Good morning from the Financial Times.
Today is Friday, July 25th, and this is your FT News Briefing.
Donald Trump and Keir Starmer are talking steel tariffs, and meme stocks have, once again, made an appearance.
I don't think meme stock mania is going anywhere.
I think it'll rear its head every so often.
Plus, entry -level job postings are a lot harder to come by these days.
Is artificial intelligence to blame?
I'm Marc Filippino, and here's the news you need to start your day.
U .S. President Donald Trump is headed to the UK today, and top of Prime Minister Keir Starmer's list for the visit, getting Trump to cut tariffs on British steel.
The two countries have hit an impasse in their trade negotiations.
They agreed to one trade deal earlier this year, which lowered tariffs on British carmakers and aerospace manufacturers.
But steel producers have been in a bit of a holding pattern because the U .S. is concerned about U .K. supply chains, namely that some British plants import the metal from overseas before they ship it to customers.
The U .S. wants to make sure that only steel melted and poured in the U .K. benefits from a quota within the deal.
meme stocks are so back retail investors have been flocking to crispy cream and gopro the department store chain kohl's and a tech company called open technologies they've also been getting a taste of the meme stock price boost it's all part of a revival of the game stop social media frenzy of 2021 so what has triggered the return of meme stock mania here to talk to me about is the ft's george steer hey george hi All right.
So how well are these stocks trading?
Krispy Kreme, GoPro, the companies you mentioned, they've had a very good July.
They might be down year to date, but the meme stock mania that you referred to that has kind of roared back to life has ensured that, yeah, Krispy Kreme is up something like 70 % in July.
buy. Kohl's is up by, let me check, 60 % so far this month, even if it's down 5 % since the beginning of the year.
So the meme stock mania has come roaring back to life only in the last few weeks.
Now, when we talk about meme stocks, what are we talking about?
Why do we characterize these stocks in particular as meme stocks?
They've done so well in the last few weeks, despite not having reported any increase in profits.
They haven't started spending or expanding in any significant kind of way.
There are no fundamental reasons why the shares in these companies should have roared 70 % higher.
Meme stocks become meme stocks because often they churn out a product like GameStop or Krispy Kreme that people like, but that hedge funds might not.
So a lot of these companies that have done really well recently are heavily shorted by the hedge fund community, for example, and retail investors, you can check which stocks are most heavily bet against and you can basically start buying up those shares and you can squeeze the hedge funds out of their positions.
So this weird spike we're talking about is coming at a time when stocks have generally been doing well.
What does this tell you about the state of the market?
Is it just frothy? I think a lot of people would consider the current market quite frothy.
The S &P 500 is is at a record right now.
It's up about 30 -odd percent since it sold off very sharply in early April after Donald Trump's Liberation Day tariff announcement.
And our sense is that a lot of the rally has been driven by retail interest and that the institutional investor crowd, they're not fully bought into this rally.
They're still a bit cautious.
They're still a bit wary of what Trump may or may not do on tariffs and what tariffs might do to the US economy.
So they still have cash on the sideline that they could invest at some point.
We've had this incredible rally back to record highs, and yet a lot of Wall Street has cash left to put into stocks so we could yet go higher.
This is all got me thinking, George.
Aside from the 2021 meme stock craze that I mentioned, there have been a few blips where we've also seen meme stocks crop up.
Are meme stock crazes is cyclical.
Are we just going to see this every couple of years or so?
I think definitely.
I don't think meme stock mania is going anywhere.
I think it'll rear its head every so often as it has now.
It'll die down when markets fall.
Right now, we're in a sweet spot for sure.
We've had record high after record high in the last few weeks.
There's a general sense of bullishness, but the retail crowd is a powerful force.
The rollout of apps like Robinhood, for example, that make it very, very easy to trade stocks means that retail traders are going to exercise more and more power over market dynamics going forward. And yeah, I think meme stock mania, I think, will become something that we will continue to write about every so often for the foreseeable future.
It's become a feature rather than a bug of US capital markets.
George Sear is the FT's US markets correspondent.
Thanks, George. Thanks.
The European Central Bank is holding interest rates steady this month.
It's the first time they've done that since September.
The central bank has been on a rate -cutting spree because of a turndown in inflation.
But now it's sticking to 2%.
ECB President Christine Lagarde said last month that the bank had, quote, nearly concluded its rate -cutting cycle.
Lagarde said yesterday that the ECB is now in a wait -and -watch situation.
All eyes are on the U .S.-EU tariff negotiations this week, ahead of U .S. President Donald Trump's August 1st deadline.
Recent university graduates have been thrown into a pretty dire job market.
Job postings for entry -level positions are drying up, and it's easy to pin the entire blame on the rise of artificial intelligence.
But AI might not be the whole picture here.
I'm joined now by the FT's Clara Murray to speak about this.
Hey, Clara. Hey. All right, so do me a favor.
Just quickly give us a sense of scale, Clara.
How many entry -level jobs are disappearing and what industries are they mostly in?
Yeah, so graduate jobs are down pretty sharply on both sides of the Atlantic.
