FT : EU cracks down on state meddling in bank M&A

EU cracks down on state meddling in bank M&A
Twin warnings to Rome and Madrid come as Brussels steps up efforts to revive consolidation

Brussels is ratcheting up pressure on national governments to stop blocking bank consolidation, issuing twin broadsides this week against meddling by the Italian and Spanish governments in banking tie-ups.

Several commission officials told the Financial Times that warnings to Rome and Madrid were connected, as Brussels steps up efforts to encourage banking consolidation and boost the bloc’s ailing economy.

“The problem is that this is pure political posturing and the rules are clear and governments have no formal power to prevent these mergers from happening,” said one senior European official.

“The question here is who are you really competing with . . . our competitors are not inside the EU, they are outside the EU.”

The comments come after the European Commission on Monday sent a private letter to Giorgia Meloni’s government that said it had reached a preliminary conclusion that Rome had “infringed” EU merger laws through its use of golden powers in UniCredit’s €10bn takeover bid for rival Banco BPM.

Three days later, the commission slapped Spain with a “formal notice” over its move to block a merger between BBVA and Banco Sabadell for at least three years, demanding it review its decision and change laws that give Madrid the power to intervene in banking deals.

Brussels views a network of fewer, bigger banks as essential to creating a globally competitive financial sector as Europe’s financial institutions fall further behind their US counterparts, and has grown increasingly frustrated with hostility from national governments.

Europe has to “stop with the philosophy of national champions”, said Enrico Letta, the former Italian premier who wrote a landmark report on EU market integration last year.

“We have to transform these national champions into European champions, having an equal presence in different countries. We need to have the Airbus of banks,” he added.

Europe’s banking sector has experienced a flurry of attempted M&A activity over the past year. However, deals including BBVA’s offer for domestic rival Sabadell, UniCredit’s bid for BPM and its overtures towards Commerzbank in Germany have all met intense domestic political resistance.

The opposition has irritated EU officials and prompted the commission to issue rebukes to both the Spanish and Italian governments in recent weeks.

In its 55-page letter to Rome, the commission went further than a public statement on Monday in which it said Italy’s actions “may contravene” EU merger rules.

Brussels said in the letter that all five conditions imposed on UniCredit’s bid for BPM were incompatible with EU law and handed the Italian government an ultimatum of 20 working days in which to respond. Meloni’s office has said that the government would “answer the clarification requests [in the letter] in a collaborative spirit”.

The commission took particular umbrage with Rome’s argument that the deal may pose a “serious threat to public security”.

“The commission is not aware of any case — nor have the Italian authorities indicated any — of a transaction in the banking sector in the EU that has posed a sufficient and real threat to public security,” the letter said.

It added a demand by Rome that UniCredit exit Russia as a condition of the deal “infringes EU law”.

Meloni’s office said in a statement to the FT that an Italian administrative court had already recognised the legitimacy of the government’s intervention. The prime minister’s office added that the Italian court ruling stated that the government was well within its powers to impose such limitations, including the demand that UniCredit exit Russia, on national security grounds.

The commission did not respond to a request for comment on the letter.

The commission is not yet at the stage where it would take formal action against the German government, as UniCredit has not made a full-blown takeover bid for Commerzbank.

But the Italian lender has already attracted substantial opposition from the German government to its stakebuilding in Commerzbank, where in recent weeks it has started to convert derivative positions to direct equity holdings.

German chancellor Friedrich Merz on Friday said that he would oppose the tie-up unless UniCredit could satisfy him that a combined bank would not pose a significant risk to the financial system.

“It’s an unfriendly approach that we do not accept and do not support,” Merz said. “The resulting institution could, due to its balance sheet structure, pose a significant risk to the financial market. And unless that issue is clearly resolved, I will not change my position.”

Reuters : Hong Kong issues highest storm warning as typhoon Wipha approaches

Hong Kong issues highest storm warning as typhoon Wipha approaches

BEIJING, July 20 (Reuters) - Hong Kong issued its highest storm warning on Sunday as Typhoon Wipha, packing winds of more than 167 kilometres (103 miles) per hour, brought heavy rain and wind across the territory, forcing the cancellation of more than 200 flights.
The city's weather observatory raised its storm signal to No. 10 at 9:20 a.m. (0120 GMT) and said it expected it to remain at that level "for some time".

Wipha will skirt around 50 km to the south of the observatory, the warning showed. Hurricane-force wind is affecting the southern part of Hong Kong, the observatory said.

Cathay Pacific Airways (0293.HK), opens new tab cancelled all of its flights arriving or departing Hong Kong airport between 5 a.m. and 6 p.m. on Sunday. It waived ticket change fees and made arrangements for customers to re-book.
Most public transport was suspended on Sunday, including ferries amid high sea swells.

>>> Barron’s weekend Summary

Cover:
-The horse racing industry in the US is facing an existential threat due to the Trump administration's stepped-up immigration enforcement actions. The industry, which is heavily reliant on foreign-born equine workers, is particularly vulnerable to the Trump administration's actions. The Delta Downs raid, which targeted grooms, riders, and stable workers, has affected every aspect of the industry. The Trump administration has declared a national emergency due to an "invasion" of unauthorized migrants, militarized border enforcement, revoked temporary protected status for individuals from countries like Venezuela and Haiti, and stepped up arrests, detentions, and removals of undocumented immigrants.

Interview:
-Qualcomm, a wireless technology company, has been focusing on semiconductor chips since its inception in 1985. The company's president and CEO, Cristiano Amon, stated that while licensing wireless technology remains the largest component of Qualcomm's revenue, its growth engine is now semiconductor chips, which are being used in smart-watches, smart-glasses, and automobiles. Amon's strategy is focused on market diversification and technological innovation. However, Qualcomm faces challenges from U.S. companies, including tariffs announced by President Donald Trump. Despite this, shares have rebounded, and the company has no direct tariff exposure. Qualcomm's diverse supply chain produces around 20% of its chips in the US with partners like Samsung and TSMC.

