Watson’s Weekly 28-06-2025

This is an amalgamation of the “best bits” of the daily weekday newsletter/blog woven together to form a concise and coherent view on the things that matter in the commercial and economic news of the week. 

THE COLOURED HIGHLIGHT REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

IN WAR NEWS…

• Trump ordered an attack on Iran over the weekend, it caused concern among his MAGA base and opened a Pandora’s box in the region. Iran vowed revenge, there was talk of closing the Strait of Hormuz and then Trump said that Israel and Iran had agreed a ceasefire. Reports emerged that the attacks did not “obliterate” Iran’s nuclear programme and only slowed it down by about six months. Early intelligence reports imply that Iran’s uranium supply is largely intact.
• IN TERMS OF REACTION – Gulf countries were shaken, expats panicked and jet fuel prices soared.

IN DEFENCE NEWS…

• NATO promised that its members would increase defence spending to 5% of GDP by 2035 and Germany said it would boost defence spending at a faster rate than France or the UK although Spain managed to carve itself an opt-out for the moment. The UK committed to buy 12 US-made F-35 stealth fighter jets that are capable of carrying nukes and will join NATO’s airborne nuclear mission.
• Taiwan’s president launched a drive for unity in the face of ongoing Chinese aggression, but this could prove to be problematic if China decides to step things up militarily.

IN COMMODITIES NEWS…

• IN OIL – prices jumped after US attacks on Iran, but then they fell on the ceasefire although there’s still nervousness about what’s going to happen to the Strait of Hormuz. Trump called for an immediate boost in US oil production and sanctions relief so that China can buy Iran’s oil.
• There was speculation that Shell would buy BP but this was flatly denied by Shell. It would create one of the world’s biggest oil and gas companies if it did happen, though…
• IN GAS – it’s worth watching the gas price because if there’s any funny business with the Strait of Hormuz, gas prices in Europe could swing wildly because 60% of LNG in Europe is traded on the spot market, so is very sensitive to outside influences.
• IN GOLD – Germany and Italy are under increasing pressure to bring back $245bn worth of gold that’s currently stored in the US. They each store over a third of their bullion in the US. Given Trump’s unpredictability, the idea of repatriating gold is gaining increasing traction to make sure that European banks have control over it.
• IN COBALT – prices jumped by almost 10% as the DRC’s Strategic Mineral Substances Market Regulation and Control Authority announced that the four-month cobalt export ban imposed in February would be extended to September.

IN ENERGY NEWS…

• IN NUCLEAR – A brand new nuclear power facility is going to be built on a site in upstate New York. It will be the first major new US plant for over 15 years and could prompt further construction of nuclear reactors! In the UK, Centrica said it would take a 15% stake in Sizewell C, which will take its interest level to EDF’s.
• IN RENEWABLES – the government has decided to ditch plans to bring solar wind and power from Morocco via subsea electric cables due to concerns over security and costs. The Department of Energy Security and Net Zero said that it wants to shift focus and “build homegrown power here in the UK”. That’s got to hurt for Xlinks, which has championed the project.

ACROSS REGIONS/COUNTRIES…

• GLOBAL – US strikes on Iran are likely to be damaging to global growth, according to the IMF. Next week they will be telling us that bears 💩 in the woods. Genius stuff, as always, from the gods of economics at the IMF 🤣.
• IN THE US – the Fed chair defended last week’s decision to keep interest rates on hold, but that didn’t stop Trump from threatening to remove him by October, which spooked markets. Trump was also angered by the winner of the Democratic primary for the position of mayor of New York, calling him a “100% communist lunatic”. The thing is that voters are probably getting sick of rising prices with young people feeling particularly disaffected. Meanwhile, RFK has stopped funding for global vaccine group Gavi because it had failed to justify the billions of dollars it received in funding. The administration is also thinking about imposing restrictions on B2C ads for pharma companies – and that could be a nightmare for TV networks and the pharma companies themselves. The Treasury has asked Congress to take out Section 899 of Trump’s “big, beautiful bill” that would enable Washington to increase taxes on foreign companies and investors that it deemed to have disadvantageous tax policies for American companies. The Treasury Secretary said it wouldn’t be needed any more because he’d already negotiated improved terms for US companies under the new OECD global minimum tax regime.
• IN THE MIDDLE EAST – Oman is going to be the first country in the region to introduce personal income tax! It will be a 5% tax on Omani residents’ earnings over $109,000, won’t come into force until 2028 and only 1% of Oman’s 5m inhabitants are likely to fall in this bracket.
• IN THE UK – a poll said that 72% of Britons believe that America posed a “very” serious or “quite serious” risk to global peace in April – double the 36% of people saying the same thing last autumn before Trump got the keys to the Oval Office. Starmer unveiled the first long-term industrial strategy roadmap since Theresa May’s government and then announced a trade strategy for services exports. Starmer also watered down his proposed welfare reforms following a major rebellion of his own MPs. The Bank of England said that there’s a slowdown going on in the jobs market and the Devereux Review was published with the recommendation that the ONS should have a £10m overhaul. TBH, it’s been pretty useless of late and this isn’t good given all the macro stuff that’s going on at the moment.

