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Europe may well be sleepwalking into deindustrialisation, as Ineos chair Sir Jim Ratcliffe has indicated. But it is hard to see it changing direction. The UK chemicals group Ratcliffe runs — whose debt has been sold off by concerned investors — will not be the last to come under pressure.

The problem, for European commodities chemicals companies such as Ineos Group, its affiliate Ineos Quattro, BASF, Synesqo, Arkema, Evonik and Lanxess, is that producing in the continent is relatively expensive. Natural gas, which accounts for 85 per cent of the cost of manufacturing fertilisers and ammonia, cost Europeans about four times what it did in the US in the third quarter of this year, according to Oxford Economics. Strict environmental standards and carbon costs add to the burden.

That is a formula for disappointment. European companies’ share of the global chemicals market declined from 28 per cent in 2003 to 13 per cent in 2023, according to Barclays research, a trend that has continued since. Sector stocks have underperformed the Euro Stoxx 600 index by more than 30 per cent over the past two years.

The problem is bigger for petrochemicals and commodities chemicals makers, among them Ratcliffe’s companies and others such as Venator and Kem One. Speciality chemicals companies such as Synthomer, Arkema, ASK Chemicals and Seqens have the advantage of relatively less competition, though they are vulnerable to innovation by rivals.

Protectionism might seem like a solution, at least to the companies themselves. Ineos Group said it was filing EU anti-dumping cases against imports of cheap substitutes. As Europe’s fourth-largest industrial sector, chemicals underpin industries including defence, agriculture and pharmaceuticals. But trade curbs risk raising costs for consumers and inviting retaliation. A third of EU chemical sales is exports.

Smaller, leveraged companies have been the first to bear the brunt. Apollo-owned Kem One’s €450mn bond due in 2028 has fallen to 14 cents on the euro. Loans to Seqens have changed hands at roughly half their face value. Chemicals groups account for 5.4 per cent of the European leveraged loan market and are down 2.8 per cent year to date through October on Morningstar’s European Leveraged Loan Index.

That might understate what could be a much graver problem. Barclays analysts argue that, at worst, chemicals groups could find they have a “terminal value” — the sum of their long-term cash flows starting from a few years out — of zero, and should slash their indebtedness sooner rather than later. That leaves a lot of toxic waste to wade through.

gaia.freydefont@ft.com

One scoop to start: Birmingham’s NEC events centre is being lined up for a sale by its private equity owner Blackstone, which hopes the host of everything from dog show Crufts to this year’s Reform UK party conference will fetch roughly £1bn.

In today’s newsletter:

• AI’s fear and loathing in Washington

• Patrick Drahi’s SFR high-wire act

• Abu Dhabi’s deal machine turns over

Is Maga turning on Trump’s AI optimism?

Nvidia, increasingly seen as the bellwether for the global financial system, left investors in limbo on Thursday after its strong earnings did not lead to a stock surge.

Investors have grown edgy over their artificial intelligence bets, which, depending on who one asks, is a massive bubble or the opportunity of a lifetime.

DD has closely covered the money side of the AI boom such as the financial engineering behind data centre projects, the circularity of OpenAI’s deals with tech giants and the private capital groups financing its infrastructure.

Today, we’re dipping our toes into politics and looking at Washington, where there are growing signs of an AI backlash that could cool Wall Street’s hottest trade.

The contradictions of AI politics were on display this week as US President Donald Trump hosted Saudi Arabia’s Crown Prince Mohammed bin Salman and brought tech moguls including Michael Dell, Jensen Huang and Elon Musk to a gala at the White House. During the visit, Trump touted a number of AI deals between the Middle Eastern nation and US tech giants, and approved the sale of chips to the kingdom.

But is Trump’s AI dealmaking with Riyadh and others a winning political message? Unemployment is rising, energy costs in suburban America are surging because of increased demand, and few communities want loud, sprawling boxes of technology in their backyards.

The FT’s Joe Miller reports in a deep dive that Trump’s unfettered embrace of AI and possible neutralisation of regulatory checks are growing increasingly contentious in Washington and within his Republican party.