Tech Trader:
-Netflix has surpassed Disney, Amazon, and Apple in the video streaming market, but is slipping behind Alphabet's YouTube. Netflix reported a 47% surge in earnings per share in Q2, and its share of U.S. viewers remained at 8.3%. However, YouTube's share of U.S. viewers increased to 12.8% from 9.9% a year earlier. Netflix creates much of its own content and relies primarily on subscriptions, while YouTube follows a different model built on user-generated content and advertising. Analysts questioned Netflix's YouTube dilemma during its earnings call, but Netflix co-CEO Ted Sarandos emphasized the company's stable market share despite the proliferation of TV-based streaming services. Both streamers come at viewers in different ways, with Netflix primarily relying on subscription sales and YouTube primarily ad-based.

The Trader:
-The market's tariff-driven rally has reached its limit, prompting investors to consider taking profits or even shorting stocks that have come too far too fast. The S&P 500 has gained 25% since bottoming on April 8, when President Trump began to dial back the most onerous tariffs proposed on Liberation Day. With trade levies no longer threatening to shut down the US economy, markets can focus on tax cuts, deregulation, and solid earnings growth. Now, the tariff troubles may be making a comeback, with Trump proposing new penalties to take effect on Aug. 1, and the Bloomberg Trade Policy Certainty Index has surged to a reading of 5.8, the highest since April 29. Shorting isn't for the faint of heart, as an individual stock can only go to zero, limit losses, and have a cost to borrow stock. Wall Street strategists provide various lists of stocks worth shorting, including stocks with below-average earnings estimates and volatile profit margins.
-Boston Scientific's stock has fallen 3% in the past six months, while the S&P 500 has risen 2.5%. This is a rare pause for the company, which has returned 23% annualized over the past five years, including reinvested dividends. Tariffs haven't helped, and a late May announcement that it will discontinue sales of its Acurate transcatheter aortic valve replacement hurt a bit. Boston Scientific has a long track record of strong growth, with analysts expecting sales to grow by 14.5% annually from 2020 through this year, driven by its cardiovascular segment. In the first quarter, the unit grew 26% year over year to $3.09 billion, helping lift total sales by 21% to $4.66 billion. New devices from Apple and Medtronic could help people track their heart health.

Features:
-The quarterly results of the largest U.S. banks, including JPMorgan, Chase, Bank of America, Citigroup, and Wells Fargo, have shown that the economy is faring better than it seems. Consumers are generally staying on top of their debt, with JPMorgan, Chase, Bank of America, Citigroup, and Wells Fargo all reporting relatively low rates of consumer delinquencies and debt they have written off as unrecoverable. JPMorgan Chief Financial Officer Jeremy Barnum said that consumer credit is primarily about the labor market, making it difficult to see weakness in their portfolio. This optimism may surprise some consumers and business owners, given the Trump administration’s tendency to generate uncertainty around international and domestic policy from the Middle East to Russia and tariffs. This lack of clarity shapes swaths of business and commerce, from the cost of buying groceries to companies' plans for expansion or layoffs.
-High-tech crooks are using artificial intelligence to make fraudulent listings nearly indistinguishable from the real deal on social-media platforms like Facebook, Reddit, TikTok, and WhatsApp. Social-media sales of counterfeit goods are almost certainly in the millions. The volume of goods seized for intellectual property violations in the US more than doubled from fiscal 2020 to 2024, with the total manufacturer's suggested retail price of goods seized for IP violations jumping 95% in 2024 alone. Goods shipped from China and Hong Kong accounted for approximately 90% of the quantity seized. A 2023 Michigan State survey found that more than two-thirds of respondents were deceived into buying counterfeits in the past year, with 68% doing so via Facebook.

Fake sellers have jumped from traditional marketplaces into users' feeds, buying advertising space or setting up profiles like legitimate companies. They also post on dedicated forums devoted to specific items, like medications, or users pool their experiences on dedicated Reddit forums, where they share tips on which vendors are reliable and which deliver high-quality fakes.

Europe:
-ASML stock fell after its downbeat message on growth next year shocked the market, with Wall Street analysts stating that the Dutch chipmaking equipment provider is not cheap enough to consider buying just yet. ASML has a virtual monopoly on lithography machines crucial for manufacturing advanced semiconductors, with key clients including Taiwan Semiconductor Manufacturing (TSM), which reported booming sales as it benefits from demand for artificial-intelligence chips. However, good times for TSMC won't necessarily translate into sales for ASML, at least in the short term. The Taiwanese company has been reluctant to commit to buying ASML's latest generation of extreme ultraviolet (EUV) lithography machines, which can cost around $400 million each. Other potential customers Intel and Samsung Electronics are dealing with problems in their own chip businesses. J.P. Morgan analyst Sandeep Deshpande warned the stock was unlikely to gain significantly until ASML can give further guidance on its 2027 prospects.

Emerging Markets:
-Investors are concerned about President Donald Trump's threat to impose 50% tariffs on imports from Brazil, citing the recent re-election of Luiz Inacio Lula da Silva. Portfolio manager Thierry Larose, portfolio manager for emerging markets local debt at Vontobel asset management, uses Lula's nickname and is cautious on the market. Equity investors agree, with the iShares MSCI Brazil exchange-traded fund selling off 5% since Trump's announcement. Brazilian assets have been on a tear this year, with stocks up by nearly a quarter and the real rising 12% against the dollar. One reason is a low starting point and the expectation that Lula will be out of office after elections in October 2026. Trump's announcement appears to be political manna for the beleaguered leftist veteran, as Brazil has little to fear economically from Washington's wrath. Exports to the U.S. account for less than 2% of gross domestic product, compared to 30% for Mexico. Trump's tariff letter mentioned trade only parenthetical.

Commodities:
-A growing number of states are considering allowing residents to use gold as legal tender instead of US dollars. Texas Governor Greg Abbott signed a bill last month to make gold and silver legal tender for purchases made in the state. The bill also instructed the state comptroller to build a digital payments platform that would allow Texans to store gold deposits and spend them with a debit card. Texas Policy Research Action, a right-leaning think tank, supports the bill. Other states like Florida and Missouri have also enacted similar laws. The idea is to allow people to use money that holds real value. No printing, no inflation. Just gold, silver, and a little modern tech. The dollar has not held its value, especially in the past few years, with inflation remaining elevated and the U.S. dollar declining 7% so far in 2025. Gold, on the other hand, has been steadily gaining in value, with its price up 28% in 2025 and 37% in the past 12 months. A recent study from State Street Global Advisors found that gold's average annualized volatility over the past 30 years was about 15%, meaning its price is likely to be up to 15% above or below its average price for the year on any given day.

