Good morning. Today we're talking about an oil mega-merger, retail cyberattacks and the US jobs market.

Big Stories

Shell eyes BP takeover

Reports have emerged that Shell is engaging with advisors to explore the feasibility of a potential takeover of its rival oil producer, BP. The deliberations, currently in their early stages, come at a time when BP's shares have significantly declined, falling over 30% in the past year amidst investor unease regarding its turnaround strategy and softening oil prices. Shell's current market value of £145.6bn dwarfs BP's £55.9bn, highlighting the potential scale of such a monumental deal, which would rank among the largest in the history of the oil and gas industry. Sources suggest that Shell might be waiting for further declines in BP's stock price and oil values before committing to a firm offer, or potentially waiting for another suitor to emerge. While a successful acquisition would solidify Shell's position as a global energy powerhouse, rivaling US giants like Exxon and Chevron, it would undoubtedly face intense regulatory scrutiny. Ultimately, Shell may decide to prioritise share buybacks and smaller acquisitions instead of pursuing this mega-merger.

Retail cyber crisis

Cyber attacks have severely impacted major UK retailers M&S and the Co-op, and now luxury department store Harrods has also confirmed an attempted cyber intrusion, highlighting the escalating threat to the sector. M&S faced significant disruption to its food supply chain and online operations following a ransomware attack, reportedly stemming from a third-party vulnerability. This led to product shortages and a temporary suspension of online orders, with recovery potentially taking months. Concurrently, the Co-op experienced an attempted hack that forced the shutdown of parts of its IT system, affecting back-office and call centre services. Personal data of a significant number of its members, including names and contact details, was accessed and extracted. Harrods confirmed it had restricted internet access across its sites as a precautionary measure after detecting unauthorised access attempts. The National Crime Agency is investigating these incidents, mindful of a potential link. The UK's National Cyber Security Centre has urged all organisations to treat these incidents as a "wake-up call."

US jobs defy tariff fears

The US labour market added 177,000 jobs in April, more than the 130,000 predicted and signalling resilience despite recent tariff introductions. This news spurred investor confidence, lifting the S&P 500. While the unemployment rate held steady at 4.2%, labour force participation saw a slight increase, indicating more individuals are actively seeking employment. The data has raised hopes that the US economy might be able to weather the uncertainty stemming from President Trump's tariff policies without a significant downturn. The US labour market has shown surprising resilience over the past few years, sustaining consumer spending despite rising prices and interest rate hikes. However, analysts remain cautious, emphasising that the full impact of the recently announced sweeping import taxes will take more time to materialise in economic indicator.

Elsewhere...

Leadership rumours: Tesla denied a Wall Street Journal report that its board was searching for a replacement for CEO Elon Musk.

Back to cash: Uber is now allowing passengers to pay in cash after previously only taking online card payments.

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Number of the Day

94

Age of veteran investor Warren Buffet who announced he will step down as CEO of Berkshire Hathaway at the end of this year. He turned the company from a failing textile maker into an investment juggernaut worth $1.16tn.

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