What’s Moving Markets: Credit Strains, Fed Politics, and Tech Bets

22nd August 2025

The UK is weighing scrapping stamp duty in favor of an annual property tax on sellers of higher-value homes, a move that could reshape affordability and rental markets.

On Wall Street, analysts are racing to lift Nvidia’s price targets ahead of earnings, betting on its AI dominance despite broader tech selloffs.

Fed Governor Lisa Cook is facing political attacks and mortgage fraud allegations from Trump allies, though she has denied wrongdoing and vowed not to step down.

Meta is dangling nine-figure offers to lure AI talent, but cultural turmoil and a late start in the AI race are undermining its appeal.

In private credit, defaults and quiet restructurings are creeping higher, raising concerns that risks have been underestimated.

Meanwhile, publicly listed private equity firms continue to lag in the stock market even as they gain new access to the 401(k) retirement market. All in today’s Read It and Eat!

Major Headlines 

• Property Tax Reform? Government Considers Scrapping Stamp Duty

The government is weighing a major shake-up of stamp duty that could see it scrapped in favour of a new national property tax, according to industry reports.

Under the proposals, sellers of homes worth more than £500,000 would face an annual tax, rather than buyers paying a one-off duty. The idea is to boost tax revenues while easing the cost of moving for most property buyers. For example, sellers of properties above £500,000 could face a yearly charge of 0.54%, rising to 0.81% for homes valued at more than £1 million.

At present, stamp duty is paid by buyers, with first-time buyers enjoying some relief on purchases under £500,000. Landlords and second-home buyers face an additional surcharge of 5% on top of standard rates and reports suggest that’s unlikely to change under the new system.

The shake-up, which would only apply in England and Northern Ireland, could affect about one in five property sales. Unsurprisingly, the impact would be felt most in London and the South East, where higher-value homes dominate the market.

For landlords, the potential change is a mixed bag. In the short term, it might spark a rush of sellers offloading properties above the £500,000 threshold creating opportunities for buyers. But over time, sellers could inflate asking prices to offset the new tax, pushing property costs higher for investors. That, combined with the ongoing surcharge, might discourage landlords from expanding their portfolios.

The upshot? A tighter rental market and higher rents if fewer landlords choose to buy. With Chancellor Rachel Reeves preparing for the Autumn Budget, all eyes are now on whether stamp duty really will be overhauled  and what it could mean for both homeowners and landlords. Simply business 

• Wall Street Ramps Up Nvidia Targets Ahead of Earnings

Wall Street analysts are racing to raise their forecasts for Nvidia ahead of the chipmaker’s quarterly results on Aug. 27. At least nine analysts boosted their 12-month price targets this week, pushing the average up 3% to nearly $194 the highest on record. That implies more than 10% upside from Wednesday’s close. “What you’re seeing is the recognition that growth at Nvidia is rock solid,” said Brian Mulberry, portfolio manager at Zacks Investment Management.

The wave of optimism comes even as megacap tech stocks, including Nvidia, have been caught in a broader market selloff. Profit-taking, doubts about September rate cuts, and anticipation around Fed Chair Jerome Powell’s Friday speech have weighed on the S&P 500. Nvidia shares have slipped for three straight sessions but are still up about 30% since May’s earnings release.

Analysts point to Nvidia’s role at the heart of the AI boom as reason for confidence. The company derives roughly 40% of its revenue from Meta, Microsoft, Alphabet, and Amazon  all of which have signaled billions in new capital spending this earnings season. With double-digit revenue growth expected again, investors are watching whether Nvidia can keep momentum going, particularly in China. Cantor Fitzgerald analysts lifted their price target to $240 from $200, arguing that “any progress” in the Chinese market would be well received.

Nearly 90% of analysts now rate Nvidia a buy, with firms including Wedbush, UBS, Morgan Stanley, and Susquehanna joining this week’s upgrades. But elevated expectations cut both ways. As Mulberry put it, “It could have a very outsized impact if there were some type of a disappointment. It’s just the likelihood of them disappointing expectations is very low.” Yahoo.Finance 

• Fed Governor Cook Faces Trump Attacks, Mortgage Fraud Allegations, and DOJ Probe

Federal Reserve Governor Lisa Cook is facing mounting political pressure after President Donald Trump called for her resignation over allegations of mortgage fraud  a claim she has firmly denied, vowing she will not be “bullied” into stepping down.

The controversy began earlier this week when William Pulte, head of the Federal Housing Finance Agency and a Trump ally, sent a referral letter to the Justice Department alleging that Cook falsified property records in Michigan and Georgia to secure favorable mortgage terms. He published the claims online, suggesting the signatures on mortgage documents pointed to fraud. Trump quickly seized on the accusations, demanding Cook’s immediate resignation on Truth Social.

Cook, appointed by President Joe Biden in 2022 and the first Black woman to serve as a Fed governor, dismissed the accusations as politically motivated. She said the issue stemmed from a routine loan application years before she joined the central bank and emphasized her commitment to answering “legitimate questions” while continuing her work.

Bloomberg later reported that the Justice Department is preparing to investigate the matter, with a senior official urging Fed Chair Jerome Powell to remove Cook. Legal experts note, however, that Powell has no authority to oust a sitting governor, who serves a 14-year term. The DOJ itself has not confirmed an investigation, and Fed officials have rallied behind Cook, with Cleveland Fed President Beth Hammack describing her as “an outstanding economist and a person of high integrity.”

