TheChek News Flow

Misery loves company, as they say. Friday’s announcement that two of the three biggest cable-broadband firms, Charter Communications and Cox Communications, are combining is a logical next step in the consolidation of a stagnant but still significant industry. Charter, whose biggest shareholder is controlled by aging cable magnate John Malone, is buying Cox Communications for $34.5 billion in cash, stock and assumption of debt. The resulting company, which will take the Cox name, will be by far the biggest cable-broadband company in the U.S., ahead of Comcast, which is now roughly equal to Charter in subscriber numbers.

Why should you care? Sure, if your focus is growth, then Charter, Cox and Comcast are yesterday’s companies. Malone, a star media dealmaker of the 1990s and early 2000s, is all but retired (the man once called the “Darth Vader” of cable last year gave up his nonvoting director emeritus position on Charter’s board). But the big cable companies are still the primary source of internet access for many, if not most, Americans, which makes them a little like the water company—a service people only think about when it doesn’t work. That makes their financial health important, given that they need to maintain the pipes that carry the internet to people’s homes and businesses.

The backdrop is instructive. Cable’s original business of selling packages of TV channels has shrunk to a shadow of its former self. Selling internet access, which replaced TV as the industry’s growth engine, has peaked. In fact, Charter and Comcast have lately started losing internet customers, as phone companies like Verizon and T-Mobile have ramped up their internet-at-home services. The cable guys’ growth business now is selling mobile phone service, although they’re doing so by renting Verizon’s cellular network—even as they compete with Verizon and others for customers! The end result is that revenue growth in the past couple of years has been anemic for everyone in the industry, including the phone companies.

Charter’s recent financial performance highlights the industry’s challenges. Its free cash flow shrank 30% between 2022 and 2024 as capital expenditures jumped while cash generated from its operations fell. To be sure, before this deal, Charter had forecast that its capex would start declining after this year, as big network upgrades come to an end. But the business is always going to be a capital-intensive one, which isn’t ideal given the lack of growth. Moreover, integrating Cox will eventually require some capital investment, Charter executives acknowledged Friday.

The Cox acquisition creates some opportunities for growth. Cox, a smaller company by customers than Charter, hasn’t made anywhere near the inroads into mobile phone service that Charter has, for instance. Charter can change that. Its management hasn’t given up on rejuvenating sales of TV service, either, a business from which Cox has almost disappeared (it has only 1.7 million TV customers compared with 5.9 million broadband subscribers). Charter stock rose 1.8% in response to the deal. The only question is, how long can Charter eke out the gains from this combination?

It was a big week for health and fintech funding, with companies in these sectors securing a majority of slots in the top 10. In total, there were seven rounds of $100 million or more, mostly skewing later-stage.

1. Pathos, $365M, AI drug discovery: New York-based Pathos, a startup using AI technology to develop precision medicines, raised $365 million in Series D financing at a post-money valuation around $1.6 billion. With the new financing, Pathos says it plans to build out its foundational model with a focus on oncology.

2. Addepar, $230M, financial services: Investment platform Addepar locked up $230 million of Series G funding in a round led by Vitruvian Partners and WestCap. The New York company says clients currently use its platform to manage and advise on more than $7 trillion in assets, up from $5 trillion a year ago.

3. Stord, $200M, e-commerce: Atlanta-based Stord, a provider of e-commerce software, fulfillment, warehousing and transportation services, raised $200 million in a combination of Series E equity funding and debt financing. Strike Capital led the equity financing, while Silicon Valley Bank, a division of First Citizens Bank, and Orix USA provided the debt facility.

4. Stash, $146M, personal finance: Stash, a consumer-focused automated investment and investing advice platform, raised $146 million in a Series H round led by Goodwater Capital. The New York company plans to use part of the proceeds to build out its Money Coach AI, a financial guide that “translates expert-level investing strategies into real-time, personalized recommendations for everyday users.”

5. (tied) Bestow, $120M, life insurance: Dallas-based Bestow, a provider of life insurance software for carriers, raised $70 million in a Series D financing led by Goldman Sachs Alternatives and Smith Point Capital, as well as $50 million in debt financing from TriplePoint Capital.

5. (tied) Owner, $120M, restaurant software: Owner, a provider of software for independently owned restaurants, raised $120 million in a Series C round led by Meritech Capital Partners and Headline. The Palo Alto, California-based company’s tools enable restaurants to offer features such as online ordering, mobile apps, loyalty programs and zero-commission delivery.