Trump appears to be acquiescing to lobbying against AI regulations from Silicon Valley titans such as venture capital firm Andreessen Horowitz. Earlier this week, he backed a plan to restrict states from regulating AI, after a similar measure failed by 99 votes to one in the Senate over the summer.

“Shows what money can do,” Republican senator Josh Hawley said of the move. Hawley is a notorious tech sceptic. But there are more mainstream critics such as Florida governor Ron DeSantis who called the plan “an insult to voters”.

Arkansas governor Sarah Huckabee Sanders, who served as Trump’s White House press secretary in his first term, said: “Drop the pre-emption plan now and protect our kids and communities.”

Some Republicans in Congress have warned Trump’s embrace of light-touch AI regulation could hurt them electorally, a person close to the party leadership told the FT, amid concerns about job losses, high energy prices and child safety.

DD expects the AI discourse in Washington will increasingly break unfavourably for the bulls.

The benefits of the technology largely accrue to the billionaires at the White House this week, but are considered a growing threat inside many swing-state households.

French telecoms may have another shot at the Drahi empire

A trio of French telecoms groups are preparing to try again for SFR, the French company owned by billionaire Patrick Drahi’s telecoms empire Altice.

It comes at a busy time for Drahi and his debt-fuelled group.

The French police have been carrying out a sweeping probe into an alleged scheme by employees and suppliers to defraud Altice. (Drahi has previously denied knowledge of the alleged scheme and said the allegations had come “as a huge shock”.)

This year, Drahi renegotiated Altice France’s €24bn debt pile in one of Europe’s biggest such restructurings. He’s been looking to sell assets to pay off some of those loans — and potentially exit telecoms entirely.

On top of all that, his auction house Sotheby’s has been haemorrhaging cash.

Now, fresh from seeing their original €17bn offer rejected last month, French telecoms groups Orange, Bouygues and Iliad are trying again.

The consortium is considering widening the scope of its original bid to include other Altice France assets, in an effort to encourage the French-Israeli tycoon to the negotiating table.

But there are a lot of hurdles. Any sale will have to contend with competition scrutiny, and some in the consortium believe French regulators may look more favourably on a deal than their counterparts in Brussels would, according to people familiar with their thinking.

Drahi is simultaneously running processes to sell some assets within Altice France to separate buyers in an effort to give himself options.

One bid for SFR’s B2B operations has been received, meaning that whatever happens, Drahi will try to play the field.

XRG’s musical chairs

When Abu Dhabi’s national oil company Adnoc puts its mind to something, it doesn’t take very long for the group to dominate.

And over the past year, it has solidified itself as the energy sector’s most ambitious dealmaker through its new vehicle called XRG.

The fledgling entity — which was set up to buy international gas, chemicals and low-carbon energy businesses — has already tried to strike more than $40bn of acquisitions.

XRG had big ambitions from day one. Adnoc CEO Sultan al-Jaber set the bar high, saying last year that it would be a “transformative investment company” and constructed a board of big-hitting finance names like Blackstone president Jon Gray and former BP chief Bernard Looney. 

But the buying machine is now getting a team in place to take those ambitions even further, the FT’s Malcolm Moore and DD’s Ivan Levingston report, with all of the moves resembling something like musical chairs.

First there’s former Goldman Sachs banker Nameer Siddiqui, who’s joining the group as its next chief investment officer. He was most recently an executive at Phillips 66, defending the US refiner against activist investor Elliott Management.

Meanwhile Klaus Froehlich, who led the deals team for XRG and Adnoc, will step back from his role at the former. And XRG chief operating officer Khaled Salmeen will leave the company in January.

All together, the moves add up to serious change after a busy first year of activity.

The group is not slowing down, targeting a continued run of investment with plans to spend between $10bn and $30bn on infrastructure investment over five years, and its enterprise value has risen to $150bn. 

Yet its first year wasn’t all rosy. XRG decided to withdraw a $19bn bid for the Australian oil and gas company Santos, for instance. Now with a new team in place, maybe it’ll make another swing at the group.