The clash comes amid Trump’s broader push to reshape the central bank, pressure it into steep interest-rate cuts, and install loyalists on its board. Earlier this month, Fed Governor Adriana Kugler resigned, opening the door for Trump to nominate Stephen Miran, an economic adviser supportive of his tariffs and rate-cut agenda. Powell is due to speak at the Fed’s Jackson Hole symposium on Friday, where investors hope for clues on the central bank’s next move.

For now, Cook remains defiant. “I have no intention of being bullied to step down,” she said in a statement. “I will provide the facts and continue to serve.” BBC 

• How Meta Became Toxic Ground for Top AI Talent

Last month, headlines lit up with stories of jaw-dropping job offers in tech in some cases, worth hundreds of millions of dollars. At a time when much of Silicon Valley is tightening its belt, AI researchers were suddenly being courted like NBA free agents. But here’s the kicker: the eye-popping offers were almost all coming from one place Meta.

The company has been on an aggressive hiring spree, dangling nine-figure packages at top engineers while rivals like Google, Microsoft, OpenAI, and Anthropic hold their ground. Why the disparity? Because, in the AI talent market, Meta has a unique problem: reputation. Despite its deep pockets, the company has struggled to convince elite researchers that it’s the place to build the future of artificial intelligence.

Part of this is timing. Meta was late to the current AI race, pivoting awkwardly after betting big on the metaverse. Its models lag behind the leaders, its strategy feels muddled, and Mark Zuckerberg’s attempts at AI evangelism have landed flat even within the industry. Compared to competitors that offer a sense of mission, research purity, or simply the excitement of working alongside certain high-profile founders, Meta often comes across as unfocused and unconvincing.

But deeper cultural issues are at play too. Inside the company, constant reorganizations, unclear priorities, and punishing expectations have chipped away at morale. Employees describe fear of being fired, instability in team structures, and a lack of camaraderie. A widely shared internal memo went so far as to call the company’s AI division a “metastatic cancer” on its work culture. Even when leadership pushes back, the defense sounds less like reassurance and more like confirmation that things aren’t well.

For years, Meta was considered a solid even enviable  place to work: high pay, strong benefits, productive if not exactly inspiring. Now, it seems the costs of endless reinvention and heavy-handed management are catching up. And in the high-stakes AI arms race, billion-dollar job offers aren’t a sign of dominance. They’re a signal that Meta, despite its resources, may have only one way left to compete. CNBC 

• Cracks Emerge in Private Credit as Private Equity Holdings Struggle

The $1.7 trillion private credit market long marketed as one of Wall Street’s most dependable profit engines is beginning to show signs of strain. Analysts warn that defaults, or restructurings that closely resemble them, are quietly on the rise, raising concerns about whether investors have been underestimating risks. Official default rates hover around 2% to 3%, but when factoring in non-accrual loans and behind-the-scenes restructurings, the true figure could be closer to 5% or 6%, according to JPMorgan, S&P, and Lincoln International.

For years, private lenders kept defaults in check by quietly renegotiating terms with borrowers extending maturities, loosening covenants, or deferring interest payments. That flexibility helped cushion shocks during the pandemic but may also have masked deeper structural weaknesses. JPMorgan analysts caution that a flood of capital into the sector has pressured underwriting standards, creating vulnerabilities if market conditions worsen. Lincoln’s so-called “shadow default rate” has already doubled since 2021, underscoring that stress is building beneath the surface.

Yet the strain isn’t confined to private credit. Publicly listed private equity firms, despite gaining a foothold in the massive 401(k) retirement market, have seen their shares lag. The irony is hard to miss: while the asset class continues to attract capital on promises of diversification and high returns, stock market investors appear less convinced about near-term prospects.

Together, the two trends point to a broader reality check for alternative asset managers. Falling interest rates may relieve some pressure on indebted companies, and resilient businesses are still finding ways to adapt. But with defaults edging higher and equity valuations underperforming, the once-unshakable narrative of private markets as a safe and steady bet looks increasingly open to challenge. Yahoo.Finance 

Minor Headlines 

• London Underground workers plan strike next month over pay dispute. CityAM

• Standard Chartered shares climb after U.S. court ruling. Reuters 

• European stocks inch higher ahead of Powell remarks. Morning Brew 

• Apple TV+ Subscription Jumps From $10 to $13 in the U.S. Bloomberg 

• Serena Williams Becomes Face of Ro’s Weight-Loss Drug Push. CNBC 

• South Korea prioritizes AI investment to revive slowing economy. Reuters

• Sony Announces $50 Increase for PlayStation 5 Consoles Due to Tariffs. CNBC

• DHL halts business parcel shipments to US from Germany. Reuters

Earnings 

Retail & Consumer

• Target – Topped Q2 estimates (digital, cost control), named new CEO despite sales decline. CNBC 

• TJX – Beat Q2, raised guidance; strong traffic, tariffs offset by off-price model.Reuters 

• Lowe’s – Beat profit estimates, steady revenue; pushing pro strategy despite muted big-ticket demand. CNBC 

• Home Depot – Missed Q2 but kept outlook; transactions fell, online sales +12%. Financial Times 

Consumer Goods / Luxury

• Estée Lauder – Missed Q2, trimmed outlook due to tariffs and weak China demand. Financial Times 

• Pop Mart – Profit surged 400%, revenue +204% on Labubu craze and global expansion. CNBC 

Tech / Internet

• Baidu – Revenue miss; ads down 15%, cloud/AI growth failed to offset slowdown. CNBC 

• Palo Alto Networks – Beat estimates across the board, raised guidance; CTO to retire after CyberArk deal. CNBC 

Commodities / Industrials

• BHP – Profits down 26% (post-Covid low) on weaker iron ore & copper, despite record copper output. Reuters