7. TensorWave, $100M, AI infrastructure: TensorWave, a startup focused on building what it says is “the world’s largest direct liquid-cooled AMD GPU deployment” raised $100 million in Series A funding led by Magnetar Capital and AMD Ventures. The Las Vegas-based company says its goal is to develop infrastructure adept at handling modern AI workloads.

8. Cohere Health, $90M, healthcare SaaS: Boston-based Cohere Health, a developer of digital tools for healthcare authorization and compliance, raised $90 million in Series C funding led by Temasek. The 6-year-old company says it will use the capital in part to build out its AI-powered product offerings.

9. Stylus Medicine, $85M, genetic medicine: Cambridge, Massachusetts-based Stylus Medicine emerged from stealth this week with the announcement it has raised $85 million in financing from backers including Khosla Ventures and RA Capital Management. The startup will use the funding to develop its in vivo genetic medicines and therapeutics programs.

10. Avicena Tech, $70M, semiconductors: Avicena Tech, a developer of ultra-low power optical interconnects for AI datacenters, raised $65 million in Series B funding led by Tiger Global. The Sunnyvale, California-based startup plans to use the capital to expand its team and to put its first product into production.

President Trump and his supporters accuse former FBI director of advocating violence

WASHINGTON—James Comey’s active presence on social media has been unusual for a former FBI director. On Thursday, it landed him in a pickle.

In an Instagram post, Comey wrote “cool shell formation on my beach walk,” under a photo of seashells arranged in the numbers “86 47.” Trump officials pounced, accusing Comey of calling for President Trump’s assassination, as “86” is old-time slang for “get rid of” and Trump is the 47th president.

Comey later said he didn’t realize the numbers could be associated with violence and took the post down, but not before drawing the attention of the Secret Service and spurring Republican calls for his arrest. Secret Service agents were questioning Comey Friday night at their Washington office, a law-enforcement official said. Comey voluntarily submitted to the interview, the official said.

“It never occurred to me but I oppose violence of any kind,” said Comey, whose long career in law enforcement included investigations of organized crime and the Italian Mafia as a federal prosecutor in Manhattan.

“He knew exactly what that meant,” Trump fired back Friday on Fox News, adding that he would leave it to Attorney General Pam Bondi to decide whether to pursue Comey, a case current and former prosecutors said would be difficult to bring and even harder to prove in court.

A Justice Department spokesman declined to comment.

Trump fired Comey in 2017, during the bureau’s investigation into whether the Trump campaign was connected to Russian interference in the 2016 election. The president and his allies continue to seethe about Comey, complaining of disparate treatment in the way he handled the Hillary Clinton email investigation compared with the Trump-Russia probe, which dogged his first presidency. (The special counsel investigation it spawned concluded the campaign didn’t conspire with Moscow.)

Comey, who has since become a top Trump critic, talked about his career and experience with the president in his memoir, “A Higher Loyalty.” His latest social-media dust-up comes just ahead of the publication of his third novel, “FDR Drive,” a crime thriller about a radical right-wing podcaster who incites murder in the name of patriotism.

Comey didn’t respond to a request for comment Friday.

“He is the former head of the FBI, so he’s got to know that whenever he does something like this there’s going to be eyes on it,” said John Fishwick, who served as the U.S. attorney for the Western District of Virginia during the Obama administration. “If you’re in law enforcement, it’s different than being a politician. You should know not to fool around with stuff like this.”

Even if an investigation doesn’t end in charges, Fishwick said it could drag out over time, with searches of Comey’s devices and interviews of neighbors “to see exactly what happened here.”

After keeping a low profile immediately after his ouster, Comey later that year confirmed he was the author of a previously anonymous Twitter account under the pseudonym “Reinhold Niebuhr,” the theologian featured in Comey’s undergraduate thesis at the College of William & Mary. A reporter at Gizmodo traced the account to Comey.

The revelation was unusual at the time, as it was unheard of for the leader of the nation’s premiere law-enforcement agency to have a social-media presence, though it appeared he was mostly just liking tweets about the bureau and himself. Comey had the account concealed, albeit somewhat thinly, under the handle @projectexile7, a reference to a federal gun-violence-prevention program he created when he was a top federal prosecutor in Richmond.