Job moves 

• Citigroup chief financial officer Mark Mason is stepping down from his role, and will become executive vice-chair at the US bank. He will be replaced by Gonzalo Luchetti, who currently heads its US retail division.

• The Takeover Panel, the UK’s mergers regulator, has extended the term of director-general Omar Faruqui until the end of July. 

• Willkie Farr & Gallagher has elected 30 new partners, from offices including New York, London and Los Angeles. The group includes about a dozen lawyers from the corporate and financial services team.

Smart reads

Losing interest It’s not just LPs wondering whether their promised PE returns will ever materialise. Private equity employees are quitting some of the industry’s biggest firms, The Wall Street Journal reports, as they grow tired of waiting for their “carry”. 

Trump bump The credit the US extended to Argentina ahead of elections last month was a lifeline for Javier Milei — and a boon for a group of hedge funds, the FT reports. 

Cantor deals US commerce secretary Howard Lutnick is the country’s dealmaker and bruiser in chief. But he’s promoting data centre projects that are creating huge business for companies run by his sons, The New York Times reports. 

News round-up

SEC weighs looser independence rules for Big Four auditors (FT)

Top Fed official warns on risk hedge funds pose to $30tn Treasury market (FT)

Walmart to shift listing to Nasdaq as retailer raises sales forecasts (FT)

US healthcare group Abbott bets on cancer screening technology in $23bn deal (FT)

Paramount makes surprise knockout bid for UK Champions League rights (FT)

Big Four partner promotions sink to five-year low in UK (FT)

US banks shelve $20bn bailout plan for Argentina (WSJ)

This is an audio transcript of the FT News Briefing podcast episode: ‘The Big Tech stock rollercoaster’

Marc Filippino
Good morning from the Financial Times. Today is Friday, November 21st, and this is your FT News Briefing. The Nasdaq rollercoaster ride is giving everybody motion sickness. And the US is finally releasing economic data again, but it’s a bit hard to parse. Plus, a peace treaty from Russia and the US isn’t getting much traction in Ukraine. I’m Marc Filippino, and here’s the news you need to start your day.

[MUSIC PLAYING]

It seemed like for a little bit that Nvidia’s strong earnings had bailed out the tech stock sell-off. On Wednesday, the American chipmaker reported better than expected earnings. And yesterday morning, the tech-heavy Nasdaq surged nearly 2.5 per cent, but it all went downhill from there. The index end of the day, pretty much wiping out all its earlier gains, closing down more than 2 per cent.

[MUSIC PLAYING]

The S&P 500, which has been mostly propped up by tech stocks, fell a little bit more than 1.5 per cent here to make sense of all this as the FT’s markets columnist, Katie Martin. Hi, Katie.

Katie Martin
Hey. How you doing?

Marc Filippino
I’m doing well. Like I mentioned, risky assets like stocks and crypto have been dipping lately since about October, but before that, they were going gangbusters. Can you give us a little context on their performance and what drove that rally?

Katie Martin
Yeah, so we obviously had a big shock to markets and stocks. Fell really hard in April after Donald Trump unveiled these global trade tariffs. And then pretty much the moment that he said, OK, I’m gonna backtrack on some of the more extreme elements here, it’s just been one-way traffic, this huge recovery that’s taken place. And that’s built on a few things. It’s built on this idea that, you know, we’re all familiar with this Taco trade, right? Trump always chickens out. There’s this idea that he will always back away from the more extreme stuff. There’s the fact that earnings have actually been pretty good and the US economy has been much more resilient, the effect of tariffs and to policy uncertainty than people have been expecting. So has just been an incredibly impressive rise in US and global stocks ever since April, and that just kind of ran out of steam a bit in recent weeks.

Marc Filippino
Yeah, let’s talk about that specifically. As I mentioned, it started around early October and there were a few things that I think combined to get investors a little worked up.

Katie Martin
What happened? Well, so, OK. There’s an element of cherry-picking here, but you can see reasons for caution or for alarm in lots of different parts of markets. At the moment, you look over at the private credit market where there’ve been a few blow-ups recently, and that has got people worried about lending standards in private credit, about the prevalence of fraud there.

