Morning Note: Market News and a comment on Google.

Market News

Volodymyr Zelenskiy signalled Ukraine may accept security guarantees from the US and Europe as a substitute for NATO membership. Steve Witkoff and Jared Kushner met with Zelenskiy in Berlin to discuss the 20-point peace plan.

Gold neared its record high and currently trades at $4,348 an ounce, while the 10-year Treasury yields 4.17%. Brent Crude trades at $61.50 a barrel, recovering part of last week’s more than 4% decline, as geopolitical uncertainty overshadowed concerns about oversupply.

US equities saw some profit taking at the end of last week – S&P 500 (-1.1%); Nasdaq (-1.7%) – dragging global gauges back from the brink of record highs. A disappointing sales outlook from Broadcom sent the chipmaker tumbling 11% and weighed on rivals, further fuelling investor anxiety over AI wagers initially prompted by Oracle. The futures market is currently expecting the S&P to open up 0.3% this afternoon.

In Asia this morning, markets moved lower: Nikkei 225 (-1.3%); Hang Seng (-1.4%); Shanghai Composite (-0.6%). China’s economy showed further softness in November, posting the weakest retail sales growth since Covid. Investment and factory output also missed the mark, while housing prices continued to slump.

The FTSE 100 is currently 0.5% higher at 9,707, while Sterling trades at $1.336 and €1.1390.

Europe’s automakers are set to get a breather in the transition to emission-free driving as the EU prepares to soften rules that would have effectively banned new combustion-engine vehicles from 2035.

Source: Bloomberg

Company News

Alphabet is poised to make another significant paper gain following a jump in the valuation of its investment in SpaceX.

Alphabet is the public holding company for Google, one of the world’s most recognised and widely used brands. In addition to the core search engine, the group owns digital video platform YouTube, Google Cloud, web browser Chrome, mobile operating system Android, Gmail, Google Maps, AI personal assistant Gemini, Fitbit, autonomous driving company Waymo, drone delivery company Wing, among others.

The group has a strong track record of innovation, leaving it well placed to capitalise on a wide variety of technological themes, such as digital media, e-commerce, video advertising, the cloud, the internet of things, driverless cars, and AI.

In addition to its profitable core businesses, the group has an Other Bets division, which is effectively an incubator fund for new products and technologies, and a number of other investments.

Alphabet holds a minority stake (around 7%) in SpaceX (Space Exploration Technologies Corp.), an American private aerospace manufacturer and space transportation company founded in 2002 by Elon Musk, with the primary goal of reducing space transportation costs to enable the colonisation of Mars.

This stake makes Alphabet one of the largest outside investors in the company, behind Elon Musk, who holds the majority of the shares and voting power.

The initial $900m investment was made in January 2015, when Alphabet (then Google) participated in a $1bn funding round, alongside Fidelity, at the time when SpaceX was valued at around $12bn.

Because Alphabet does not control SpaceX, it is treated as a passive investment in a private company rather than an operating segment within its financial reporting. Changes in the valuation of the SpaceX stake are reported as a non-cash, unrealized gain or loss on Alphabet’s income statement. As the value of the stake has soared, so has the gain reported. In April 2025, Alphabet reported a gain of $8bn in its Q1 results, after a previous valuation valued SpaceX at around $350bn. 

Google has not publicly sold its stake, and recent tender offers in December 2025, which value SpaceX at around $800bn, have led to significant unrealised gains for Alphabet, with the stake now estimated to be worth approximately $50bn (55x its original investment). This step-up is value will be reported as another large, unrealised gain at the time of its Q4 results in January 2026.

There is now speculation SpaceX might go public in 2026 at a valuation approaching $1.5trn – the Wall Street Journal has reported the company is starting the process to select bankers. If this valuation is realised, Alphabet’s stake could be worth over $100bn (c. 3% of the company’s market cap).

Beyond the financial returns, the company has always said the investment has strategic importance. SpaceX utilises Google Cloud to power its Starlink satellite internet services, creating a significant technological partnership between the two companies. Google views its investment in space infrastructure as a long-term play, potentially related to future initiatives like space-based data centres that could address the immense energy needs of AI.