Streetwise:
-Garbage stocks have experienced a soft patch in the past two months, with unprofitable U.S. companies of all sizes returning an average of 36% through the first half of this year, much more than profitable companies. However, garbage stocks, specifically those involved in the business of carting off waste, have seen a mid-single-digit percentage drop over the past two months. This is due to a dip in prices for recycled products and renewable fuel credits, as well as the defensive nature of the garbage industry. But investors value these companies for their reliable cash flows, leading to high long-term returns. Ten-year holders of Waste Management and Republic Services have made 462% and 602%, respectively, compared to 253% for the S&P 500. William Blair analyst Trevor Romeo believes that recent stock weakness offers an opportunity to buy the garbage group at an 8% premium to the market, compared to a more typical 15% to 20%.

>>> Weekend Papers Summary

FINANCIAL TIMES
-Britain's chancellor, Rachel Reeves, has blamed regulators for the decline of the financial services industry for over a decade. Reeves presented a wide-ranging package of reforms to financial services regulation, stating that the changes would mean rolling back regulation that has gone too far in seeking to eliminate risk. Many parts of the world are loosening regulatory shackles to free up "animal spirits" in financial markets and fuel economic growth. The US, where President Donald Trump's administration has criticized regulators and the rules, is at the vanguard. The Fed, Bank of England, and ECB are all reviewing capital rules for banks. Experts say these reforms are part of a boom-and-bust pattern of financial rulemaking.
-President Trump has called on billionaire Rupert Murdoch to not publish an embarrassing letter from Trump in the 50th birthday scrapbook for Jeffrey Epstein, the pedophile who later died by suicide in jail. The letter included a drawing of a naked woman with Trump's signature prominently featured. Trump's requests were unsuccessful, and the Wall Street Journal published the story. Trump later threatened to sue Murdoch and the Wall Street Journal's parent companies, filing a lawsuit against Murdoch and the paper's parent companies. Murdoch is reportedly weighing whether Trump is losing his grip on the MAGA movement over the Epstein saga.
-Donald Trump has increased his demands in trade negotiations with the EU, pushing for a minimum tariff of 15% to 20% in any deal. This move aims to test the EU's pain threshold after weeks of talks on a framework agreement that would have maintained a baseline tariff of 10% on most goods. Trump is also unmoved by the latest EU offer to reduce car tariffs and would be happy to keep duties on the sector at 25% as planned. The US administration is now looking at a reciprocal tariff rate that exceeds 10%, even if a deal is reached. The EU is in a bind as it approaches an August 1 deadline, when Trump said he will impose a 30% tariff on all its imports.
-Japanese government officials are warning companies that they would be "on their own" if they needed to evacuate staff from Taiwan in case of a Chinese attack. This warning has hit Taiwan's largest source of foreign direct investment. The warning highlights the practical and political difficulties for governments and companies in the region of preparing for a potential cross-Strait war. Beijing claims Taiwan as part of its territory and threatens to take it by force if Taipei refuses indefinitely to submit to its control. The US military has been discussing operational plans for such a scenario with its allies, but obtaining political commitments has proven more challenging.
-Fred Goodwin, the former head of RBS, has been portrayed as a villain or megalomaniac in the past 17 years. Born in Ferguslie Park, Scotland, Goodwin attended Paisley Grammar and pursued his dream of building the world's largest bank. RBS rose to prominence and was knighted in 2004 for services to banking. However, in 2008, markets collapsed, leaving RBS exposed. The UK government nationalized the bank, leading to Goodwin's resignation and later his knighthood. The tragedy lies in the question of human agency, whether Goodwin was a victim of forces beyond his control, whether cheap money and regulatory flaws fueled irrational behavior, or if individual character failings and corporate culture were responsible for recklessness.
-Israeli Prime Minister Benjamin Netanyahu has contacted Pope Leo to address the aftermath of an Israeli strike that killed three Palestinians in a Gaza church, prompting a public rebuke from the White House. The attack occurred after fragments from a shell fired during operational activity hit the church mistakenly. The US has demanded an investigation, while Cardinal Pierbattista Pizzaballa, the highest-ranking Catholic official in Jerusalem, stated that none of the estimated 600 people sheltering in the church believed it was a mistake.
-The global cryptocurrency market has reached $4T for the first time, with investors anticipating billions of Wall Street dollars entering the sector after US digital asset legislation. Bitcoin's price reached a record high of over $123,000, while other tokens like ether and Solana's sol also rose. The Genius Act, passed by Congress, regulates stablecoins pegged to sovereign currencies, typically the US dollar. Separate rules overseeing digital asset market structure and banning central bank digital currencies are still pending Senate approval.
-German Chancellor Friedrich Merz has criticized the right-wing campaign against liberal judge Frauke Brosius-Gersdorf, whose nomination for the country's highest court has led to a crisis in his ruling coalition. He referred to the backlash from conservative MPs within his Christian Democratic Union (CDU) party as "massive personal defamation". Merz defended his coalition with the SPD, stating that the situation could have been handled better. The debacle has raised concerns that Germany is embracing US-style culture wars by politicizing a process that has historically been unremarkable.
-Brazilian police have raided the home of former president Jair Bolsonaro, ordering him to wear an ankle tag and banning him from social media. The move comes amid a confrontation with US President Donald Trump, who has threatened Brazil with 50% tariffs from August 1. Trump has accused Brazil's supreme court of censorship and unfair trade practices. Brazil's top court ordered a curfew for Bolsonaro, 70, and seized his mobile phone and $14,000. The Brazilian supreme court has sped up Bolsonaro's trial, and he is likely to pass sentence next month. The dispute between the two largest nations in the Americas intensified after US secretary of state Marco Rubio announced a visa revocation against the Brazilian Supreme Court.
-The rise in unemployment among recent college graduates has raised questions about the value of college education and the role of AI. However, the headline trend is largely concentrated among young American men, highlighting the importance of understanding the nuances of the situation. This highlights the need for more targeted strategies to address the issue of graduate unemployment.