Marc Filippino
This is the First Brands thing, right?

Katie Martin
This is First Brands tricolour. It’s just a little cluster of these things and it makes people think, hmm, I remember 2007. Is this a repeat of that? And then you just look at the valuation of some of these AI tech stocks and some of the huge deals they’re doing with each other, and it all just adds up to this picture that, hang on, is this a bubble and is it gonna pop like now?

Marc Filippino
Now, like I had mentioned Nvidia for a moment anyway, swooped in and kind of eased those concerns with its earnings report on Wednesday. What was it exactly in that report that got everyone, even if briefly, in such a good mood?

Katie Martin
It’s not just any old chipmaker, right? This is like the biggest company on the planet. It absolutely dominates the performance of all the big stocks, indices in the states and globally, and it’s just this prime example of a company that’s right in the centre of the AI trade. You know, the thinking for a lot of investors is, well, if Nvidia is OK, then that means the AI trade is OK. And Nvidia is super, OK. So it reported a 62 per cent rise in its revenues in the three months that ended in October, which was much more than investors have been anticipating, and its revenue forecasts are still like much higher than people have been thinking. And so it’s pretty clear that this company is still selling.

A lot of chips and its chief executive Jensen Huang said there’s been a lot of talk about an AI bubble. From our vantage point, we see something very different. One thing that’s really important here to remember is that even if you accept that it’s a bubble and there are some excesses going on here, there’s no reason to think it has to pop today or tomorrow or next week. But the fact is they are still scooping up the money, cranking out the chips. Everybody’s happy. So this has certainly lightened the mood and helped some of these things to keep running towards the end of the year, but no one’s sounding the all-clear just yet.

Marc Filippino
That’s the FT’s Katie Martin in London. Thanks as always, Katie.

Katie Martin
Pleasure.

[MUSIC PLAYING]

Marc Filippino
We’re getting more clues about the health of the US economy after a more than month-long delay due to the government shutdown. The labour department released the September jobs report yesterday. It showed 119,000 jobs were added to the economy, a way higher number than expected, but the unemployment rate also reached its highest level in four years. And figures for the previous two months were revised lower by a combined 33,000 jobs. Analysts say the data will complicate the Federal Reserve’s interest rate decision next month. That’s because the jobs report gives a little something to the hawks and a little something to the doves, and the Fed is already split on whether to cut rates.

[MUSIC PLAYING]

The war in Ukraine is still raging despite the Trump administration trying to broker a peace deal. The US and Russia drafted a new peace plan this week without Kyiv’s involvement. Here to give us an update about what’s happening on the battlefield and at the negotiating table is Chris Miller. He covers Ukraine for the FT. Hi Chris.

Chris Miller
Hey Marc.

Marc Filippino
So let’s start with an update on the war itself. Where do things stand on the battlefield?

Chris Miller
Well, right now the Russians are still gaining territory moving forward on the ground, specifically around a couple of hotspots in eastern Ukraine. They’re pushing ahead slowly but surely. They’re using also their missiles and drones to attack Ukraine’s critical infrastructure. And as we’re speaking, actually much of the country is without power or on these rolling blackout schedules. Some are without water, some are without heating. So the pressure really is mounting on Ukraine and you know, we’re looking at a political situation also in Ukraine that could further destabilise things or make it at least very difficult for Zelenskyy going forward amid a big corruption scandal that’s really rocked his office.

Marc Filippino
And you know, I mentioned this peace plan. What do we know about it?

Chris Miller
What we know is that this was an apparently really hastily drawn up proposal put forward by Donald Trump’s Russia envoy, Steve Witkoff, and an envoy of Vladimir Putin, Kirill Dmitriev. And it really is very much the Kremlin position and envisages major concessions by, of including the reduction of its military by more than half. The concession of territory in eastern Ukraine that Ukraine currently controls still. It also calls for Ukraine declaring its neutrality and dropping its bid to join Nato. And so these are all things that are big, clear red lines for Kyiv, meaning that they would never go along with this.

