Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at the systemic risks of Anthropic’s latest model, the US blockade of Iran putting pressure on China, and the UK government’s defence-fiscal contradiction.
But first, our number of the week…
18.9%
That's the share of Tesla Cybertrucks registered in the US during Q4 2025 that were bought by SpaceX and Elon Musk’s other ventures. Without those intra-empire sales, Cybertruck registrations would have fallen by 51%.
Sidekick Takeaway: With SpaceX gearing up for what could be the largest IPO in history, the web of connections between Elon Musk’s firms has never been deeper. These Cybertruck purchases show how much the Musk empire now functions as a single commercial ecosystem rather than a set of independent companies.
Only have a minute to read? Here’s the TL;DR:
- Anthropic’s new Mythos model appears capable of autonomously identifying and exploiting cyber vulnerabilities, prompting urgent meetings between regulators and major banks in the US and the UK. Regulators now consider AI cyberattack capabilities as a systemic risk to the global financial sector.
- The US imposed a naval blockade on Iran’s ports this week after peace talks in Pakistan collapsed, aiming to cut off Iranian oil exports. The move has drawn sharp condemnation from China – Iran’s largest crude buyer – and raises the risk of a direct US-China confrontation.
- Former NATO chief Lord George Robertson accused the UK government of ‘corrosive complacency’ on defence, underscoring a major spending shortfall that the Treasury has so far refused to close. Although the UK has committed to significant defence spending increases, these commitments haven’t been matched by concrete budget proposals.
It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.
Greek Tragedy: Anthropic’s Mythos Model Raises Systemic Cyber Fears
AI models have long been capable of supporting cyberattacks.
But Anthropic’s latest model (called ‘Mythos’) is different. Rather than just support cyberattacks, Mythos appears capable of launching them autonomously.
That distinction matters. Previous models could assist skilled attackers; Mythos can identify and exploit vulnerabilities with minimal human input.
The implications could be devastating. In fact, regulators are now treating the possibility of powerful low-cost cyberattacks as a systemic threat to the financial sector.
For now, Anthropic has held back Mythos from public release, granting access to a small group of firms under ‘Project Glasswing.’
UK and US regulators sound the alarm on Mythos
Governments are moving quickly to assess the implications:
- US Treasury Secretary Scott Bessent and Fed Chair Jerome Powell summoned Wall Street to an urgent meeting last week, warning bank CEOs on the unprecedented cyber risks from Mythos and competing models.
- UK financial regulators are also in talks with the country’s largest banks, insurers, and exchanges. A formal briefing is expected within the next few weeks.
- The risks don’t appear theoretical. Anthropic said Mythos has already ‘found thousands of high-severity vulnerabilities’ during testing, including flaws in every major operating system and web browser.
These threats are concerning. But on the other hand, the same capabilities could make financial defences meaningfully stronger.
Project Glasswing is designed to give systemically important firms a head start on patching vulnerabilities before these models proliferate more widely.
Sidekick Takeaway: Ultimately, banks equipped with Mythos-class defensive tools may end up more secure than they were before. The real risk lies in the transition period. The race between attackers and defenders could have widespread implications for global financial security.
Crude Calculation: US Blockade of Iran Raises the Stakes with China
Last Sunday, US-Iran peace talks collapsed in Pakistan.
A day later, the US made an unprecedented move, imposing a naval blockade on Iran’s ports. The aim: cut off Iranian oil exports and force Tehran back to the table.
It remains to be seen whether the gambit works. But in the meantime, the blockade is putting pressure on another country – China, the largest buyer of Iranian crude.
A confrontation waiting to happen?
Few analysts expect the Iran war to escalate into direct conflict between the US and China.
But unexpected doesn’t mean impossible, and the US blockade raises the odds significantly:
China’s foreign ministry called the blockade ‘irresponsible and dangerous,’ warning it could undermine the fragile ceasefire and jeopardise ships transiting the Strait of Hormuz.
At least one US-sanctioned, Chinese-owned tanker has already attempted to bypass the blockade – only to turn back at the last moment. Other vessels are reportedly waiting to follow, which could test US resolve.
US enforcement action against a Chinese-linked vessel would carry significant geopolitical risks. Separately, Trump has threatened China with an additional 50% tariff if they supply weapons to Iran.
For now, the situation appears relatively contained. The blockade has mostly been enforced through US warnings and ship compliance, rather than direct military action.
But as peace talks continue, the situation has arguably become more volatile, not less.
Sidekick Takeaway: The base case is still de-escalation: neither Washington nor Beijing has a genuine interest in a direct confrontation. But the longer the Strait stays closed, the higher the probability of a devastating miscalculation – and a spiral that neither country can walk away from.
State of Contradiction: UK’s Defence-Fiscal Squeeze Breaks Into the Open
For months, the UK government has tried to have it both ways: commit rhetorically to increased defence spending while holding firm on strict fiscal rules.
This week, a former NATO chief made it clear that both aims cannot coexist.
Lord George Robertson, a key government adviser, accused Keir Starmer of ‘corrosive complacency’ toward defence. He also blamed Treasury officials for ‘vandalism’ in constraining the military budget.
His outspoken comments underscore a defence spending contradiction that the government has yet to solve.
A £28bn shortfall, and no plan to close it
The numbers lay out the problem starkly:
- The Ministry of Defence has identified a £28bn spending shortfall in existing defence plans over the next four years. That’s before further ambitions recommended by the government’s Strategic Defence Review are taken into account.
- Chancellor Rachel Reeves has reportedly proposed increasing defence spending by less than £10bn over the same period, roughly a third of the gap. Treasury officials have refused to loosen fiscal rules in order to plug it.
- The government is targeting defence spending increases worth 3% of GDP, rising to NATO’s wider 5% national security goal by 2035. But with no credible budget blueprint, those figures remain aspirational.
Without a reform to the UK’s fiscal rules, the only options to fund increased defence spending are tax rises or cuts to other departments.
These levers would carry heavy political costs, potentially undermining the UK’s rearmament at a time when the case for it has rarely been stronger.
Sidekick Takeaway: The UK’s fiscal rules are the single biggest obstacle to the government’s defence commitments. Lord Robertson’s comments simply name a contradiction that’s been festering for months – one that demands a serious and thoughtful resolution.
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