So compared with June 2022, right around the time that ChatGPT launched, in the U .S. they're down 43%.
and in the UK they're down 63%, and that's jobs that are specifically marked as graduate in the job title.
Sectors like banking are particularly affected, so that's down by almost three quarters compared with three years ago.
But also software development, accounting, HR, marketing, it's really across the board. Lots of these really competitive, white -collar sectors that graduates want to go into.
What are graduates that you spoke to saying about their job prospects?
Yeah. So, graduates are finding it really, really tough at the minute.
You know, there's a lot of anxiety about what's happening to the labor market, a lot of anxiety about, you know, whether this is the sort of beginning of the end for these sort of white collar roles.
One we spoke to actually switched from studying translation to studying management because she was like, well, there's no jobs for translators anymore.
ChatGPT is going to do all all of them.
There's also this kind of other issue of companies using AI to review applications.
So a lot of graduates are feeling like they're getting rejected without a human ever reviewing their application, which is obviously pretty demoralizing.
Yeah, I can imagine.
But Clara, how much can we actually attribute this thin entry -level job market to AI?
Yeah, a lot of people are talking up AI as the cause for this.
And if you do track the data, a lot of the downturn did start right around the time that chat GPT launched but actually you know late 2022 was the kind of peak of this post -covid hiring boom what I think we should expect to see if AI is really causing most of this downturn is that sectors that are more exposed to AI so things like you know accounting customer service software development would see the downturn first and hardest but actually we're really not seeing that and you know the slowdown in graduate hiring is happening right across sectors, even things like teaching or human resources that are theoretically
going to be less impacted by generative AI.
Okay, well then, what are some of the other explanations for this drop -off in entry -level hiring than if it's not entirely due to artificial intelligence?
Yeah, so from speaking to economists, labor market experts, they're pointing to much broader issues, much more like economic factors.
So in the US, things like the so -called Department of Government Efficiency set up by Elon Musk, they've been making lots of cuts to the US federal government that's obviously affecting graduates as well.
Trump's tariffs are causing a lot of business uncertainty.
Then in the UK, the new Labour government has brought in new fiscal rules such as raising employer and national insurance contributions, which means that every employee that they hire is going to be more expensive, which may be causing some employers to hold back on hiring junior people.
It's quite hard to disentangle the impact of AI from companies just choosing to outsource jobs.
And one thing that LinkedIn have said to us is that actually the entry -level jobs market is still quite strong in developing countries, you know, places like Brazil or India, which maybe suggests that it's not that their jobs are disappearing, it's just that they're going overseas.
So Clara, given all these factors, what do you think the future of entry -level work is going to look like?
Yeah, it's quite hard to tell at this point because this could just be a bit of a cyclical downturn after the sort of COVID boom in hiring.
It could be like the financial crisis where it's going to bounce back.
Obviously, there's the worry that this is an infection point and things aren't going to be the same again.
And I think if you listen to AI CEOs as a graduate, you'd be quite depressed.
The CEO of Anthropic thinks that half of all jobs, all professional jobs for under 30s are going to be gone in the next five years.
I would be a little bit more skeptical than him, but I think it's a bit too early to say for sure.
Clara Murray is a data journalist at the FT. Thanks, Clara.
Thank you. Before we go, I wanted to let you know that the FT Weekend Festival is back.
Come hang out with me and some of my colleagues on Saturday, September 6th at Kenwood House Gardens in London.
There's going to be a wine tasting.
There's going to be a chocolate tasting.
There's going to be a champagne bar, as well as big name speakers like Stephen Fry and Nick Clegg and so much more.
And as a briefing listener, you can sign up with a 10 % discount if you enter the promo code FT Podcasts.
We'll have the registration link and the promo code in the show notes.
This has been your daily FT News Briefing.
Check back next week for the latest business news.
The FT News Briefing is produced by Josh Gabert -Doyan, Sonia Hudson, Fiona Simon, Ethan Plotkin, Katya Kumkova, and me, Mark Filippino. Our intern is Michaela Sia.
We had mixing help this week from Blake Maples, Kelly Gary, and Kent Millitzer.
Additional help from Michael Lello, Peter Barber, and Gavin Kallman.
Our acting co -head of audio is Topher Forges.
And our theme song is by Metaphor Music.
When will M &A activity pick up?
Will this year mark the return of IPOs?
Listen to Strategic Alternatives, a podcast from RBC Capital Markets, to get insights on these questions and more.
Explore the trends and market forces impacting deal flow and find out how companies and investors are shifting their strategies to drive growth and unlock value.
Listen and subscribe to Strategic Alternatives today.
Available wherever you get your podcasts.
Comcast Business High Five Hotline.
I signed my business up for the 5 -year price lock guarantee and I can't stop high -fiving people.
That's perfectly natural when you sign up for GigSpeed Internet and Advanced Security.
Locked in at a great rate for 5 years.
Really? That's great news.
High five everybody!
The Comcast Business 5 -Year Price Lock Guarantee is back, but only for a limited time.
Sign up today. Ends 9 -21 -25.
For new customers with qualifying bundle.
Current customer eligibility varies by service and area.
Guaranteed rate applies to monthly service charge excluding taxes and fees.
Other restrictions apply.