NEW YORK TIMES
-President Trump has directed Attorney General Pam Bondi to request a federal judge to release grand jury transcripts related to the 2019 indictment of Jeffrey Epstein for sex trafficking. Bondi has filed two petitions in the Southern District of New York, asking federal judges to unseal grand jury transcripts from Epstein's case and the prosecution of his longtime associate Ghislaine Maxwell. However, this request falls short of demands by Trump's critics to release all government files on Epstein, who died in federal custody while awaiting trial.
-Donald Trump has denied a report in The Wall Street Journal that he sent a sexually suggestive drawing to Jeffrey Epstein in 2003. Trump argued that he does not draw pictures, but a review of his past reveals that he was a high-profile doodler for years. In the early 2000s, he regularly donated drawings to charities in New York, often using a thick, black-marker and prominently featuring his signature. The drawings, which often sold at auction, are similar to the birthday note he sent Epstein. Trump's alibi for not drawing pictures is "I don't draw pictures."
-President Trump has long criticized federal judges who rule against his agenda, calling them "USA-hating judges" and calling for their impeachment. He has also questioned the constitutional role of courts as a check on the presidency. However, in the case of Jeffrey Epstein, Trump has taken a different stance, stating that judges have an important role in deciding whether and when grand jury materials related to Epstein's indictment for sex trafficking can be released to the public. He has asked Attorney General Pam Bondi to produce any and all pertinent Grand Jury testimony, subject to Court approval. Benjamin Wittes, chief editor of Lawfare and a fellow at the Brookings Institution, argues that the idea that a judge should make the final decision about the release of grand jury testimony is normal criminal procedure.
-Over 100 people remain missing in Texas, two weeks after the devastating floods that claimed at least 135 lives. The number of people unaccounted for has dropped this week, but some searchers are losing hope of finding them. The military presented an American flag to firefighters and relatives of Michael Phillips, the chief of the volunteer fire department in Marble Falls, who is among those missing from the floods. Since then, her hope has waned for her father, Michael Phillips, who is the chief of the volunteer fire department in Marble Falls. Despite the efforts of searchers, the number of people still missing statewide remains high.
-The Trump administration's immigration crackdown is straining the long-term care workforce, raising concerns about its impact on the senior population. Nursing homes and home care agencies are losing staff members due to the end of deportation protections for migrants with temporary legal status. Critics argue this has allowed migrants to stay longer than intended and restores immigration system integrity. Providers are also facing challenges in recruiting workers, potentially compromising service quality. Some may raise wages and pass on cost increases to patients.
-The Environmental Protection Agency (EPA) has announced plans to eliminate its scientific research arm and dismiss hundreds of scientists, including chemists, biologists, and toxicologists, following months of denial. The move reflects the Trump administration's push to cut the federal workforce and dismantle agencies, with government scientists being a key target. The decision to dismantle the E.P.A.'s Office of Research and Development was expected since March, but the Trump administration maintained no final decisions had been made. The science office provides independent research that underpins most agency policies and regulations.
-The Democratic National Committee (DNC) is conducting an audit of the 2024 election, focusing less on the Biden and Harris campaign and more on actions taken by allied groups. The audit, called an "after-action review," is expected to avoid questions about whether former President Joseph R. Biden Jr. should have run for re-election, whether he should have exited the race earlier, and whether former Vice President Kamala Harris was the right choice to replace him. The review is not expected to revisit key decisions by the Harris campaign, such as framing the election as a choice between democracy and fascism and refraining from hitting back after an ad by Donald J. Trump memorably attacked Ms. Harris on transgender rights. The draft document is described as focusing on the 2024 election as a whole, not on the presidential campaign.
-After the Assad government's collapse, many Syrians sought to find their loved ones who had disappeared under the regime. However, in Lebanon, many were left to wait and watch. Thousands of Lebanese people went missing during Syria's occupation from 1976 to 2005, and many were believed to be imprisoned in Syria. The security state of al-Assad extended beyond Syria's borders, ensnaring political opponents and civilians. The mukhabarat, secret police in Damascus, ran detention sites across Lebanon and transported suspects across the border to prisons like Sednaya. Lebanese officials estimated that over 700 of their citizens were still imprisoned in Syria, but some advocacy groups claim more are unaccounted for.
-Russia's summer offensive in Ukraine is gaining ground, with Russia's forces attacking multiple fronts. Analysts believe Russia aims to methodically destroy the Ukrainian military, as Moscow advances its own troops. The biggest challenge for Moscow may be far from the front lines, as the Russian economy can't keep up with escalating military spending. Ukraine's ability to sustain the war may be decided far away, as the Trump administration sends mixed signals about continuing arming Kyiv's forces.

NEW YORK POST
-Pope Leo XIV has declared the 2007 recovery of a premature baby, Tyquan Hall, at a Rhode Island hospital a miracle, credited to a physician's prayer. Tyquan was born via emergency cesarean section and suffered from oxygen deprivation. Doctors did not expect him to survive. After a desperate plea, Tyquan's heart began to beat normally without medical intervention. Despite the inexplicable recovery, Tyquan was expected to have serious neurological damage due to the severe lack of oxygen in his first hours.
-Taxi tests are underway on the X-59 supersonic plane, designed to break the sound barrier and reduce flight time between New York and London by half. The experimental aircraft, dubbed the "son of Concorde," taxied on a California runway at low speed using its own power for the first time on July 10. Ground maneuvers at the US Air Force's Plant 42 in Palmdale mark the final series of trials for the 100-foot-long, 30-foot-wide jet before its maiden voyage, which is slated for some time this year. The high-tech plane, unveiled by NASA and Lockheed Martin last year, is the centerpiece of the QueSST mission to produce a quieter sonic boom for communities below and revolutionize air travel, potentially cutting transit time down significantly for commercial flights.

The Information : Nvidia’s China Restart Faces Production Obstacles

Nvidia’s China Restart Faces Production Obstacles

The Takeaway
• Nvidia has told Chinese customers it has limited supplies of H20 chips
• Company doesn’t plan to restart production
• Supply constraints could also limit availability of upgraded H20 version

President Donald Trump’s recent decision allowing Nvidia to resume sales of the H20 artificial intelligence chips to China sent its Chinese customers—mostly big tech firms like ByteDance and Alibaba—into a frenzy to snap up chips before the U.S. administration changes its mind again. Nvidia’s message: not so fast.