Later in 2017, Comey stirred rumors that he was running for higher office when he tweeted a pensive photo of himself standing alone—wearing running shoes—along a road in Iowa, with the message, “Gotta get back to writing. Will try to tweet in useful ways.”

The curiosity it generated is now a distant memory, as Trump’s current FBI chief Kash Patel has embraced social media for personal and professional purposes. Patel created the first official X account for a bureau director, where on Thursday he shared that the FBI was aware of Comey’s seashell post and would “provide all necessary support” to the Secret Service.

Moody’s downgrades the U.S. government, citing large fiscal deficits and rising interest costs

Key Points

The U.S. has lost its last triple-A credit rating.

Moody’s Ratings downgraded the U.S. government on Friday, citing large fiscal deficits and rising interest costs.

Expanding budget deficits mean U.S. government borrowing will rise at an accelerating rate, pushing interest rates up over the long term, Moody’s said. The firm said Friday that it didn’t believe that any current budget proposals under consideration by lawmakers would do anything significant to reduce the persistent gap between government spending and revenues.

The move strips the U.S. of its last remaining triple-A credit rating from a major ratings firm, following similar cuts by Fitch Ratings in 2023 and S&P Global Ratings in 2011. Moody’s downgraded the U.S. to Aa1, a rating also held by Austria and Finland.

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s wrote in a statement.

Kush Desai, a spokesman for the White House, blamed the Biden administration for adding to the nation’s debt and criticized Moody’s for the timing of its downgrade.

“The Trump administration and Republicans are focused on fixing [former President Joe] Biden’s mess,” he said. “If Moody’s had any credibility, they would not have stayed silent as the fiscal disaster of the past four years unfolded.”

The Moody’s downgrade comes as Republicans in Congress are trying to fashion a giant tax-and-spending bill that would extend expiring tax cuts, add some new tax cuts, reduce spending on Medicaid and nutrition assistance and boost border enforcement and national defense. It is expected to increase budget deficits by about $3 trillion over the next decade, compared with a scenario where the tax cuts expire as scheduled Dec. 31.

House Republican spending hawks blocked the bill on Friday, trying to accelerate spending cuts and hasten the end of clean-energy tax breaks.

At the margin, the Moody’s downgrade could put pressure on the market for U.S. Treasurys, which has already been hit by expectations for greater borrowing and stubbornly high inflation.

Treasurys, however, rallied after S&P’s 2011 downgrade, in part because the economy was weak, demonstrating that investors still considered the U.S. the world’s safest bet. Few expect the Moody’s downgrade to spur market turmoil this time. The U.S. remains the world’s largest economy and the benchmark against which other countries are measured.

But some investors said the downgrade could exacerbate the damage the recent trade war has done to that exceptional position. And that might compel global investors to lift the premium they demand to buy U.S. debt, which could drive benchmark yields beyond their recent level around 4.5%, likely stressing growth and market sentiment.

“That could generate an even bigger deficit because the cost of servicing our debt would also go up,” said Michael Goosay, global head of fixed income at Principal Asset Management.

In explaining the downgrade, Moody’s focused almost exclusively on the U.S. fiscal position, playing down other issues such as President Trump’s criticism of Federal Reserve Chair Jerome Powell, which has raised questions about the central bank’s ability to maintain its independence.

“While recent months have been characterized by a degree of policy uncertainty, we expect that the U.S. will continue its long history of very effective monetary policy led by an independent Federal Reserve,” Moody’s wrote.

While institutional arrangements, such as separation of powers, “can be tested at times, we expect them to remain strong and resilient,” the statement read.

For years the U.S. was one of a select group of nations rated triple-A by Moody’s, but the rise of debt levels around the world has pared that figure to 11.

Moody’s shifted its outlook on U.S. debt to stable, noting the nation “retains exceptional credit strength such as the size, resilience and dynamism of its economy and the role of the U.S. dollar as global reserve currency.”

Top lawmakers quickly issued statements responding to the downgrade.

“This downgrade is a direct warning: our fiscal outlook is deteriorating, and House Republicans are determined to make it worse,” said Rep. Brendan Boyle (D., Pa.), the top Democrat on the House Budget Committee. “The question is whether Republicans are ready to wake up to the damage they’re causing.”

