where experience and a sure hand are the only way to win.
Roger Dubuis Excalibur Spider Pirelli RDDBEX0826, $81,500
Roger Dubuis Excalibur Spider Pirelli
Courtesy of Roger Dubuis
The partnership between Roger Dubuis and Italian tire manufacturer Pirelli races on. Meant as a watch for those who live in the fast lane, the design brings together the “no rules, our game” ethos of the watchmaker with a winning flair: pieces of tires that won the world’s most demanding motor races in the world are inlaid in the straps.
  • Its automatic skeleton caliber is powered by a micro-rotor positioned at 11 o’clock and reduced to its most pared-back expression.
  • This iteration takes the line’s customization possibilities a step further thanks to a patented innovative lock technology that makes changes pit-stop fast. In addition to the strap and crown’s quick release system, the bezel has a precise position alignment snaps into place with one click.
  • Only winning Formula 1 tires make the cut as watch straps and you can trace the race and driver via a code on each one.

Which Formula 1 fan are you? Staying in the lead is all about shaving seconds wherever possible, whether it’s on a track or changing styles.
Richard Mille RM 43-01 Tourbillon Split-seconds Chronograph Ferrari, From $1.3 Million
Richard Mille Ferrari Carbon TPT
Courtesy of Richard Mille
What do Charles Leclerc, Lando Norris and Lewis Hamilton have in common? Richard Mille timepieces, of course.


This million-dollar number comes in two versions, one in titanium and the other in Carbon TPT, a high-tech material that shares properties of lightness and resistance with those used in Formula 1 cars. The former has red detailing while the latter sports Modena yellow tones. And of course, there are nods to the design elements seen on Ferrari cars, giving markers and even the logo plate on the bottom left corner a distinctive silhouette.
  • The skeletonized caliber has been tested to resist shocks of over 5,000g — the highest g-force crash survived by a human clocked in at 214.
  • Just like a car’s gearbox, the function indicator allows you to see the winding, neutral and hand-setting positions as the crown is pulled out.
  • Its latest-generation split-seconds mechanism was developed by Richard Mille and movement manufacturer Audemars Piguet Le Locle, or APLL. Among its features is the tourbillon at 5 o’clock, two six-column wheels to operate the different levers of the split-seconds function, a specific clamp design and a blade instead of the traditional helical spring.

FT : Saudi-led Opec+ expands production despite falling oil prices

Saudi-led Opec+ expands production despite falling oil prices
Oil cartel agrees to add 411,000 barrels a day for the second consecutive month

Eight Opec+ members, including Saudi Arabia and Russia, announced a second consecutive monthly increase of 411,000 barrels a day for June, even as oil prices continue to slide because of fears of oversupply and economic weakness. 

The oil cartel surprised the market last month by announcing a jump in production of the same size, more than three times as much as was expected. The combination of increased Opec supply and fears that US trade tariffs will dampen the global economy saw benchmark Brent crude fall by nearly a fifth since April 2 to $61 a barrel, near a four-year low. 

The move by Opec+ to again pump more oil into a falling market marks a significant change of approach, said Jorge León, a former Opec employee now at energy consultancy Rystad.

“Opec+ has just thrown a bombshell into the oil market,” he said, adding: “Last month’s decision was a wake-up call. Today’s decision is a definitive message that the Saudi-led group is changing strategy and pursuing market share after years of cutting production.”

For the past three years, Opec+ had cut collective output by nearly 6mn b/d to bolster prices, a strategy that initially kept crude above $90 a barrel through much of 2022. But its effectiveness has waned amid tepid demand, rising US output, and lax quota discipline among members.

Tensions within the cartel have grown, particularly with Kazakhstan, which has expanded output from its Chevron-led Tengiz field and indicated it would prioritise “national interests” over group quotas.

In response, Saudi Arabia has begun to unwind production curbs, pushing for this month’s increase.

The kingdom, which had cut its own production by 2mn b/d over the past three years, has grown increasingly frustrated with shouldering the biggest portion of the cuts, while other members, including Kazakhstan and Iraq, consistently pumped above their quotas.

Saudi officials are now comfortable with bringing back supply even if it leads to a prolonged period of lower prices, according to people familiar with the kingdom’s thinking. It is unclear why Saudi, which is struggling to balance its national budget because of lower oil prices, has pivoted to the new strategy, which is likely to lead to lower oil prices for the rest of this year. 

Some analysts questioned how much oil would actually reach the market. Bjarne Schieldrop, chief commodities analyst at SEB, noted that Opec+ production in April fell by 200,000 b/d due to Venezuelan sanctions, and said the planned increases might fall short if past quota violators such as Kazakhstan, Iraq and the UAE reined in output.