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 a landmark jury verdict that could reshape social media’s business model, collapsing UK consumer confidence amidst the Iran war, and why the Bank of England’s hawkish rhetoric may not translate into actual rate hikes.
But first, our number of the week…
-10.8%
That’s how much the stock of Samsung fell this week through Thursday following Google’s latest memory compression breakthrough. Google’s new technique could dramatically cut the amount of memory required by AI models, threatening hardware manufacturers like Samsung.
Sidekick Takeaway: Samsung’s sell-off echoes the DeepSeek panic earlier this year, showcasing the continued rapidity of AI innovation. However, several analysts have invoked the Jevons Paradox: if running AI gets cheaper, adoption rises, and total memory demand may actually increase.
Only have a minute to read? Here’s the TL;DR:
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.
Hooked: Social Media Giants Face Their Big Tobacco Moment
For years, US social media companies have been largely shielded from legal liability.
Thanks to a long-standing US law known as ‘Section 230,’ platforms like Instagram and YouTube could not be held responsible for the content their users posted.
But this week, a jury in California found Meta and Google liable for harming a young user – not because of the content on their platforms, but because of how the platforms themselves are designed.
The verdict marks a potential turning point for two of the world’s most valuable companies.
Jury finds social media addictive by design
The recent trial centred on a 20-year-old plaintiff who claimed that over a decade of using Instagram and YouTube caused anxiety, depression, and body dysmorphia.
Crucially, the case bypassed Section 230 by targeting platform design – features like push notifications, infinite scroll, and algorithmic feeds – rather than user-generated content:
Both companies have vowed to appeal.
However, the longer these cases drag on, the greater the reputational damage – and the stronger the momentum for regulatory action.
Sidekick Takeaway: The $6 million award itself is trivial for companies collectively worth several trillion dollars. The real threat is what it enables: a wave of litigation that may ultimately force changes to the engagement-driven features that underpin Meta and Google’s advertising models.
Cold Comfort: UK Consumer Confidence Hits Record Low
The UK economy was supposed to be turning a corner.
After years of post-pandemic inflation and sluggish growth, households were finally beginning to feel some relief. But the Iran war has abruptly reversed that trajectory.
This week, the British Retail Consortium reported that its measure of consumer economic expectations plunged to minus 53 in March.
That’s the worst reading since the tracker began in 2024, and a sharp drop from February.
The collapse in confidence comes at a difficult moment for the Labour government – and for Keir Starmer specifically.
Rising costs, falling sentiment
The Iran war, launched by the US and Israel last month, is driving up energy prices and stoking fears of a fresh inflation spiral:
The UK had only just begun to emerge from the cost-of-living crisis that defined the past few years.
A second wave of energy-driven inflation threatens to undo that progress entirely.
Sidekick Takeaway: Keir Starmer’s political position was already precarious before this confidence collapse, with his approval ratings in freefall. A renewed squeeze on household budgets threatens to imperil his position further, especially given poor confidence over his handling of the Iran conflict.
The Maradona Effect: Why the BoE May Be Bluffing on Rate Hikes
With the Iran war sending oil prices soaring, inflation fears have mounted in the UK.
As a result, markets are now pricing in two to three rate hikes from the Bank of England this year. But not everyone agrees that higher rates are on the horizon.
Writing in the Financial Times this week, Karen Ward, a chief strategist at JPMorgan, argued that the BoE’s hawkish signals are a deliberate feint.
The idea: by convincing businesses and households that rate hikes are coming, the BoE can achieve its economic aims without actually raising rates – a strategy former governor Mervyn King once called the ‘Maradona Effect.’
All bark, no bite?
Ward’s thesis is that hawkish signals from the BoE could suppress price pressures all on their own:
If Ward is right, higher short-term UK rates may be temporary, with the BoE potentially reversing course soon.
Sidekick Takeaway: Despite the market’s confidence, it’s not entirely clear that aggressive hikes from the BoE are coming this year. If the central bank’s words alone can achieve their desired aims, follow-up action may prove unnecessary.
Notices
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