Rep. French Hill (R., Ark.), chairman of the House Financial Services Committee, said that the downgrade was “a strong reminder that our nation’s fiscal house is not in order.” House Republicans, he said, “are committed to taking steps to restore fiscal stability, address the structural drivers of our debt, and foster a pro-growth economic environment.”

Rest, recharge, renew — seeking solace in testing times

The body tells us when we have reached our limits. We should learn to listen

Lately, no matter where I happen to be on my travels, when someone has asked me how I’m doing or vice versa, the word “tired” has featured somewhere in the response. In a more challenging week there might be a rally of exchanges, where we go back and forth for a few minutes about feelings of exhaustion, and what we wish we could do about it, like “sleep for two days straight”.

I’ve been thinking about how often over the past few years we’ve been answering questions about our wellbeing by describing some variation of fatigue. Maybe it’s just me and the people I’m engaging with. But I suspect it might be true for others as well. We have all to varying degrees been exposed to stresses and challenges as a result of political tensions, economic shifts, intensifying climate calamities and a world seemingly in disarray. These realities, coupled with the daily pressures we all face, have made me wonder if we’re paying enough attention to the reasons for this tiredness, and what, if anything, there is to do about it.

The 1882 work “Seamstress, Whit Sunday Morning” by the Danish genre painter Wenzel Tornøe shows a young woman who has fallen asleep in the middle of her work. She sits at a small table laden with fabrics and a sewing machine. There is a lighted lamp on the table that suggests she has been working in the early morning darkness. But now, the sunlight falls across her sleeping face and the wall on which her head leans. She is wearing a blue apron over her brown dress, and on her lap is the jacket she’s been working on.

The title implies that she has been making clothes for Whit Sunday, and this scene reminds me not just of the fatigue that comes from pushing ourselves beyond our limits, but also of the commitment that is involved in sustaining communities — even when it comes to celebratory events — and that often goes unrecognised.

This type of tiredness will be familiar to many of us. Driven perhaps by a sense of obligation, sometimes guilt, sometimes just not feeling that there is enough time to do it all, we so often push our bodies and minds beyond the obvious warnings that they need rest.

I found this painting particularly endearing because it captures so well that sense of wanting to get just one more stitch done, and it reminds me that it is a blessing that our bodies have their own boundaries. Even when we try to ignore signs of exhaustion, at some point our physical selves will win the fight over the desire to keep working.

“Despair” is a late 18th- or early 19th-century work by Bertha Wegmann, a Danish artist with Swiss roots who, among other accomplishments, was the first woman to hold a chair position at the Royal Danish Academy of Fine Arts. In the painting, a girl or young woman lays her upper body across a table and buries her head between her arms. She is wearing a loose white top that might be a nightgown, and around her waist is a blue cloth that looks like a blanket. Her outfit gives the impression that she has neither bathed nor changed out of her nightclothes. But light has filled the room. Who knows how long she has been there or will stay in this position? Perhaps she is only momentarily surrendering to feelings of despair before rousing herself to the day’s demands.

In some ways, Wegmann’s work is similar to the Tornøe painting, but it depicts a very different kind of exhaustion. There is nothing in the room to suggest the figure has been working, or even that anyone else has been present. The room is empty. The figure’s hidden face creates a distance between her and the viewer, and to me this mimics the way someone can feel distanced from the rest of the world when they are overwhelmed by despair. Such emotional fatigue can feel isolating. Yet the proximity of the figure to us as the viewer creates a kind of intimacy, too: we are on the verge of stepping into this room.

I imagine many of us could at certain points in our lives relate to this painting. It is a wonder to me that the body communicates physically when it has surpassed its emotional capacity. And yet how often do we recognise and respond to the physical cues? In the current era, in which we are both seemingly endlessly busy and dealing with the uncertainties of a challenging world order, how do we identify the cause of our tiredness and best seek to alleviate it?

I love the 2016 textile work “The Dreamer” by the Johannesburg-based artist Billie Zangewa. She makes scenes of ordinary daily life from scraps of silk fabric, with the nuanced understanding that life, just like the formation of silk, is a process.

In this work, a woman wearing a yellow patterned dress and sandals lies curled on her side in a field full of tall pink flowers. Green hedges line the background, and a silver blue sky is stitched above her. She uses something, a scarf perhaps, as a small pillow to cradle her head. She is clearly tired but her posture is that of someone who is wise in listening to the requirements of her body, mind and spirit. Alone in the field, with her eyes closed, she conveys a sense of quiet and momentary disengagement.