The AI chip giant has told its customers it has only limited stocks of the H20 chips—the most powerful AI chip it had been allowed to sell to China under U.S. export restrictions, according to three of Nvidia’s Chinese customers. And right now, Nvidia doesn’t plan to restart production.

Nvidia’s stance underscores the business complications stemming from the Trump administration’s policy flip-flops on international trade, particularly when companies are dealing with severe supply chain constraints.

The U.S. government’s April ban on sales of the H20 chips forced Nvidia to void customer orders and cancel manufacturing capacity it had booked at Taiwan Semiconductor Manufacturing Co., which makes the chips, according to two people with direct knowledge of the order cancellation.

Reversing those moves won’t be easy. TSMC’s facilities are running at full capacity, and the company has shifted its production lines used for the H20 to other chips for other customers, the two people said. Manufacturing new chips from scratch would take nine months, CEO Jensen Huang said at a media event in Beijing this week.

As a result, Nvidia will only fulfill orders until it uses up its existing stocks. The company had written off $4.5 billion related to “excess inventory” in the first quarter as a result of the ban. It has told customers it has no immediate plans to restart wafer production for the H20.

Nvidia and TSMC declined to comment.

Nvidia’s stance shows how supply chain hiccups could hinder the company’s ability to fully capitalize on the opportunity to return to the lucrative Chinese market in the near term. China accounted for 13% of Nvidia’s revenue in the year to January, although it was higher in the past—21% in fiscal 2023—before steadily expanding export restrictions reduced what Nvidia could sell to China.

Its H20 inventory includes chips that are ready to ship as well as wafers in production. Wafers are thin, circular slices of silicon that can be diced into hundreds or thousands of chips. It typically takes one to two months to package the chips with other components, then up to another two months for server makers to assemble the package on motherboards and servers.

The immediate production capacity limitations are not the only difficulties confronting Nvidia as it looks to resume business in China.

The Santa Clara, Calif.–based company had been working on an upgraded version of the H20 before the April ban. That upgraded H20 features advanced high-bandwidth memory chips, which are mainly supplied by SK Hynix. The South Korean company this week informed Nvidia it would have limited capacity to supply additional advanced memory chips for use in the upgraded H20 if Nvidia orders more, according to two people involved in the communications. It’s also unclear whether the government’s authorization of H20 sales extends to the upgraded version. SK Hynix declined to comment.

Last year, Nvidia was developing another offering for the Chinese market based on its latest Blackwell architecture. That offering isn’t allowed under current U.S. export rules, but Nvidia is expected to lobby for permission to sell more advanced chips over time. Its other customers elsewhere in the world have mostly moved over to Blackwell chips.

Nvidia has been speaking with some of its largest Chinese customers in recent weeks to learn about their specific chip requirements—such as how many H20 and future Blackwell chips they hoped to buy. Nvidia has also been asking for feedback on the H20, as well as suggestions for improvements for any next-generation products, according to two Nvidia employees.

The communications will help Nvidia decide whether to commit to more H20 orders or focus on lobbying Washington to allow it to offer more powerful China-tailored chips based on the Blackwell architecture so it can compete against local rivals such as Huawei Technologies.

WSJ : A Mystery in the High-Yield Muni Market: What Are the Riskiest Bonds Worth

A Mystery in the High-Yield Muni Market: What Are the Riskiest Bonds Worth?
Junk-bond prices are ‘written in pencil, not pen’


When a tiny mutual fund dumped bonds recently, the low prices it got affirmed an alarming reality for investors in risky municipal debt: Many securities turn out to be worth less than shareholders have been told.

Shares of Easterly Asset Management’s high-yield muni fund in early June cost about $6, based on Easterly’s estimated value for each bond in the fund. But many of those bonds hadn’t traded in years. And when Easterly began rapidly selling some last month, buyers weren’t willing to pay nearly the amount fund managers had estimated.

An Easterly spokeswoman said true price discovery is only possible when bonds trade in the market.

Following the sales, the Easterly fund’s share price tumbled to around $3. That is a startling move—even for junk debt—in the relatively staid world of muni bonds, the debt of state and local governments. Investors generally prize munis for their stability and frequently tax-free interest payments. Easterly’s experience left some asking how many more rude awakenings that market will have.

Many deals in the $400 billion muni junk-bond market date to a time when money flowed so freely that investors bought up parody cryptocoins and a Reddit-fueled GameStop-buying spree caused trading halts at the New York Stock Exchange. Now investors in high-yield muni funds face the question of what in their portfolio belongs to that class of highflying investments—and how bad the fallout will be.

A popular bet…
Ownership of high-yield muni funds is at near-record levels, according to LSEG data. Investors flush with market gains piled back into low-rated and unrated muni bonds last year, after steering clear while rates were climbing.

>
…from an earlier time
The funds’ truly explosive growth, however, occurred from about 2016 to 2021, when an unprecedented wave of investor cash fueled a prepandemic borrowing frenzy. Fund managers with piles of cash to put to work financed all manner of projects.

Some weren’t ready for prime time. Artifacts from that era include a default-plagued New Jersey megamall with an indoor ski slope and a 280-acre Arizona sports park developed by a father-son team who this spring pleaded guilty to fraud and identity theft.

Billions of dollars worth of such shaky one-off projects now sit in high-yield muni funds. Managers in offices hundreds of miles away from the projects are left with the tricky task of deciding what value to assign to their bonds. All they have to rely on sometimes are long-ago trades, price data from industry bond-evaluation services and their own research. There is plenty of room for disagreement.

Questions in Texas
A Texas bond from Easterly’s portfolio is a good example. The Buckingham, a luxury senior-living community in Houston, has been struggling financially for years. Since 2023, the bond has been trading—in relatively small quantities—at 12 cents on the dollar or less.

But mutual-fund managers Nuveen and Invesco assigned a significantly higher value to the bond when they last reported their high-yield fund holdings on May 31. The two funds valued it at 35 cents and 36 cents on the dollar, respectively, according to a Journal analysis of Morningstar Direct data. Last month, the bonds’ biggest trade in years—about $11 million—priced it at about 7 cents.

