Wednesday

Good morning. Ireland is counting the cost of jobs, credit, property, and grocery margins, while investment keeps moving through batteries, AI deals and aviation bids with more strings attached. Abroad, Iran, UK politics and chip stocks are keeping markets busy. Let’s get into it.

1. Job Cuts Move From Warning To Numbers. Diageo’s Irish cost-cutting moved from yesterday’s warning into a reported figure, with about 150 roles potentially affected as part of Dave Lewis’s wider restructuring. The Central Bank is also eyeing cuts after staff more than doubled to 2,225 since the financial crisis, with a €75m spending-reduction target. Cost discipline now stretches from Guinness owner to financial regulator. That is a fairly blunt labour-market signal.

2. Investment Starts Asking Harder Questions. Google and Energy Dome have announced a 23MW/200MWh CO2 battery project near Rhode, Co Offaly, expected to be commissioned in 2028. Salesforce’s $3.6bn Fin deal is being tested by questions over whether the AI value justifies the price, while Castlelake’s has third easyJet bid rejected, a story that leans on Irish aviation figures Peter Bellew and Mark Breen to navigate EU ownership rules. Capital continues moving, but it is getting pickier.

3. Property Faces A Capacity Test. Economists are nervous about the consequences of ramping homebuilding up to targets of 50,000 to 60,000 units a year, with labour, costs and infrastructure all needing to move at the same pace. Kennedy Wilson has approval for soon to be former KPMG offices near St Stephen’s Green, while Zara owner Amancio Ortega’s Irish property assets have hit €324m. Property capital is still interested; the harder question is whether Ireland can absorb the building push.

4. Economy Meets Europe’s To-Do List. ECB chief economist Philip Lane says euro-zone inflation could stay above the 2% target into the first half of 2027, even if Middle East peace holds. That lands as European Parliament leaders visit Dublin ahead of Ireland’s Council of the EU presidency, while Irish researchers win European Research Council funding. Rates, research and Europe’s agenda are lining up together. Ireland’s next EU turn will not be ceremonial paperwork.

5. Musgrave Shows Grocery’s Margin Fight. Musgrave, owner of SuperValu, Centra and Donnybrook Fair, recorded €133m profit as turnover rose 5.4% to €5.5bn, while store turnover reached €6.8bn. It also spent close to €142m on capital investment, with Centra planning €27m of investment and 500 jobs this year. Grocery is still growing, but inflation and operating costs are deciding how much of that growth retailers actually get to keep.

The US Senate voted 50-48 to halt military action against Iran, while Marco Rubio begins Gulf talks aimed at reassuring allies worried about the peace deal’s nuclear, missile and funding gaps. Keir Starmer and Andy Burnham held frosty transition talks, keeping UK economic policy and sterling on watch just as Ireland’s nearest large market needs fewer plot twists. Oracle has cut about 21,000 jobs over the past year, a 13% workforce reduction as it shifts spending towards AI infrastructure. Europe’s heatwave is now an energy, transport and workplace-risk story, not just a weather map. Chip stocks also sold off, with the semiconductor index down 7.9%, leaving markets to price peace, politics and AI spending in the same sitting.

Finance & Markets

Global markets swung from confidence to anxiety this week, as a chip-stock rout collided with a more hawkish sounding Fed to expose just how stretched the AI rally had become.

South Korea's Kospi plunged almost 10 per cent on Tuesday, triggering an automatic trading halt, as Samsung and SK Hynix tumbled on fears the chip rally had overheated. The selloff reached Wall Street, wiping over $700 billion off the Nasdaq in a single session and pulling Nvidia's market value back below $5 trillion. The backdrop matters here: at his first meeting as Federal Reserve chair on June 17th, Kevin Warsh held US rates steady at 3.5 to 3.75 per cent, but the Fed's own projections showed nine of eighteen officials now expect a hike before year-end, a sharp reversal from the cut they'd pencilled in back in March. Markets are increasingly pricing two quarter-point increases by December. Dublin wasn't spared: Euronext Dublin closed down 1.1 per cent, Kingspan fell 3.5 per cent, and AIB and Bank of Ireland slipped 1.2 and 2.1 per cent, with Kenmare leading the ISEQ's fallers; only housebuilders Cairn Homes and Glenveagh held firm. It's a reminder that Irish equities and pension funds remain tied to a US tech-and-rates story most have little direct stake in.

Closer to home, Diageo has notified the Department of Enterprise that it's considering collective redundancies affecting roughly 150 Irish jobs, as new chief executive Dave Lewis, nicknamed "Drastic Dave" for past cost-cutting at Tesco and Unilever, pushes through a global restructuring aimed at trimming costs and debt. Diageo's shares fell sharply in February after Lewis cut the dividend and downgraded the company's outlook, and an internal announcement on the scale of the cuts is expected within days.

AIB, meanwhile, is rolling out a redesigned mobile banking app from late June with stronger fraud protection, as digital-only rivals such as Revolut push deeper into Irish payments and lending.

The thread running through all of this is how fast confidence can curdle: a market priced for calm a fortnight ago, on Iran, on rates, on AI infrastructure spending, is now repricing for uncertainty, and Irish equities, jobs and bank deals are all getting pulled along with it.

In Thursday’s Tá, the Sector Spotlight will be Health & Pharma.

Wednesday - By The Numbers

$8.5bn: CRH’s all-cash Arcosa deal adds US construction-materials scale, with completion expected in Q1 2027 subject to approvals.

€400m: Linked Finance has now passed this lending milestone, after backing more than 5,000 Irish SMEs through non-bank finance.

2.7GW: Ireland’s solar capacity has reached this level, up almost 300% since 2023, though grid capacity remains the awkward follow-up.

€31.75m: State backing through the Western Investment Fund has been linked to €10.8bn in economy-wide revenue and about 100,000 job-years.

Patrick Kielty's production company quietly paid out dividends of €218,950, which sounds lovely until you clock that Debbie Gwyther, Liam Gallagher’s manager and fiancée, is reportedly minting millions off the Oasis reunion tour, proving the real rock star of any comeback is whoever manages the comeback. Meanwhile, TG4 will broadcast the GAA World Games finals from Waterford in July next year, giving GAA fans a rare treat: knowing where to watch the match and knowing it will be free. Between Oasis management and GAA broadcasting, the winner tends to be whoever controls the access.

The Read – Business Post – A Reader Writes: I’ve Made A Small Fortune On SpaceX. I’m Holding On For The Ride (Requires Free Account)

A useful read for anyone watching the AI and SpaceX market circus from the sidelines and wondering whether it is genius, luck or spreadsheet assisted madness. The piece looks at one investor’s SpaceX gains and why they are still holding on, which pairs neatly with this week’s chip sell-off, AI repricing and post-IPO volatility. It is less about stock tips and more about investor psychology when hype, genuine scale and fear of missing out all arrive in the same portfolio. The Link: I’ve Made A Small Fortune On SpaceX. I’m Holding On For The Ride  

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