# Roundup of the week: 8 August 2025 _This week’s update spans a lot of ground — from Trump’s latest tariff salvo against India and the ongoing debate about their inflationary impact, to a pivotal UK Supreme Court ruling that lifted a cloud over the banking sector. We also look at rate cuts on both sides of the Atlantic, a bidding war for Spectris, a string of strong corporate results, and the extraordinary scale of hyperscaler AI capex plans. As ever, some sectors are buoyant, others are still in recovery — but in both cases, opportunities remain for those willing to look past the headlines._ Neil Woodford · 8 August 2025 · 14 min read ![Apple’s $100bn handshake – Tim Cook meets Trump in the Oval Office to seal a deal that sidesteps a 100% chip tariff by bringing manufacturing to the US.](https://cdn.sanity.io/images/v3acfbvo/production/c090984642b02b9cfbcb34325d3c54654e770f0b-1200x800.jpg?w=1600&fit=max&auto=format) --- If you think I have missed something you would like to discuss, [please let me know](mailto:hello@noisecancelling.co), and I will give you my view. ## Politics ### Trumpy Trump Trump The big man is all over the news for reasons we will be familiar with. Tariffs, which I expect to gradually become less dominant as a story now that the 1st August date has passed, had one last hurrah at the end of last week in relation to one of the US’s less important trading partners, India (albeit that the US is India’s largest trading partner). ![Roundup of the week: 8 August 2025](https://cdn.sanity.io/images/v3acfbvo/production/775e4ac04715b38df97a5c426edd1a0427940e72-790x780.png?w=1600&fit=max&auto=format) In summary, partly because Trump is becoming increasingly irritated by Russia’s refusal to begin negotiating an end to the war in Ukraine, and in seeking to punish India for buying Russia’s oil, Trump has announced that he plans to substantially raise tariffs on imports from India. India has become the largest market for Russian crude since 2023 and now imports 89 million tonnes (550 million barrels) a year, which is approximately 50% more than China buys. Last week, a tariff rate of 25% was expected, but that now appears to have risen to 50% with the additional 25% directly linked to the Russian oil import penalty. This level of tariffs will clearly make Indian exports to the US uncompetitive and pose a major challenge to the administration and its policy towards Russia. In the meantime, the list of economists writing negative copy about the implications of tariffs continues to grow, albeit that many also acknowledge that the outcome looks a lot better than what was proposed back in April. These assertions (from mostly academic economists) tend to focus, as I have commented on before, on the increased trade friction which will limit growth in global trade and the cost/inflationary implications for US consumers. As I have also written, free trade and globalisation may have led to economic transformations in countries like China and Vietnam, for example, but were hardly unalloyed joy for the US’s manufacturing base and the living standards of millions of US workers. Once again, the winners and losers paradigm, which economics serves up, but which never gets a proper hearing in this one-sided debate. The inward investment that Trump appears to have secured from Japan and South Korea, in particular, and from a number of global titans in the pharma and auto industries also doesn’t get much attention either. As for the inflation debate, I am in two minds. Earlier in the year, when I first started writing about the inflationary consequences of Trump’s potential tariffs, I said that these effects were being exaggerated by consensus. Although it is still too early to be categoric about the ultimate impact on US consumers, it is odd that tariff revenues are showing up in the Government’s accounts but the inflationary consequences aren’t. For example, Amazon, which sources many of its products sold on its platform from China, said last week that it “hasn’t felt any effects from tariffs so far” but added that in effect, clarity would only emerge when the company and third-party sellers had run through their built-up inventories. My hunch is that the inflationary consequences will be significantly less onerous than many have predicted and will be more than swamped by the longer-term deflationary consequences of the AI industrial revolution that is coming and which is already having a profound impact on a number of industries. ## Economics ### US jobs data Last week, the FOMC decided to keep rates on hold, but as I highlighted in last week’s update, unusually, there were two dissenters on the committee. As important as this decision was, though, the jobs data that was released on Friday was, if anything, more important because not only was July’s data weaker than expected, but there were also downward revisions to the two previous months’ data. This immediately led to a rally in government bond markets, which has continued into this week and leaves US ten-year yields at under 4.2% and UK at 4.5%, having been as high as 4.76% back in May. I expect this rally to continue and for yields in the UK to fall further, not least because I expect the MPC to cut rates tomorrow. ### UK interest rates As expected, the MPC voted to cut