Edition 4

Oct 16, 2025

Your Business Snapshot:

US China tariff threats jolted markets, lifted safe havens, and revived tit for tat worries about trade.
Fintech dealmaking is surging in 2025 as established firms buy proven software platforms for scale and stickiness.
Markets look strong yet fragile, with tech led gains and record valuations set against rising household and corporate debt, suggesting momentum may be masking late cycle risk.
From HMRC’s £4.6bn boost to Clarivate’s prize picks, big data spread across sectors, improving efficiency while keeping privacy rules in focus.

Economics

US China tensions flare again

Donald Trump has threatened to impose additional tariffs of 100% on China, following a package of export controls on rare earth metals introduced by China on the 9th of October[1]. The US president accused China of taking an ‘aggressive trade stance’ and has since suggested cancelling a planned meeting at the end of October with President Xi Jinping.

China’s new trade package significantly threatens the US’s dominance in consumer technology products and military equipment, which heavily rely on the rare earth metals that China has decided to exercise control over[2]. The retaliatory tariffs from the US would push the tariff rate on China to 130%, given that they are 30% following de-escalation over recent months[5]. This would impact many US companies, such as Apple, which assembles over 90% of their products in China. Trump also announced new export controls on ‘any and all critical software’[2], which signals a ramping up of the continued technology race between the countries.

Markets reacted immediately following the announcements, with the S&P falling 2.7% (its worst day since the 10th of April - liberation day) and the Nasdaq falling 3.5% on Friday. This signals a poor response to the restructuring of global supply chain risk, with added economic uncertainty and potentially lower growth forecasts following the announcement. Alternatively we saw safe-haven assets like gold and government bonds rise in price, with gold in particular rising to $4000-per-troy ounce, a milestone figure.

There is some debate about the long-term implications of this tariff war and the economic effects it may bring. On the 8th of October, the day before China’s export control announcements, the Economist wrote a piece titled ‘Why Donald Trump’s tariffs are failing to break global trade’, which detailed a positive outlook through high GDP growth, high consumer spending and a booming stock market. There is the possibility that this time may be different. Unlike the global attack on liberation day, Trump has again targeted China, who may leverage their importance to the US and either force it to back down, or let the US suffer the economic consequences of its actions. The term ‘Trump always chickens out’ has been heard many times throughout Washington and Wall Street this year, so it could only be soon that more decisive action is made.

This new evolution in the global tariff war has seen ‘tit-for-tat’ actions from the US and China, and has shocked the stock market. The question has now turned to what the future holds in this global predicament.

Business

FinTech Consolidation Heats Up

FinTech dealmaking is no longer niche, it has become central to how financial services evolve. In 2025, the scale of mergers and acquisitions suggests that established financial players are buying innovation rather than building it.

A standout example is Carlyle’s acquisition of Intelliflo, the UK-based wealth-tech platform, from Invesco. Announced in August, the deal was valued at up to $200 million, including earn-outs, and will see Carlyle take control of Intelliflo’s software suite for independent financial advisers[6]. Invesco had originally purchased the firm in 2018 as part of a digital-advice strategy that struggled to scale globally. By contrast, Carlyle plans to reposition Intelliflo as a pure-play software provider, expanding into Europe and the U.S.

The deal is emblematic of a wider trend. According to FT Partners’ FinTech Almanac, global FinTech M&A volume reached its highest level since 2021, with over 450 transactions in Q2 2025, a 23% increase year-on-year. Funding has shifted decisively away from early-stage ventures towards profitable, recurring-revenue platforms[7]. The narrative of the moment is consolidation: scale, synergies, and stability.

Payments and WealthTech are leading this charge. In payments, Global Payments’ $24.25 billion acquisition of Worldpay earlier this year marked one of the largest FinTech integrations since Visa-Plaid was first proposed[8]. Meanwhile, wealth-management software providers such as Intelliflo and FNZ are becoming strategic infrastructure, the operating systems through which advisers, insurers, and asset managers interact with clients.

Customer stickiness is rising: once financial institutions embed a platform, the cost of switching becomes prohibitive. Acquiring those vendors locks in distribution and data. Scale economies matter too. Compliance, cybersecurity, and AI integration require large capital outlays that smaller players cannot sustain. For private-equity buyers, that creates an opportunity to consolidate fragmented verticals under a single brand.

Yet there are warning signs. Integration costs and cultural friction can erode deal value; valuations remain elevated despite slower growth; and regulatory scrutiny is intensifying. Even Invesco’s exit from Intelliflo highlights that not every acquisition aligns with strategic timing or capability.

For the next generation entering finance, FinTech M&A is a case study in convergence where software, data, and capital markets intersect.

Markets

When the Numbers Don’t Add Up

Everything seems clear in hindsight. The challenge is recognising the warning lights before they flash red.