This is not a cure for deep fatigue or a quick fix for the accelerating pace of our lives. I suspect that requires a larger decision to stop and reflect on the patterns, routines and habits we permit or have simply fallen into. But Zangewa’s work does remind me that there are moments, and perhaps hours, and even days, when we can make choices that protect our wellbeing, small acts that can help recalibrate us towards more of an equilibrium, even in the midst of ongoing demands and challenges.

BT nears deal to sell TNT Sports stake to Warner Bros Discovery

Deal could be announced as early as next week that would bring telecoms group’s involvement in sports rights to a close

BT is in advanced talks to sell its 50 per cent stake in UK broadcaster TNT Sports to US joint venture partner Warner Bros Discovery, according to two people familiar with the situation. 

A deal could be announced as early as next week, they added, when BT is set to release its full-year results. However, that timing could still slip depending on how negotiations progress, one added.

The move would end BT’s involvement in sports broadcasting after more than a decade, bringing to a close the telecoms company’s multiple billion pound bet that offering exclusive football games would win it new broadband customers and keep existing ones loyal. 

Warner Bros Discovery has an option to buy out BT before the end of next year. Striking a deal will give the US media giant better control over the future of the sporting channels, which are a key part of its business in Europe.

Sports will be a cornerstone of WBD’s streaming service when it launches in the UK next year, alongside HBO series such as Succession and The White Lotus. The platform — which was this week renamed HBO Max, rather than just Max — will also show the new Harry Potter series.

BT and WBD declined to comment. 

BT entered the sports rights market in 2012 with an aggressive strategy to compete with Sky on the broadcaster’s home turf, matching bundled offers of TV, broadband and mobile services.

However, the TNT channels — which have the rights to some exclusive Premier League football games — have been identified as non-core by BT chief executive Allison Kirkby. Since taking over in February 2024, she has looked to refocus the company on its traditional mobile and broadband offering.

TNT has long been a cash drain for BT, because of increased competition with Sky and Amazon to secure rights for key competitions such as the Premier League. The business booked a £187.5mn pre-tax loss in the 2024 financial year, according to accounts filed at the UK’s Companies House. 

The joint venture is valued in the BT accounts at more than £750mn. However, people close to the talks said that the book value of the business was not reflective of the deal value, and that any deal struck with WBD would be significantly lower than this figure.

TNT Sports, which has rights to show other competitions including the Uefa Champions League, was created after BT merged its sports division with Warner Bros Discovery’s Eurosport UK business in 2022. 

The company has a four-year deal to air 52 Premier League live matches per season until 2029, and a four-year deal with the Football Association to show the FA Cup from 2025. 

Fall in recorded Chinese holdings highlights Beijing’s push to diversify its reserves away from America

China’s recorded holdings of Treasuries have fallen below those of the UK for the first time since the start of the century, underlining an ongoing shift in Beijing’s management of its foreign reserves.

The value of China’s Treasury holdings as recorded by US banks and custodians fell to $765bn at the end of March, down from $784bn in the previous month, while those of the UK rose by almost $30bn to $779bn, according to data published late on Friday.

The crossover makes the UK the second-largest foreign holder of US Treasuries after Japan. It is the first time the UK’s holdings have been higher than the Chinese since October 2000 and is the latest sign that China is seeking to gradually diversify away from US assets.

“China has been selling slowly but steadily; this is a warning to the US” said Alicia García-Herrero, chief economist for Asia-Pacific at Natixis. “The warning has been there for years, it’s not sudden — the US should have acted on this well before”.

The data will come as a cautionary sign for the US administration following news that Moody’s has followed Fitch and S&P in stripping the world’s largest economy of its triple-A credit rating, citing its growing debt and deficit.

Beijing has been gradually reducing its holdings of US treasuries from a peak of more than $1.3tn in 2011, diversifying into other assets including US agency bonds and gold. Some of the fall in the value of China’s holdings could also reflect market moves.

Analysts believe China also holds a growing proportion of its US assets through third party custodians, including Euroclear in Belgium and Clearstream in Luxembourg, which obscures the true level of its holdings. Luxembourg’s Treasury holdings by value were flat in March while Belgium’s increased by $7.4bn from February.