UK interest rates by 25bps to 4%. What surprised me is that four members of the nine-person committee voted for no change, which I find very hard to understand given what has happened to wage settlements and underlying economic growth. One member of the committee did, however, vote for a 50bps cut. One of the hawks, Catherine Mann, was the member who voted for a 50bps cut a few meetings ago, which looks increasingly odd in the context of her latest vote. Quite how these two positions can be reconciled is beyond me. Odd voting behaviour aside, this cut is very important and will, in my opinion, be followed by a further cut in November and more in the first half of 2026 as inflation returns to the 2% target. I would not be surprised if rates were back down close to 3% in a year's time. ## Markets ### President Trump’s letter to 17 leading pharma companies President Trump was again in the news, but this time the subject was not tariffs but drug pricing. Initially, the President’s comments on Trump’s Truth Social platform, which threatened to unilaterally cut some US drug prices in September, had caused the global sector to wobble, but some calm returned later in the day when new letters posted on Thursday seemed to dilute these initial threats. We will have to see where all this ends up, but what is clear is that the President sees high US drug prices as a legitimate target, especially where the government is the buyer for the Medicaid health insurance programme for low-income US families. ### UK motor judgement In a much-anticipated ruling, the UK Supreme Court handed down a key judgement in the UK motor finance commission case last Friday after the UK financial markets had closed. In what one leading City analyst described as a huge win for the UK banking industry, the Supreme Court ruled that motor dealers don’t owe a fiduciary duty to their customers when arranging car finance. Without going into too much detail, this ruling does remove a financial hit that was hanging over lenders who had been active in this market and particularly Lloyds Bank, whose share price rose 8% on Monday in response. Although there will be an expensive industry redress scheme for certain cases where the FCA rules that particularly high commissions or interest rates were charged, the cost of this scheme will be much lower than the industry hit would have been had it lost this landmark case. In summary, the ruling is good news for the UK banking sector because it removes an overhang that could have been material for certain banks. ### Spectris/KKR/Advent In yet another example of the global pursuit of undervalued UK corporate assets, KKR and Advent have both increased their bids for this leading international manufacturer of precision instrumentation and controls for, amongst others, the pharma and semiconductor industries. Initially, Spectris had accepted a £4.4bn offer from Advent back in June. Now the bidding is led by KKR and the price has risen to £4.8bn. We will have to see if this is the final and best price, but before the initial announcement back in June, Spectris was valued at under half that level. This bidding war, like many others, once again demonstrates the level of undervaluation prevalent across the UK equity market, but which so many institutional investors seem blind to, including the UK’s DB pension industry. ### BP BP has had a busy few days. Last week it announced its biggest oil and gas discovery in 25 years off the coast of Brazil which the Company’s head of oil production described as “significant”, and this week it has released its Q2 results which were substantially better than had been expected despite a 10% fall in the oil price from the first three months of the year. The CEO also announced an additional cost-cutting programme which will involve shedding at least an additional15% of its office staff. All of this comes after the activist PE investor Elliott Management built a 5% stake in the business and called for a fundamental reset of the strategy and more radical action to improve the company’s performance. BP also announced a 4% increase in the quarterly dividend (the shares yield 5.8%) and maintained its $750mn quarterly share buyback. ### Legal & General L&G has announced its half-year results. The new CEO said that the business has had “an excellent” first six months and delivered operating EPS up 9%, which is right at the top of its targeted 6-9% range. The core operating profit growth was also ahead of expectations. As ever, the detractors will always find something to moan about, and today they have alighted on a 3% miss to the Solvency II ratio (effectively a capital adequacy ratio), which at 217% seems to me to be more than adequate. A ratio of 100% indicates that an insurer has sufficient capital to withstand extreme market scenarios and meet its obligations to policyholders. I am happy with these numbers from L&G and with the dividend increase, which at 2% is in line with guidance (The shares yield 8.6%) ### Windar Windar released its AGM statement last week. In summary, this UK-listed, Denmark-based company that has developed a LiDAR technology to optimise the performance of wind turbines, announced a robust update on its forward orderbook and growing pipeline of opportunities in Japan, Australia, the