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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Investing in technology companies involves weighing up expected quantities of jam today, jam tomorrow and jam at some unknown future date. Facebook parent Meta Platforms and Microsoft are serving up just enough of each.

Both reported earnings on Wednesday that — like Google parent Alphabet the previous day — outpaced what analysts expected. Microsoft’s cloud computing business increased revenue by 22 per cent, a little faster than the previous quarter. Meta’s sales of advertising increased by 19 per cent, and it exacted 11 per cent more per ad than a year earlier. Today’s jam, then, is safely taken care of.

Tomorrow is less certain. Since artificial intelligence mania took hold, quarterly earnings have become a kind of sanity check, whereby investors reassess how they feel about tech companies’ lavish investment plans. Steady share prices depend on corporate chiefs like Meta’s Mark Zuckerberg and Microsoft’s Satya Nadella walking a fine line between being bullish about AI’s potential and remaining credible about its financial returns.

On that front, the $1.5tn-valued Meta is in the more precarious position. It has told investors to brace for “significant acceleration” in capital expenditure next year. Spending is already double what it was three years ago, weighing in at a quarter of revenue. Like Microsoft, Meta is buying chips and servers, but where Microsoft in effect rents space in its cloud to clients, Meta’s is largely for its own use.

Meta’s other challenge is that, compared with some of its peers, its boldest prospects are relatively long-tailed. That makes it different from chipmaker Nvidia, say, which sells AI-enabling silicon for real money. Microsoft already has recurring revenue from corporate customers. Facebook, meanwhile, is building new products such as social network Threads, virtual assistants and AI-generated video ads with yet-to-be determined value.

Zuckerberg has at least read the room, and is making the case that AI will bring near-term pay-offs too. More than 1mn advertisers used Meta’s generative AI tools in the past month, for example, and the company thinks those tools make users 7 per cent more likely to click. Analysts have raised their forecasts for Meta’s revenue in 2026 by $30bn over the past year, to $210bn, according to LSEG.

As for the distant-future jam — such as the recently unveiled augmented-reality holographic glasses the company describes as “the next great leap” — investors aren’t putting much weight on that at all. Meta’s share price has risen 70 per cent this year, but that still implies almost $400bn of negative value for its far-out bets, Morgan Stanley analysts believe. Big ideas can drive big valuations, but only up to a point.

john.foley@ft.com

NEW YORK — A pig at an Oregon farm was found to have bird flu, the U.S. Department of Agriculture announced Wednesday. It’s the first time the virus has been detected in U.S. swine and raises concerns about bird flu’s potential to become a human threat.

The infection happened at a backyard farm in Crook County, in the center of the state, where different animals share water and are housed together. Last week, poultry at the farm were found to have the virus, and testing this week found that one of the farm’s five pigs had become infected.

The farm was put under quarantine and all five pigs were euthanized so additional testing could be done. It’s not a commercial farm, and U.S. agriculture officials said there is no concern about the safety of the nation’s pork supply.

But finding bird flu in a pig raises worries that the virus may be hitting a stepping stone to becoming a bigger threat to people, said Jennifer Nuzzo, a Brown University pandemic researcher.

Pigs can be infected with multiple types of flu, and the animals can play a role in making bird viruses better adapted to humans, she explained. The 2009 H1N1 flu pandemic had swine origins, Nuzzo noted.

“If we’re trying to stay ahead of this virus and prevent it from becoming a threat to the broader public, knowing if it’s in pigs is crucial,” Nuzzo said.

The USDA has conducted genetic tests on the farm’s poultry and has not seen any mutations that suggest the virus is gaining an increased ability to spread to people. That indicates the current risk to the public remains low, officials said.

A different strain of the bird flu virus has been reported in pigs outside the U.S. in the past, and it did not trigger a human pandemic.

“It isn’t a one-to-one relationship, where pigs get infected with viruses and they make pandemics,” said Troy Sutton, a Penn State researcher who studies flu viruses in animals.

This version of bird flu — known as Type A H5N1 — has been spreading widely in the U.S. among wild birds, poultry, cows and a number of other animals. Its persistence increases the chances that people will be exposed and potentially catch it, officials say.

It isn’t necessarily surprising that a pig infection was detected, given that so many other animals have had the virus, experts said.

The Oregon pig infection “is noteworthy, but does it change the calculation of the threat level? No it doesn’t,” Sutton said. If the virus starts spreading more widely among pigs and if there are ensuing human infections, “then we’re going to be more concerned.”

So far this year, nearly 40 human cases have been reported — in California, Colorado, Washington, Michigan, Texas and Missouri — with mostly mild symptoms, including eye redness, reported. All but one of the people had been to contact with infected animals.

UK chancellor Rachel Reeves has announced a £40bn tax increase, the biggest in a generation, with business bearing the brunt of a Budget she said would fix Britain’s “broken” public finances and public services.

Extra borrowing averaging £28bn a year over the parliament unsettled investors on Wednesday, pushing government borrowing costs — which had already risen sharply ahead of the budget — to a five-month high.

The decision to increase tax, spending and borrowing is a big gamble for Reeves, the first woman to hold the position of chancellor in the 800-year history of the post.

The massive tax rise, which will fund a big increase in spending on the NHS and schools, will take Britain’s tax burden to a record high. It was accompanied by a planned £100bn rise in capital spending — funded by the extra borrowing — over the parliament.