Across the world’s largest markets, valuation and credit indicators are sending conflicting but increasingly uneasy signals. The Buffett Indicator, the ratio of total U.S. market capitalisation to GDP, currently stands near 220%, one of the highest readings on record[10]. Historically, levels above 150% have often preceded periods of correction, from the dot-com bubble to the 2008 crisis. In essence, U.S. equities are now priced at more than twice the value of the economy supporting them.

Technology stocks remain the driving force. The NASDAQ 100 has gained more than 20% year-to-date, propelled by Nvidia, Apple and Microsoft, which together account for roughly a third of the index’s rise[11]. Nvidia’s valuation briefly exceeded $3 trillion, trading at 35 times forward earnings, a level implying years of uninterrupted growth. The logic is self-reinforcing: investors continue to allocate to what has worked, particularly in AI, even as traditional valuation anchors slip.

Meanwhile, the foundations of household and corporate balance sheets are weakening. Total U.S. household debt has reached a record $18 trillion, while credit-card delinquencies have risen to their highest level since 2011[12]. Corporate leverage, at $13 trillion, continues to rise, and private-credit markets now manage over $1.7 trillion in assets, a 30% increase in just two years[13]. This expansion has provided liquidity to markets, but also embedded leverage in areas beyond the reach of traditional regulation.

Even long-time contrarians are uneasy. Michael Burry, famed for anticipating the 2008 subprime collapse, has taken short positions against Nvidia and other technology leaders, describing current valuations as “unsustainable”[14]. His trade reflects the broader anxiety that markets may be pricing perfection in an imperfect economy.

Yet it would be premature to call this a bubble certain to burst. Many large technology companies today hold net-cash balance sheets, generate strong free cash flow, and dominate industries with structural tailwinds. The financial system is also more robust than in past cycles: bank capital ratios are higher, liquidity facilities deeper, and policymakers far more responsive to stress[11].

Still, valuations rarely defy gravity indefinitely. The Shiller CAPE ratio (cyclically adjusted PE ratio), above 33, sits roughly 40% higher than its long-term mean. The U.S. fiscal deficit, now over 6% of GDP, adds further strain, while investor sentiment surveys show optimism at multi-year highs; historically a late-cycle indicator.

The real risk today lies not in missing the next rally, but in mistaking momentum for stability. Investors have grown used to buying what has worked, particularly large-cap tech, yet the sustainability of these returns depends on earnings that can justify valuations, not narratives that inflate them. For those entering finance or building portfolios, the lesson is simple: strength built on confidence alone rarely endures.

Tech

HMRC shows data’s dividends

It has been announced this week that the use of ‘Big Data’ within government has allowed the UK’s HMRC to bring in an extra £4.6 billion in revenue for the 2024-2025 tax year[15]. This could be a positive sign of things to come in the world of big Data and tech as the benefits of AI begin to shine through in the private and public sectors.

Big data is a highly innovative sector driven by big names firms such as Amazon , Microsoft, Alphabet, IBM, Oracle and Snowflake, which have been leveraging cloud technology and AI. The market for big data is predicted to reach about $383.4 billion by 2030, with a CAGR (Compound annual growth rate) of 11.0%[16]. This growth has been driven by a number of key factors, such as technological advancements in data storage, processing and analytics, which have lowered the barriers to entry for firms to adopt its usage. This is evident by traditional institutions like HMRC engaging in a more pro-active approach to technology.

Its uses are also becoming more far reaching, last week the Economist revealed the work being carried out by Clarivate, a firm of analysts who have engaged in an annual tradition of predicting upcoming Nobel Prize winners using big data. This filters through 64 million research papers searching for ‘Citation Laureates’[17]. As mentioned prior, we also saw it being used in the public sector, with HMRC using the software ‘Connect’ to identify patterns when it comes to tax payments. This enables more decisive action in tax investigations and has allowed the UK government to reduce the ‘tax gap’ by £4.6 billion, which currently stands at £46.8 billion, a significant portion of the government's total tax take.

Big data can be perceived as a security threat, with a significant trade-off between data utility and usability versus consumer privacy. However, regulations such as the GDPR, CCPA and HIPAA tighten the compliance surrounding this concern with big data[18]. It must however be said that there are still an overwhelming number of benefits in the industry, big data is likely to seep its way into the operations of much smaller scale shops, factories and organisations allowing more tailored and informed decisions. This could create a wave of operational efficiency improvements in SMEs with the UK and other countries alike.

As seen last week ‘Big data’ has brought a number of positive contributions and this is likely to continue.

Bonus Section

Weekly Quiz

Which US state enacted a new frontier AI transparency law last week?
A. Texas
B. New York
C. California
D. Florida
Which European country’s national AI law came into force on 10 October 2025?
A. Germany
B. Spain
C. Italy
D. Netherlands
About where did Brent crude settle on Friday 10 October 2025?
A. $93
B. $83
C. $73
D. $63
Which G7 economy announced the largest curb in consumer spending last week?
A. United Kingdom
B. Japan
C. Canada
D. Germany
Which European bank announced major fund exposure to the First Brand bankruptcy last week?
A. HSBC
B. UBS
C. BNP Paribas
D. Deutsche Bank