US, Europe and China. The statement alluded to a significant increase in revenue in 2025 (albeit that this expected) but this business is at last turning lots of potential interest into firm orders. The business also announced the relocation of its main production and R&D facilities in Denmark, which will allow a quintupling of its production capacity. ### Capita Capita announced its half-year results earlier this week. This business has been marching slowly forward on a ten-year recovery plan after a bruising period in which profits collapsed, and excessive leverage weighed heavily on its ultimate viability. Whilst there is still more work to be done, it appears that the business is emerging from this difficult period. These results illustrate the hard work that is now behind the business on cost reduction, restructuring, and margin improvement alongside better customer service reflected, for example, in 17% growth in the value of contracts won on a LFL basis. Although profits were down, as had been expected, guidance for the full year was maintained and included a modest increase in group margin, better cash conversion, and broadly flat revenues, with good underlying growth in the public service division. ### Travis Perkins Travis Perkins, the UK’s largest builders’ merchant and tool hire business, announced its first half results this week. This business has been struggling in the last two years with self-inflicted problems allied to a weak market backdrop in the UK, and as a result, expectations were not high going into the numbers. In the end, they were better than expected, and the share price rallied significantly on the report. The key things in the report that I took encouragement from were stabilising market share, an improving trend in lfl sales in merchanting, good growth in Toolstation (UK), lower debt, working cap improvements and maintained guidance. With the new CEO arriving at the end of the year and a better UK construction market beginning to take shape as interest rates fall further, the outlook for Travis is clearly improving. ### Paypoint Paypoint yesterday announced its Q1 trading update. In summary, the business announced an encouraging start to the new financial year, with revenue up 7.5% in Q1, YOY. The stand-out performer was the e-commerce division, which saw net revenue up 21% on the back of 19% growth in parcel transactions (to 38.2mn). The business also announced an extended and increased share buyback on the back of this better-than-expected start to the new year. ### Burford Burford’s H1 results showed a significant increase in revenue and profitability in the second quarter, with one important measure showing at the net income level a tripling of Q1’s result. There is clearly strong momentum in the business. The better outcome reflected good growth in both realised and unrealised gains, with the latter benefiting from very important and positive recent judgements in two high-profile and very significant cases. Perhaps the most impressive figures in the results are the cumulative group ROIC and IRR numbers, which stand at 83% and 26% respectively. ### Vanquis Vanquis released its interim results this week, and they were well received by the market. This company has been going through an extended recovery and restructuring following a very challenging period that started way back in 2017, and which involved regulatory problems and a series of poor leadership decisions. It now appears that at last the business is beginning to normalise, not least by returning to profitability and growth and delivering a much more efficient and low-cost infrastructure. This has been a long and difficult road for the business, but at last it seems as if it’s now on the right track. ### First Solar First Solar announced its Q2 results at the end of last week. The business has clearly been the subject of extreme swings in sentiment in recent months, given the dramatic changes in the US’s energy policy and concerns about how the OBBB would affect its significant US presence. As it turned out, the environment is likely to be much better than initially assumed, which was reflected in a standout number for bookings in July at 2.1GW, the highest since Q1 2024. In addition, the management highlighted a further 1GW that could also be added to the backlog that wasn’t included in this number. In the statement, the CEO summarised First Solar’s position as follows: > "In our view, the recent policy and trade developments have, on balance, strengthened First Solar's relative position in the solar manufacturing industry. In addition, we believe that on a fundamental basis, with its cost-competitive energy and faster time to power profile, the case for utility-scale solar generation is compelling regardless of the policy environment, which places First Solar, a utility-scale leader, in a position of strength." Following the results, the share price has continued to recover from the April/ May lows when investors were deeply concerned about how tariffs and the OBBB might adversely impact the business. I expect this period of rehabilitation to continue. ### Commerzbank Commerzbank, like so many other banks across the UK and Europe has announced excellent Q2 results this week. Suffice it to say that the bank announced the