“These choices aren’t easy but they’re responsible,” Reeves told the House of Commons, to ecstatic cheering from Labour MPs. Conservative leader Rishi Sunak said she had “broken promise after promise”.

Most of the tax increase will come from a £25bn rise in national insurance paid by employers, which will go up by 1.2 percentage points to 15 per cent from April. The level at which employers start paying NI for workers will drop from £9,100 to £5,000.

Business groups have warned that increasing NI for employers may force some companies to dismiss staff or close at a time when wages and other labour costs are also increasing.

About £9bn a year will be raised from higher taxes on groups including people who benefit from the “non-dom” scheme for wealthy foreigners’ overseas income, as well as private schools, energy companies and private equity chiefs.

As part of its move to abolish the non-dom regime, the government said it would end the use of offshore trusts to shelter assets from UK inheritance tax, ignoring warnings that such a move could spark an exodus of rich people from the UK.

The chancellor added that, instead of the scheme, the UK would introduce a new “internationally competitive” residence programme.

Reeves announced an immediate increase in capital gains tax, with the lower rate rising from 10 per cent to 18 per cent, and the higher rate from 20 per cent to 24 per cent. She also said increases in inheritance tax — notably applying it to pensions — would yield £2bn a year.

In a move closely watched by private equity executives, she said Labour would increase the capital gains rates on carried interest to 32 per cent from April, up from 28 per cent.

While the change fell short of taxing carried interest in line with the top rate of income tax of 45 per cent, advisers warned that by suggesting there was a “compelling case” for further reforms of carried interest, Reeves had left the door open to further tax hikes.

In a boost to people at the other end of the income spectrum, the chancellor confirmed that the UK’s national living wage would rise by 6.7 per cent to £12.21 from next April, with a bigger increase for the youngest workers.

UK government bonds initially welcomed Reeves’ remarks, but began to sell off after the Treasury published figures showing debt sales will rise to £300bn in the current fiscal year, up from the previous estimate of £278bn and above investors’ expectations.

The 10-year gilt yield climbed to 4.37 per cent from a low of 4.21 per cent during Reeves’ speech.

The benchmark FTSE 100 was trading down 0.6 per cent, while the more domestically focused mid-cap FTSE 250 was up 0.3 per cent, boosted by a rally in energy companies’ shares.

In a reference to the disastrous impact on bond markets from Liz Truss’s 2022 “mini” Budget, Vivek Paul, UK chief investment strategist at BlackRock, said pre-Budget briefings had “broadly had the desired effect on markets for now, with the reaction in gilt yields a far cry from the 2022 episode”.

The chancellor said the Budget would stabilise the public finances, patch up crumbling public services such as the NHS and pave the way for higher growth.

In total, she increased taxes by £41.1bn a year by the end of the forecast period in 2029/30 with spending — including capital investment — increasing by £74.1bn in the same year, leaving Reeves with a funding gap of £32.9bn.

The independent Office for Budget Responsibility said the overall effect of Reeves’ Budget decisions would be to “push up CPI inflation by around half a percentage point at their peak”.

It added that real disposable income per person, a measure of living standards, will be 1.25 per cent lower by the start of 2029 than was forecast in March.

Reeves’ tax rise, one of the biggest in a Budget as a share of national income, outstripped the increases of her predecessors Rishi Sunak in 2022, George Osborne in 2010 and Gordon Brown in 2002.

Tax as a share of GDP was forecast by the OBR to rise from 36.4 per cent this year to a historic high of 38.2 per cent in 2029/30.

Reeves announced a £6.7bn increase in capital investment in education, a 19 per cent increase in real terms on this year.

She also promised a £22.6bn rise in the “day to day” health budget over two years, and a £3.1bn increase in the NHS capital budget, in what she described as the largest real-terms increase since 2010, outside of the Covid-19 pandemic.

But she said that she would not prolong a freeze on thresholds for personal income tax and national insurance beyond the 2028 date planned by the last government.

The chancellor maintained the UK’s long-standing freeze on fuel duty, but increased taxes on corporate jet use.

Pledging that the UK would not return to austerity, she said departmental day-to-day spending would grow by 1.5 per cent in real terms from next year, compared with the previously planned 1 per cent, in what remains a tight expenditure settlement.

Capital spending expenditure will grow by 1.7 per cent in real terms.

In a combative Budget speech, Reeves said the previous Conservative government “hid the reality of their public spending plans” from the electorate and the OBR, the independent forecaster.

“Never again will we allow a government to play fast and loose with the public finances,” she told parliament. But Sunak said the OBR made no mention of the £22bn “black hole” that Reeves claimed to have discovered.

Reeves confirmed that the government’s new investment rule would define debt as “public sector net financial liabilities”, in a move that will increase scope for borrowing. She added that under the government’s new rules, net financial debt will fall in the third year of every forecast.

The OBR predicted the chancellor’s Budget would put her on track to meet her revised debt rule two years ahead of schedule, leaving her with £15.7bn room for manoeuvre.

Debt as measured under the previous rubric — underlying public sector net debt — is still set to increase throughout the parliament until the end of the decade.

In forecasts accompanying the Budget, the OBR said that real UK GDP growth would be 1.1 per cent this year, 2 per cent in 2025, 1.8 per cent in 2026 and at 1.5 per cent to 1.6 per cent for the rest of the decade.

Additional reporting by Ian Smith and Harriet Agnew