Marc Filippino
This is a little bit about what I was gonna ask you about next, which is, given that Ukraine is not going to agree to this, why bother drafting it in the first place? Is it just so that they can have something to bring to the negotiating table?

Chris Miller
Well, I think the Trump administration is getting tired of not seeing a deal done. He said repeatedly that he’s tired of the war and that he wants to see the killing stop. But he has done little actually, besides sanctioning some of Russia’s top gas companies, to really push the Russians to the negotiating table.

We’ve seen since the beginning of Donald Trump’s presidency that the Russian position hasn’t changed. In fact, it hasn’t changed since the beginning of the war. But where the Trump administration has applied pressure and asked for concessions is on the Ukrainian side where it believes it has more leverage given the fact that the United States is the biggest political and military backer of the country.

Marc Filippino
And we should mention Chris, that Ukrainian officials told the FT, the Trump administration is putting a ton of pressure on Kyiv to accept the agreement. So what happens next? Do you think we could see any movement in the peace process?

Chris Miller
I really don’t think so. You know, there hasn’t been any movement really since Donald Trump came to office. And so what I think is likely to happen is we’re going to see the war ramp up and things get more serious on the battlefield and in the air war over the winter. It’ll be a really tough winter for Ukraine. They’ll continue to try to push counter proposals. To bring the United States more closely in line with its position and try to apply more pressure on Russia to get it to negotiate in earnest. But all of this means that I think the war is going to go on for several more months, if not through much of 2026.

Marc Filippino
That’s the FT’s chief Ukraine correspondent Chris Miller. Thanks Chris.

Chris Miller
Thanks, Marc.

Marc Filippino
Before we go, the news flow is so fast and furious these days, so we thought we would start a new Friday tradition where we look into our news crystal ball at some of the big stories we’re keeping tabs on over the next week. Victoria Craig, who hosts the Monday edition of the FT News Briefing is here to peer into that other dimension with me. Hi Victoria.

Victoria Craig
Hey, Marc.

Marc Filippino
All right, so what’s on tap for the week ahead?

Victoria Craig
Well, plenty of drama at the G20 summit in South Africa, and that’s before it even begins. It’s not because of the content, what’s gonna be happening at the summit, but because of the guest list. And that’s because until Thursday afternoon, President Trump said that the US would not participate in the summit.

He said that America is sitting this one out because. White Afrikaners were being, quote, slaughtered in South Africa. That is a false claim that he’s made repeatedly since he returned to the White House earlier this year. If the US doesn’t send a delegation, it will be the first time any G20 member has completely boycotted the event, which has been running for almost three decades now.

And so back to the drama, there’s been a lot of chatter about whether the United States is reconsidering its decision not to attend. South Africa says that it is. The Trump administration, though, calls it fake news. And here’s White House press secretary Caroline Levitt speaking on the issue yesterday.

Caroline Levitt
The representative of the embassy in South Africa is simply there to recognise that the United States will be the host of the G 20. They are receiving that send-off at the end of the event. They are not there to participate in official talks despite what the South African President is falsely claiming.

Victoria Craig
So Marc, President Trump has said that he’s gonna host next year’s G20 at one of his golf courses near Miami, Florida. Until then, it’s a bit of a mismatch about expectations over the United States role in this summit in Johannesburg. So we’ll have all the very latest from our correspondence at the summit, which begins on Saturday. So, you know, stay tuned to this very podcast.

Marc Filippino
Yeah, we’ll keep an eye out for that story and more in Monday’s edition of The Briefing. Have a good weekend, Victoria.

Victoria Craig
Thanks, Marc. You too.

Marc Filippino
You could read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Julia Webster, Persis Love, Lucy Baldwin, Victoria Craig, Sonja Hutson, Fiona Symon and Mischa Frankl-Duval. I’m your host and editor, Marc Filippino. Our show is mixed by Alex Higgins, Kent Militzer, and Kelly Garry.

We had help this week from Peter Barber, Michael Lello and Gavin Kallmann. Our acting co-head of audio is Topher Forhecz and our theme song is by Metaphor Music.