best operating performance in its history. Without delving into too much detail, revenues were up 13% in the first half, the cost-income ratio improved, and Q2 net earnings were up over 31%. Capital improved with the CET 1 ratio at 14.5% and ROE 11.1% before restructuring expenses. The bank also launched a Euro 1.0bn buyback and upgraded the outlook for the full year for both net interest income and net earnings. ### Infineon Infineon, the German semiconductor business released its Q2 results this week. They were very good and usefully ahead of consensus. Of note were better gross margins and excellent cost control. The guidance for the full year was also better than expected, and especially with respect to gross and EBIT margins. Looking forward, the business drew attention in the statement to the growth opportunities for Infineon in software-enabled vehicles (cars) and power supply solutions for AI data centres, energy infrastructure and humanoid robots. It is these predominantly AI-related opportunities which I see as driving the semiconductor industry recovery in the medium and longer term, which will help a number of companies in the industry to overcome the cyclical price and inventory effects which have weighed heavily on the sector for the last two years. ### Biomarin, Amicus, BioNTech, Sarepta These four biotech businesses have all reported Q2 numbers this week. I don’t plan to outline each company’s individual performance, but just wanted to highlight a few general points. All beat their respective consensus expectations, and encouragingly so on product revenues rather than for non-operational reasons. All these businesses also delivered better than expected operating results, albeit none is profitable yet. Even Sarepta, which has been in the news for all sorts of challenging reasons in recent weeks, was able to grow its Q2 revenue by 42% YOY and reiterated that it is on target to realise over $100mn in cost savings by the year end. In all four cases, important trial results are expected in the second half of the year, which, if positive, should act as catalysts for improved investor perception. While investors wait for these important value inflection points, the encouraging operational progress these companies are making (even in the case of Sarepta) bodes well for the future. ### Hyperscalers, hyper capex Amongst all the announcements that come thick and fast from this group of tech companies, it is possible to discern one overriding and very significant development. The scale of their collective capex ambitions is growing rapidly. Here are some headlines from the most recent announcements – 1. In a clear demonstration of how to appeal to the US President and avoid the tariff threat, Apple has (in a CEO /President meeting in the Oval Office) announced an additional $100bn US investment and will, in exchange, avoid a 100% tariff on its imported chips. In effect, Apple will bring a significant amount of its component manufacturing to the US. In total, Apple has promised the President a staggering $600bn investment in the US economy. 2. Amazon, Microsoft, Google, Meta, and Oracle will spend nearly $420bn in US AI capex together in 2025, an increase of 168% since 2023. 3. Forecasts of Microsoft’s capex spend next year are increasing. One leading US broker expects it to spend $121bn in calendar 26. 4. Amazon is targeting spending between $32-33bn per quarter in the final two quarters of this year. 5. Meta’s capex in 2026 is expected to exceed $100bn, up 40% from 2025. 6. Google’s 2025 capex bill is also growing and for 2025 has now reached $85bn. These are staggering sums of money, and the scale of what is envisaged is hard to compute. My guess is that the scale of these commitments will be hard to deliver as planned, not least because of the capacity constraints these projects will encounter—construction worker availability, construction equipment, limited supply of server capacity, and perhaps most importantly of all, once built, the availability and reliability of energy supply. Looking further ahead, the returns hyperscalers will achieve on these mammoth investment commitments are currently impossible to assess accurately. ## What to look out for next week ### Economics There are some important UK data releases next week that should give a guide to what’s going on in the underlying economy. On Tuesday, retail sales data is published along with labour market data, including average earnings numbers. I expect to see further signs of a gradually weakening labour market (including wage settlements), which should further underwrite the need for further cuts in UK interest rates. We will also see GDP data on Thursday, which will also be interesting in the context of recent debates about interest rates and future fiscal problems for the Chancellor, about which I will be writing next week. In the US, we also have a busy week, with inflation data on Tuesday, labour market data on Thursday, and a whole host of slightly less important releases on Friday. ### Markets The results season abates a bit next week, so next week’s update will likely be shorter than this week’s. There will still be quite a lot of results, though, which I will keep you up to date on to the extent that they are relevant to the four strategies.