ASOS cyberattack: What happened and why it matters

Dani Huston (0:09)

Hello, I'm Dani Huston. Welcome to the AJ Bell Money & Markets podcast. Joining me this week on the show is Tom Sieber. Hi, Tom.

Tom Sieber (0:18)

Hi, Dani. And hi to everyone watching or listening at home. How are you doing, Dani?

Dani Huston (0:23)

Well, you'll be able to hear that I'm still full of cold, and anyone watching the pod will also notice that I'm struggling with the autumn sunshine, which is lovely, but it is kind of creating an effect on my face, shall we say.

Tom Sieber (0:37)

Yeah, it does wreak havoc, doesn't it, with podcast records, but it is a nice time of year. I enjoy those crisp autumn days when you get that sunshine. Anyway, enough about the weather. We're going to be talking today about whether we might see some big merger action in UK supermarkets.

We're going to be talking about BT's takeover of TalkTalk, and also Paramount finally concluding its protracted merger with Warner Bros. So, a bit of a takeover theme to this week's show. And as well as that, we're going to look at the latest moves in oil prices and bond yields, as the S&P 500 actually makes a new record high.

Dani Huston (1:13)

Yeah, I'm going to chat about the damaging cyberattack at ASOS, mortgage rates hitting 6% for a five-year fix, the big announcements which have emerged from the Conservative Party conference, and Jaguar's big electric vehicle rethink.

Tom Sieber (1:30)

We're also going to be talking to our shares and markets writer, Martin Gamble, about Meta and why its new AI model is creating plenty of buzz.

Dani Huston (1:38)

And Eve Maddock-Jones talked to David Harrison, Head of Sustainability at Rathbone's Asset Management, on whether you can be a sustainable investor and invest in AI. First, though, Tom, what has been going on in markets? Because, as you said, S&P 500 record high.

Tom Sieber (2:01)

Yeah, yeah. So that is one of the key bits of news from this week, is that the S&P 500 did hit a new record level. And I think that probably feels quite heroic at the moment, given all the kind of worries investors are having to contend with. Now, the move to that new record level was driven, it probably won't surprise people by gains for AI-related stocks. And we've seen a definite recovery that they've definitely regained a decent chunk of the losses they chalked up in September. Now, just to put a bit of balance on that, as we record this on Wednesday afternoon, US markets were set to slip back a bit from these highs. And we have seen oil prices tick above $100 a barrel on renewed concern about supply disruptions.

In the recent weeks, we've been seeing some evidence that the flows of oil through the Strait of Hormuz, that now very famous stretch of water, are recovering. But I think as long as the conflicts between Iran and the US remains unresolved, there's naturally still going to be some nervousness around energy markets. The inflationary pressures these pose and the pretty parlour state of public finances mean government bond yields remain elevated even if they're a bit below their recent multi-year and in some cases multi-decade highs. Another factor some people have pegged for the upwards pressures we've seen on bond yields, so as a quick reminder, yields go up when the price of a bond falls, is competition from big technology companies because a lot of them have been launching their own really substantial bond issues to fund massive spending on AI. We've seen the latest example of that this week as SpaceX announced plans to raise $40 billion in debt financing and that was to buy AI chips from NVIDIA.

There's not much sign of spending slowing down in that area.

Dani Huston (3:58)

Well, that feels like an opportune moment to get Martin Gamble on to discuss Meta, whose own AI model has been generating quite some excitement recently. I think it's fair to say. Martin, you've been writing about this in the latest issue of Shares magazine. So what exactly is news and what can you tell us about it?

Martin Gamble (4:20)

Well, it's quite a surprise, I think, to most professionals in the industry, because they know that Facebook's been working on its AI models for some time, and no one's really expecting them to do much with it.

And then they launched this, as you say, this chat bot called Muse. And within the first three weeks, there were five million downloads made across the world. And that's faster downloads in terms of the number of downloads than we saw with ChatGPT or Anthropics Claude. So it's just really shot off the shelves. It's a free app. There are tiered structures for the paid versions, but it's just gone bananas. And people love it for some reason, even though it is a Facebook app, which will delve into your lives and it will become kind of your partner in crime when you're sort of surfing the internet and the AR world. So yeah, it's caused quite a stir and a surprising one at that, I think.