China’s enormous Treasury pile is the result of a multi-decade trade surplus with the US that President Donald Trump is now seeking to reduce. But officials in the US administration have also expressed concern over foreign selling of Treasuries, which pushes yields up and makes debt refinancing more expensive.

The proportion of China’s Treasury holdings that were in short term bills, the most liquid securities that could be most easily sold off in a crunch, in March hit its highest level since 2009.

“Based on the visible data, there is no doubt that China has shortened the maturity of its US portfolio”, said Brad Setser, a senior fellow at the Council on Foreign Relations and former US Treasury official. 

The rise of the UK’s recorded holdings does not reflect its own reserves. Rather, analysts say it reflects London’s role as a domicile for international capital.

Holders in Europe include insurers, banks and custodians. Some hedge funds hold Treasury securities and arbitrage by selling futures or swaps — positions known colloquially as “basis trades”.

Setser said the UK number “likely [reflects] an increase in Treasuries held by global banks, the availability of custodial services in London and potentially some of the activity of hedge funds”.

Analysts said that the data, which only shows moves until the end of March, did not reflect any action taken by China after Trump’s so-called “liberation day” escalation of his trade war.

“It is possible that China could have made significant changes in its reserve management in the last six weeks that will only become clear with more time,” said Setser.

European stocks have been the surprise success story of 2025, and banks the surprise within Europe. The iShares MSCI Europe Financials exchange-traded fund has soared by a third this year, boosted by a 9% jump in the euro versus the dollar. U.S. peers have advanced 5%.

Further gains could be tougher. “The catch-up has happened,” says Emmanuel Cau, head of European equity strategy at Barclays Investment Bank. “The market may need some time to adjust now.”

But with dozens of bank names on offer in a sector Balkanized by national boundaries, there’s still plenty of room for stock-picking.

European financials were a big winner from postpandemic global inflation. It forced the European Central Bank to yank up interest rates after 14 years near zero, which meant banks could at long last earn net interest income. Massive spending promises from Germany’s new chancellor, Friedrich Merz, added fuel to the bullish fire this year.

European banks are still not expensive arithmetically. They trade around book value on average, compared with two times in the U.S. Price/earnings ratios are running 40% below other European stocks, says Andrew Stimpson, head of European bank research at Keefe, Bruyette & Woods. Previous rallies have peaked at a 20% discount. “We’re still at low multiples,” he concludes. “There’s definitely more room to go.”

The sector’s mojo was still working through first-quarter earnings, reported over the past few weeks. Almost 90% of the 38 houses that UBS covers beat profit expectations, reports Jason Napier, head of European banks research.

Shadows loom, however. Europe’s economy isn’t exactly on fire. Both the European Union and United Kingdom expect gross-domestic-product growth of about 1% this year.

The ECB is loosening again, slashing its key deposit rate from 4% to 2.25% over the past year. A descent to 1.5%, at the low end of market expectations, would “make life a little trickier for the banks,” Stimpson says.

Cheaper money should, in theory, spur more borrowing. That’s constrained for the moment by President Donald Trump’s only recently paused trade wars. The EU is a prime target, racking up a $200 billion-plus goods trade surplus with the U.S. last year and a series of rhetorical insults from the White House. (“The European Union,” Trump said, “was formed in order to screw the United States.”)

That has left corporate borrowers across the Continent cautious at best, says Johann Scholtz, European bank analyst at Morningstar. “It’s hard to see what is going to drive bank earnings from these levels,” he says. “None of the banks have lowered guidance to anticipate tariffs.”

Scholtz still sees value in one top-10 European bank, BNP Paribas, whose shares have struggled to recover from a punishing 2024. “Markets saw Paribas as a proxy for shorting France,” he says.

He and other investors are mostly combing second-tier names across the financial archipelago. Barclays’ Cau is tilting toward the U.K., favoring High Street mainstays Lloyds Banking Group and NatWest Group.

Stimpson is focusing on “some of the most profitable names in the sector, which give defensive qualities.” That list includes AIB Group, or Allied Irish Banks; Italy’s Intesa Sanpaolo; and Belgium-based KBC Group.

European banks are on solid ground. Nonperforming loan ratios in the euro area have dwindled below 2% from more than 7% a decade ago. “The banks have loads of capital,” Stimpson comments. “The missing bit is the growth element.”

They can’t keep performing like growth stocks without growth forever, though.

The shares were a tariff winner, and that won’t change even with the China trade deal.

