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 private markets, Musk’s merger, and the UK budget.

But first, our number of the week…

50%

That’s how much America’s tariff rate will be on Lesotho, the highest of any African nation. Lesotho is a tiny, landlocked country with a GDP per capita of around $1,000 that primarily exports textiles and diamonds to the US.

Sidekick Takeaway: The Lesotho example highlights how arbitrary Trump’s ‘Liberation Day’ tariffs are. Reporting indicates that the calculated rates are based on a country’s trade surplus with the US divided by total exports, a figure with little economic justification. 

Now to our main stories…

Only have a minute to read? Here’s the TL;DR:

• In his annual letter to investors, BlackRock CEO Larry Fink underscored the importance of democratising access to wealth-building opportunities in private markets. In the coming weeks, Sidekick will unveil our expanded private market offerings.
• Elon Musk’s AI firm xAI will purchase his social media company X in one of the largest M&A deals in recent years. This transaction appears motivated by Musk’s declining business finances paired with X’s substantial debt burden.
• Following Trump’s tariffs, the UK’s £9.9 billion fiscal headroom may have already evaporated. Further spending cuts or tax hikes could imperil Chancellor Reeves’ position, especially given her -30 net approval rating.  

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.

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The Key to Wealth: Unlocking Private Markets

In his annual letter to investors, BlackRock CEO Larry Fink focused on one big theme: unlocking private market investments.

That might seem odd coming from BlackRock. As the largest asset manager in the world, the firm’s flagship products are public stock and bond ETFs.

But as Fink argues, wealth-building today increasingly occurs in private markets – meaning BlackRock, and the rest of the financial industry, needs to evolve.

This is a theme that Sidekick has identified for years. As we prepare to expand our own private markets offering beyond VCTs, we’re continuing to tear down barriers to private asset investing.

Tomorrow’s portfolio: Beyond 60/40

Historically, investors could get by with the classic ‘60/40’ portfolio: a 60% allocation to public stocks and 40% to public bonds.

But with companies taking longer to go public and increasingly turning to private credit borrowing, 60/40 may no longer be sufficient to access a diversified, high-growth pool of assets.

As Fink lays out, tomorrow’s portfolio will need to incorporate private assets to manage these shifts. ‘The future standard portfolio may look more like 50/30/20 – stocks, bonds, and private assets like real estate, infrastructure, and private credit.’

This vision strongly overlaps with Sidekick’s asset allocation suite: personalised core investments in low-cost public funds supported by tactical exposure to private markets and alternatives.

Sidekick Takeaway: For too long, the potential of private markets has been limited to the ultra-wealthy. Over the coming weeks, we’re excited to share more about our expanded private market offerings, helping push the financial industry toward a more democratised vision of wealth-building.

Please remember with private markets, these products are high-risk investments and you are unlikely to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. Our upcoming private markets offering will be available to Sophisticated and High Net Worth Investors only.

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Musk’s Major Merger: xAI Buys X

In an unexpected move, Elon Musk announced this week that his artificial intelligence xAI would acquire his social media company X.

The relationship between the two companies has always been hazy. Although X owned a portion of xAI, the two firms remained separate entities, despite sharing resources and data. 

The merger values X at $33 billion and xAI at $80 billion. As an all-stock deal, however, no cash is changing hands.

That fact sparks the question: What is the point of Musk’s merger?

Merger delivers security for debtholders amid Tesla decline

When Musk originally acquired X (formerly Twitter), the company was valued at $44 billion, funded by at least $13 billion in debt financing. 

As both advertisers and users fled the platform, however, institutional investors marked X’s value down to $12-14 billion. Debtholders feared they may not be repaid in full.

Complicating the matter, Tesla shares have declined by nearly a third this year. Tesla remains one of the main sources of Musk’s liquidity. 

With this context, Musk’s merger can best be understood as a corporate restructuring providing greater security for nervous X debtholders.

Sidekick Takeaway: Ultimately, the X/xAI merger is less exciting than it might seem at first glance, especially since the two companies already work so closely together. However, the deal does show that Musk’s antics are starting to put real pressure on his finances, as evidenced by debtholders pushing for this type of restructuring. 

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Vanishing Act: Reeves’ Disappearing Margin

Last week, we discussed how Rachel Reeves managed to reset the UK government’s fiscal headroom to the level it was back in October.

Following her Spring Statement, which featured drastic spending cuts, the UK was left with a £9.9 billion fiscal gap. Already, however, that headroom may have evaporated. 

Following Trump’s sweeping tariffs this week, forecasts could show that further adjustments are needed to follow the government’s self-imposed fiscal rules.

OBR: Trump tariffs threaten UK economy

Last week, economists at the Office for Budget Responsibility warned that a scenario in which the US imposed 20% tariffs on all trading partners could entirely eliminate the government’s fiscal headroom.

Because tariffs increase the cost of imports and dampen demand for exports, such measures would lead to a smaller UK economy. 

Following Trump’s ‘Liberation Day’ announcement, the UK managed to avoid the worst-case scenario. But the picture is still concerning:

• US tariffs on the UK were somewhat less than expected at 10%, far less than other countries.
• Globally, however, tariffs were greater than anticipated. China and the EU now face a 54% and 20% tariff rate, respectively.
• As of 4PM Friday, the FTSE 100 was down more than 4.5% in anticipation of the damage to come.

What’s more, these tariffs follow a 25% levy on US vehicle imports, a move expected to disproportionately harm UK automakers.

We’ll need to wait for the latest economic forecasts to understand whether the government’s fiscal headroom has been eliminated entirely.

On the whole, however, it seems exceedingly likely that further fiscal adjustments will be needed in autumn under the current rules.

Sidekick Takeaway: Following the Spring Statement, Chancellor Reeves currently has a net approval rating of -30 points. Though Starmer has publicly expressed confidence in Reeves, it remains to be seen whether that confidence will last if the UK faces a significant contraction. 

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Notices

Sidekick Money Ltd is a company registered in England and Wales (No. 13882980). Sidekick Money Ltd is authorised and regulated by the Financial Conduct Authority (FRN 984829). Our address is 21-33 Great Eastern St, London, EC2A 3EJ.

𝘗𝘭𝘦𝘢𝘴𝘦 𝘳𝘦𝘮𝘦𝘮𝘣𝘦𝘳, 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘴𝘩𝘰𝘶𝘭𝘥 𝘣𝘦 𝘷𝘪𝘦𝘸𝘦𝘥 𝘢𝘴 𝘭𝘰𝘯𝘨𝘦𝘳 𝘵𝘦𝘳𝘮. 𝘠𝘰𝘶𝘳 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘪𝘴 𝘢𝘵 𝘳𝘪𝘴𝘬 - 𝘵𝘩𝘦 𝘷𝘢𝘭𝘶𝘦 𝘰𝘧 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵𝘴 𝘤𝘢𝘯 𝘨𝘰 𝘶𝘱 𝘢𝘯𝘥 𝘥𝘰𝘸𝘯, 𝘢𝘯𝘥 𝘺𝘰𝘶 𝘮𝘢𝘺 𝘨𝘦𝘵 𝘣𝘢𝘤𝘬 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘯 𝘺𝘰𝘶 𝘱𝘶𝘵 𝘪𝘯.