A Nuveen spokeswoman said the firm’s valuation of the Buckingham bond is based on information only available to investors involved in a debt restructuring. Nuveen is known for maximizing recoveries in distressed situations, the spokeswoman said.

Other bonds Nuveen and Invesco had in common with Easterly traded at 20 or more cents lower than where fund managers had valued them. Those managers’ high-yield funds are so big and diversified, though, that any hit to their share price is likely to be imperceptible.

Different challenges
Not all muni junk bonds are so hard to price. Distressed city and county bonds trade frequently and are backed by taxes and monitored by ratings firms. But many high-yield muni bonds finance one-off projects whose organizers plan to repay bondholders with the money they expect to make. Local government officials allow such projects to sell munis based on the idea that they could aid economic development or some other public good. The bonds are often held by just a few asset managers and frequently go years without trading.

Funds full of hard-to-trade junk bonds sometimes have to make quick moves to stay compliant with federal securities rules aimed at ensuring sufficient liquidity. A common reason for fire sales like Easterly’s is to avoid running afoul of those regulations.

Returns have lagged behind for both junk and high-grade munis recently. States and cities running low on cash borrowed heavily over the past two years, pumping up supply. President Trump’s tariff broadside walloped the overall bond market. Then this month prices plummeted for a multibillion-dollar high-yield project—a trainline through Florida—after it said it was deferring an interest payment.

High-yield muni mutual-fund shareholders might not always realize how much art—rather than science—goes into pricing some high-yield bonds, said Matt Fabian, a partner at research firm Municipal Market Analytics. Mutual funds update their share prices daily.

“The prices that individual investors get on their muni-bond account statement are good approximations,” he said. “But you have to think about those as written in pencil, not pen. You only have a very rough idea of what they might be worth.”

SCMP : Chinese army scientists propose a super X-rail gun much more powerful tha

Chinese army scientists propose a super X-rail gun much more powerful than the navy’s
China’s plan to create electromagnetic weapon will double the force of the world’s first rail gun

The Chinese navy’s rail gun has shocked the world. It was mounted on a ship as early as 2018 – the first ever on the planet – and was widely viewed as a coup for China’s future weapon technology.
But power has become its curse. When the current is too strong, metal liquefies. Shells are capped at 15kg (33lbs).

It is too light to sink a ship. Too weak for war. Now the army has stepped in. Their solution: cross-stacking two rail guns into one.
This will nearly double the force. As bore pressure jumps, shells can hit 30kg at Mach 7, according to the project team led by Professor Lyu Qingao, associate professor with the Army Engineering University of PLA in Shijiazhuang.

“While the navy’s electromagnetic rail gun has resolved power supply challenges, its firing power still falls far short of the targets,” wrote Lyu and his colleagues in an April paper published in the Journal of Army Engineering University of PLA.
“This has hampered the technological advancement and military application of electromagnetic rail guns.”

Breaking the limit on rail gun power is not easy. Excessive current bites into the U-armature’s throat, melting aluminium. Magnetic fields rip the melted armature apart like a magnetic saw. Rails can also be scarred.

This traps the shell momentum to a fraction of the needed punch.

The army scientists said their twin-gun design can fix the problem.

Two U-armatures are crossed in an “X-shape”, bolted with insulation. Four rails square the bore (200 x 200mm), with two independent power circuits.

Simply put, they stack two rail guns vertically on top of each other in one barrel.

“Vertical fields ignore each other,” they wrote.

This unprecedented design can boost a rail gun’s power with “proven tech”, according to the researchers.

Their target is to accelerate a 60kg shell to 7.2 Mach. It can hit a target 400km (248 miles) away in six minutes, with impact speed exceeding Mach 4.

They filed a patent, “electromagnetic rail gun with X-shape armature”, last year in China.

But the X-rail gun has no live fire yet. And some challenges remain.

“Both armatures are driven by their respective electromagnetic forces. These two forces operate nearly independently, jointly propelling the projectile to accelerate and enabling the launch of the high-power electromagnetic rail gun,” Lyu’s team wrote.

“However, the close proximity of two mutually perpendicular current circuits may cause minor variations in current distribution within conductors – manifested as the proximity effect.”

The United States has quit the rail gun race, while Japan is testing a small-calibre prototype on a ship firing 300-gram shells.

SCMP : Chemotherapy can speed up cancer spread, Chinese study finds

Chemotherapy can speed up cancer spread, Chinese study finds
Common treatment can wake up dormant cancer cells, causing the disease to spread from original sites to other organs, team discovers

A team of Chinese scientists has found that the spread of cancer from original tumour sites to distant organs can be caused by chemotherapy triggering the awakening of dormant cancer cells.
Their findings shed light on why breast cancer patients can experience cancer metastasis in organs like the lungs despite successful treatment of their primary tumours.

The team also found that the use of specific drugs in combination with chemotherapy could be used to inhibit this process in mice, and a clinical trial is already under way in breast cancer patients.

“We demonstrate that chemotherapeutic drugs, including doxorubicin and cisplatin, enhance proliferation and lung metastasis of dormant breast cancer cells,” the team wrote in a paper published in the peer-reviewed journal Cancer Cell on July 3.
“This study provides direct evidence of dormancy awakening and reveals a mechanism underlying [the] detrimental effect of chemotherapy on metastasis, highlighting potential strategies to improve cancer treatment.”

Researchers in the United States previously found that high doses of radiation therapy to treat cancer could paradoxically lead to the growth of metastatic tumours.
Many patients who undergo chemotherapy to treat primary tumours, the original tumour site in the body where cancer cells first start to develop, can have cancer relapses in other organs even after complete primary tumour regression.

This has led to research into whether chemotherapy can have a similar paradoxical effect, in which it both treats primary tumours and triggers cancer metastasis.

“It is postulated that the reactivation, or awakening, of dormant disseminated tumour cells (DTCs) in distant organs results in metastatic relapse after the asymptomatic period,” the team said.

Studies have shown that disseminated cancer cells, which travel from primary tumours to sites in the body, can be found even during the early stages of primary cancer formation, according to a news release by the Chinese Academy of Sciences (CAS).

These cells can stay in a dormant state for years, during which they do not grow and multiply, allowing them to evade chemotherapy.