In a market that has felt like a horror show for much of 2025, Netflix has been one of the few feel-good stories in town.

The video streamer looks like the rare sort of stock that can outperform no matter what happens on the trade front. Its shares, at a recent $1,173.25, have jumped 25% since April 2, when President Donald Trump’s tariff plans sparked a brutal and broad selloff, while the S&P 500 index is up 4.1% over the same period. On Thursday, Netflix was less than $1 billion away from closing with a market value of $500 billion for the first time.

It isn’t hard to see why Netflix has become one of the market’s go-to safe havens. It imports content, not goods, so there’s little risk of the White House’s reciprocal levies driving up its costs. Shares dipped just 2% the day Trump threatened to impose 100% import duties on foreign movies, as investors realized that the company could mitigate much of the earnings impact by either shifting production to the U.S. or raising its prices.

The stock also has a pedigree as a name that can outperform in times of macroeconomic uncertainty, racking up double-digit gains during the Covid-19 pandemic as widespread lockdowns led to users plowing through smash-hit series like Tiger King and The Last Dance.

But while other perceived havens like gold could struggle now that the Trump administration has brokered a deal with China to cut most tariffs for 90 days, Netflix ought to be able to build on its strong run this year.

The only real mark against the stock right now is valuation. Due to the recent rally, shares aren’t cheap—they currently fetch about 43 times future earnings, meaning they’re trading at a significant premium to both the benchmark S&P 500, at 21 times, and the Magnificent Seven group of megacap tech names it’s often compared with, at 27 times.

Still, Netflix has averaged a price/earnings ratio of 52 over the past five years, so judging by recent history it isn’t expensive. Over that time the stock has gone from “a loss-making challenger where everyone was skeptical about how much it’s spending on content to a reliable, profitable compounder,” Ben James, a strategist at the Edinburgh-based investment management firm Baillie Gifford’s U.S. growth fund, tells Barron’s. The firm holds a little more than 4 million shares, a position that’s valued at about $4.5 billion.

The bull case hinges on the idea that the streamer will be able to grow earnings at a fast enough rate to maintain the stock’s recent momentum. James argues that operating margins, currently at 27%, could nearly double by the end of 2030.

He says that over the past decade, Netflix has managed to engineer a self-sustaining cycle of growth in which more subscribers means more money to spend on content, which in turn attracts even more users. The streamer has already done the hard work, pouring money into creating a vast library of films and movies.

“It’s invested so much in its own content that it’s built a flywheel that will be key to growing its margins,” James says. “When we first invested in 2015, its margins were about 4.5%, and our forecast was they would reach 50% within 10 to 15 years. So it’s over halfway there, and we still think it can get there.”

Executives are targeting a $1 trillion market capitalization by the end of 2030, The Wall Street Journal reported last month, up from $484 billion right now. Even at Netflix’s current lofty valuation, it would be all set to hit the 13-figure threshold if it could manage the necessary margin growth.

The rollout of cheaper subscription plans could also help supercharge profit. Netflix unlocked a fresh revenue stream when it introduced ad-supported tiers in November 2022. Ads accounted for just 4% of revenue in 2024, but the company projects ad revenue to double this year, and its advertising president, Amy Reinhard, said Wednesday that the ad-supported tiers had added 24 million users over the past six months. James thinks the streamer will soon be able to leverage artificial intelligence to target users and make the tiers more profitable.

Live sports programming could also help the streamer reach untapped markets. It might seem like every household has a Netflix account, but there’s still plenty of room for the streamer to grow. For the fourth quarter of 2024, it reported 301.6 million subscribers globally. Three years ago, Chief Financial Officer Spencer Neumann estimated a total addressable market of between 700 million and 1 billion homes.

Netflix might not even be a pure-play streamer for much longer. In February the company opened its first restaurant, Netflix Bites in Las Vegas, where fans can tuck into dishes inspired by well-known films and TV shows. It’s also set to launch two experiential venues it’s dubbed Netflix Houses sometime later this year.

All that makes for a tempting growth story. Analysts polled by FactSet expect earnings before interest, taxes, depreciation and amortization, or Ebitda, to rise 26% this year, another 20% in 2026, and then another 18% in 2027.

Despite Netflix’s stellar gains this year, investors shouldn’t feel like they’ve missed the boat. Surging profit could quickly make the streamer look cheap again. Sometimes it’s worth paying a premium for that.