Researchers have previously identified molecular mechanisms that regulate metastatic relapse and disseminated cancer cell dormancy. However, it has not been clear whether metastasis results from the reactivation of dormant cells or the growth of rare, non-dormant disseminated cells.

“Understanding the exogenous causes of DTC awakening will help disease management of cancer survivors, offering opportunities to prevent and interrupt metastatic relapse after initial therapies,” the researchers said in their paper.

To study this, the team led by Hu Guohong, a professor at CAS’ Shanghai Institute of Nutrition and Health, along with researchers from Fudan University and Qilu Hospital of Shandong University, developed a cancer cell dormancy tracing approach.

The team confirmed that chemotherapy-induced reactivation of dormant cells from breast cancer could lead to metastatic relapse in the lungs of mice.

Their findings demonstrated that the “awakening of dormant DTCs, but not accumulation of pre-existing proliferative DTCs, is responsible for metastases induced by chemotherapy”.

Chemotherapy induces senescence – an accelerated state of ageing in which cells stop multiplying and release inflammation-causing chemicals – in specialised connective tissue called fibroblasts.

The team found that senescent fibroblasts release proteins that cause immune cells called neutrophils to form weblike formations, called neutrophil extracellular traps, which change the environment in the lung into one that helps dormant cancer cells restart their growth.

The remodelling of the extracellular matrix, a complex network of molecules that support and surround cells, also degrades tumour-suppressing factors.

“We explored if chemotherapy-induced senescent fibroblasts could be a therapeutic target to improve the effect of chemotherapy on metastasis inhibition,” the team said.

The researchers discovered that combining senolytic drugs, which eliminate senescent cells, with the chemotherapy drug doxorubicin reduced senescent fibroblasts in the lungs of mice.

“Since the senolytics have shown acceptable safety profiles and benefits in clinics, this could be a promising strategy and warrant further clinical investigation,” they said.

The team said that, based on these study results, a phase II clinical trial was under way to explore the safety of combining the senolytic drugs dasatinib and quercetin with chemotherapy to treat triple-negative breast cancer.

Triple-negative breast cancer is an invasive and aggressive form of the disease that cannot be treated with the usual hormone therapy used to help treat such cancers.

WWD : With Sales Improving Worldwide, CEO Josh Schulman Is Bullish on the Future

With Sales Improving Worldwide, CEO Josh Schulman Is Bullish on the Future of Burberry
"We're taking things step by step, but we are optimistic about the business in general," said Schulman following Burberry's first-quarter results, which outstripped market expectations.

LONDON – From colorful scarf bars in stores to campaigns featuring the Jagger clan and VVIP events stretching from Highgrove to the Flamingo Estate, Burberry’s charm offensive is working, with sales improving worldwide despite the tough environment for luxury.

The company has successfully stemmed the double-digit sales declines of the past year and outstripped growth expectations for the first fiscal quarter.

In the three months to June 30, it reported 433 million pounds in retail revenue, a 6 percent drop at reported exchange, and a 2 percent decline at constant rates.

Comparable store sales were down 1 percent, compared with analysts’ projections of a 3 percent decline. In the corresponding period last year, comparable store sales were down 21 percent.

Perhaps no one is more surprised than chief executive officer Josh Schulman who joined Burberry last July.

“If you had asked me 12 months ago where we would be today, I wouldn’t have imagined the amount of progress that this exceptional team has been making,” said Schulman, adding that brand desirability is also on the rise due to Burberry’s focus on “timeless British luxury.”

He added: “It’s early days, and it’s a tough macro, but we are really starting to see the potential of what lies ahead. We’re taking things step by step, but we are optimistic about the quarters ahead and optimistic about the business in general.”

Schulman, who has been broadening the price points and appeal of the brand, said the metric he’s “super excited” about is conversion, the ability to turn window shoppers into paying customers. “Our conversion is up across the world — very significantly — and we’re doing so in a tough luxury market,” he said, adding that local customers have been outspending tourists worldwide.

The positive news caps a tough year for Schulman, who is hoping to restore Burberry to its golden days of 3 billion pounds in revenue and an operating margin in the high teens.

As reported in May, the company unveiled an enriched cost-savings plan that could see 20 percent of its workforce eliminated by 2027. The plan is aimed at unlocking 100 million pounds by fiscal 2027, in addition to 40 million pounds revealed last year.

Burberry plans to cut mainly office-based jobs, and will reorganize the schedules of its shop floor staff so they are working during peak traffic hours.

The company is also eliminating the night shift at its factory in Castleford, Yorkshire, where the signature gabardine trenchcoats are made. Around 25 percent of staff will be impacted.

The turnaround is taking shape, although Schulman and analysts said it’s still early days.

Bernstein called Burberry’s first-quarter performance “decent, particularly in the context where French and Italian peers are expected to shrink by negative” high-single-digit to double digit, when they report earnings later this month.

“More importantly, company commentary indicates early signs of brand reignition,” said Bernstein, adding that “the sequential improvement in same-store sales — against a most difficult environment — suggest that things are starting to work.”

The bank also believes that Burberry has a “more realistic pricing approach in leather goods,” which should help fuel growth going forward.

Deutsche Bank noted that Burberry’s shares are up 27 percent so far this year, “significantly outperforming both larger peers [including LVMH and Hermès] and turnaround peers [Kering and Ferragamo].”

Citi looked farther ahead, speculating that Burberry’s underlying retail sales “could turn positive” in the second fiscal quarter for the first time in two years.

The “execution is on track, with new [fall and spring] collections and a wider pricing architecture delivered to stores over the next three quarters to reignite brand desirability,” Citi said.

Friday’s first-quarter news sent the share price up more than 6 percent to close at 13.27 pounds.

There is even talk that Burberry could rejoin the FTSE 100 index when the London Stock Exchange undertakes its next quarterly review in September.

Burberry fell out of the index, which includes the biggest companies by market capitalization, last September following a 50 percent decline in its share price in the months leading up to the review.

In the first three months, Schulman said growth came from “sequential improvement” across all regions, thanks chiefly to more enthusiastic local customers.

The Americas rose 4 percent, followed by EMEIA, or Europe, the Middle East, India and Africa region, which rose 1 percent. Greater China was down 5 percent, while Asia Pacific fell 4 percent.

Kate Ferry, Burberry’s chief financial officer, said the performance in the Americas, which represents around 19 percent of overall sales, was particularly interesting.

“We actually saw new customer numbers growing in the region, as well as returning customers. We’re seeing a much broader range of customers in America, too, which is good,” she said.

She and Schulman stressed that Greater China, which represents 30 percent of sales, has been showing quarter-on-quarter improvement, with sales coming from locals rather than tourists, in line with the overall trends in Asia-Pacific.

Ferry added that “traffic in the luxury market is challenging everywhere, and tourism is certainly down, but our team in China are really encouraged by all they are seeing. Overall, it’s sequentially improving and it remains a really important market for us. We are really, really excited about the future of China,” she said.

Worldwide, bestsellers in the three months included outerwear, particularly lightweight jackets, and items with check trims or with the Burberry Prorsum Knight stamp. In the shoe category, wellies and pool slides also had a strong response from customers as well, Schulman said.

Summer products have been selling at places including The Newt, a 2,000-acre working farm and luxury hotel and spa in Somerset, England. Burberry created a custom check pattern for the hotel as part of a summer partnership, and has been selling swimwear, outerwear, hats, scarves and umbrellas at the boutique.

Burberry has also done a takeover of The Standard in Ibiza, whipping up its signature check in yellow for parasols, loungers and cushions. There’s also a big Burberry logo at the bottom of the swimming pool.


The brand is working with The Standard’s rooftop bar and restaurant, doing weekly Burberry-curated cocktail evenings, soundtracked by guest DJs spinning from a custom-built booth.

For the VVIPs there were trips to the gardens at Highgrove, King Charles’s private home in Gloucestershire, following a collaboration with the estate on a 28-piece capsule collection.

In the U.S., Burberry invited big-spending customers to the launch of the Highgrove collection at the Flamingo Estate, the working farm turned high-end lifestyle destination in Los Angeles.

As the glamorous campaigns and events continue to roll out, there is steady work going on behind the scenes, and in the Burberry C-suites worldwide.

As reported in May, Schulman decided not to fill the role of chief commercial officer and to do the job himself, with Burberry’s regional presidents reporting directly to him.

On Friday, along with the first-quarter announcement, Burberry said the four regional presidents will join the executive committee and take part in relevant decision-making, strategy and operations.

They are Claudia Kim in Asia-Pacific; Frank van Loon in EMEIA; Josie Zhang, in Greater China, and Laura Dubin-Wander, in the Americas.

Schulman said the move is meant to align leadership and decision-making more closely with the end-customer. Schulman said the regional presidents’ “market insights and deep customer knowledge are invaluable, and I look forward to continuing to work closely with them to drive” the Burberry Forward strategy.

Looking ahead to the full 2025-26 year, Schulman said the transformation is not like “turning on a light switch” and will take time.

“It is a multiyear plan with the aim of re-grounding the brand in a timeless British luxury expression. There’s so much storytelling that we can do, and we will continue to execute our product strategy, leading with outerwear, earning our authority in other categories, and getting the product and marketing right to appeal to the broad universe of luxury customers.”

Although the company did not comment on the second quarter performance, it said the plan was to prioritize investment and deliver margin improvement “with a continued focus on simplification, productivity and cash flow. We remain confident that we are positioning the business for a return to sustainable, profitable growth.”

CrunchBase : Startup M&A Crests Higher In First Half Of 2025

Startup M&A Crests Higher In First Half Of 2025

So far, this has been a pretty good year for startup acquisitions.

Acquirers made just over $100 billion worth of disclosed-price startup purchases in the first half of 2025, per Crunchbase data. That’s a whopping 155% increase from the same period last year, showing buyers are increasingly willing to write big checks for sought-after companies.

Notably, roughly a third of this year’s total comes from a single deal: Google’s planned purchase of cybersecurity unicorn Wiz for a record-setting $32 billion. But there were other startups selling in multibillion-dollar acquisitions as well, including device designer Io and automation software provider Moveworks.


Dealmaking gets more frenetic
Deal count, meanwhile, has held steadier, with the number of announced acquisitions hovering in the mid-400s for the past three quarters. The number of M&A deals tends to be less influenced by market conditions, since buyers are inclined to go bargain hunting during down cycles and compete aggressively for hot companies during bullish ones.

Lately, the ambience leans more frenetic, particularly as pertains to AI. This was evidenced this past week, with the drama around AI coding provider Windsurf. The startup was about to sell to OpenAI for $3 billion until Google made a deal to hire its CEO and co-founder, Varun Mohan, and pay $2.4 billion for compensation and licensing.Then on Monday, AI startup Cognition announced it would acquire Windsurf.

AI was also the draw for the largest Q2 deal, OpenAI’s $6.5 billion acquisition of Io, a design startup co-founded by Jony Ive and focused on AI-powered devices.

Even with all the excitement around AI, however, the majority of M&A spending this year hasn’t gone to the space. Per Crunchbase data, only around $15 million of disclosed-price acquisitions were for AI startups in the first half of this year. (However, that excludes Wiz, which isn’t classified as an artificial intelligence company but does list AI security as one of its focus areas.)

Biggest H1 M&A deals
So where is M&A spending concentrating?

To get a sense, we used Crunchbase data to aggregate a list of 13 of the largest acquisitions in the first half of this year.


As shown above, besides AI, enterprise software fared well. Top deals in the space include Moveworks’ $2.85 billion acquisition by ServiceNow, as well as accounts payable platform Melio’s $2.5 billion sale to Xero.

In the healthcare space, electronic health record software provider Modernizing Medicine delivered one of the biggest outcomes, selling a majority stake to private equity firm Clearlake Capital Group at a reported $5.3 billion valuation.

Smaller and stealthier deals add up
The vast majority of startup acquisitions don’t have a disclosed price. But they can add up.

Oftentimes, these deals involve large-cap acquirers and well-funded startups. Examples from 2025 include Stripe’s acquisition of crypto wallet startup Privy, Snap’s purchase of school scheduling app Saturn Technologies, and Zscaler’s acquisition of cloud security startup Red Canary,

It helps acquirers that, four years after the venture funding peak in 2021, there’s still a large pipeline of funded companies taking a serious look at exit options. If current trends continue, we should see a growing number of them accomplishing that goal through M&A.