IN INVESTMENT TRENDS…

• BITCOIN – A number of companies have been stockpiling bitcoin, with some companies completely transforming themselves in the process. Over the last year, the amount of bitcoin that companies hold has skyrocketed by almost 170% so now around 130 listed companies hold a total of $87bn of bitcoin combined, which is equivalent to about 3.2% of all the bitcoins that will ever exist! TMTG, Twenty One, Tesla and one-time hotel developer Metaplanet are among the companies deciding to plough money into bitcoin whatever their main business is.
• STABLECOINS – the Bank of International Settlements (BIS), warned that the growing use of stablecoins could destabilise global finances and threaten the monetary sovereignty of countries. Yes, there have been some big failures in the recent past but fans would say that banks are so against this because they stand to lose substantial amounts in transfer fees.
• IN IPO NEWS – PE-backed Visma has provisionally chosen London as a listing destination over Amsterdam, which will be a welcome boon for the embattled LSE and we’ve also seen a SPAC revival, particularly in New York.
• IN FUNDRAISING NEWS – UK AI start-up PhysicsX raised $135m at its latest fundraising, giving it an implied valuation of almost $1bn. It uses AI to improve product design in the manufacturing and defence industries.

IN FINANCIALS NEWS…

• The Fed announced plans to relax capital requirements. Banks have been pushing for this, but they were originally imposed to avoid a repeat of the 2008 financial crisis. Basically, this means that banks won’t have to hold as much high-quality capital against loans and will free up cash to put to work in other areas.
• There is a growing belief that the rate of US banking mergers is set to increase thanks to relaxed regulators, tighter competition and the need to put more money into technology.
• Spain blocked BBVA from merging with Sabadell for at least three years so this does beg the question what’s going to happen to TSB? Is it still going to be sold?
• Saga is on the verge of signing a deal with NatWest to offer new products to its audience. It is hoping to start with a new Saga-branded savings account before rolling out others.
• Revolut’s CEO could be in line for a Musk-style mega pay out if he can get Revolut’s market cap over $150bn! Good for him.

IN EMPLOYMENT TRENDS…

• Pay rates for experienced US lawyers – and the teams of associates they bring with them – are skyrocketing and it’s interesting to see that lawyers who rebelled against their big firms for bending the knee to Trump are now forming their own firms. You’d think that, at some stage, they will consolidate…
• UK grad job openings are now at their lowest level since 2018 as nervous employers hold off on hiring and cut costs by using AI.

IN CONSUMER TRENDS…

• Grocery prices rose at their fastest pace for more than a year in the four weeks to June 15th, which is probably one reason why shoppers are buying fewer groceries, although the surge in weight-loss drug use is also contributing to this because it’s believed that those who take them eat up to 30% fewer calories. Bad news for companies, such as Nestlé, who make naughty snacks.

IN RETAIL NEWS…

• IN SUPERMARKETS – Sainsbury’s has done well from strong sales of summer goods, Waitrose posted its best sales in three years but probably benefited from M&S’s hacking woes while Asda continues to slide into oblivion.
• Further down the high street, Halfords announced a loss after its restructure and higher wage bills.
• Boots announced strong quarterly sales in its 17th consecutive quarter of growing market share. This will be useful in the event of a potential spin-off by its parent company, which has just been bought by PE firm Sycamore Partners.
• IN APPAREL – H&M announced sluggish half year results thanks to a tricky US market. The CEO said that US customers had become very price-sensitive and that competitors are already cutting prices.

IN CONSUMER GOODS NEWS…

• Nike shares boomed by 10% on the belief (not the reality!) of a turnaround under the returning CEO Elliott Hill. The company had its worst quarterly earnings in over three years, so presumably investors reckon the only way is up from here!
• Unilever paid a whopping $1.5bn to buy men’s grooming brand Dr Squatch from PE firm Summit Partners. Let’s hope hope it does a better job with this brand than it did with Dollar Shave Club, which was so disastrous it had to sell it in 2023.

IN TECH NEWS…

• Amazon announced a big $40bn investment in the UK over the next three years that will include four robotic fulfilment centres and an upgrade of its film studios in Berkshire, all of which will create thousands of jobs.
• Meta won an AI copyright case against a band of authors who objected to Meta using their copyrighted material to train their LLMs. Interestingly, the way the judge handed down the decision would suggest there’s more mileage here for content creators…then we saw Meta’s CTO becoming a a lieutenant colonel in Detachment 201, a unit in the reserves which that US army says will “fuse cutting-edge tech expertise with military innovation”. The unit has taken on some major top bods at Palantir, OpenAI and Thinking Machines Lab. This sounds like a canny move for all concerned!
• Nvidia shares hit a record high on renewed AI optimism, which edged it past Microsoft to become the world’s most valuable company. CEO Jensen Huang is very excited about the “multitrillion-dollar opportunity” of AI and robotics.
• Apple is meeting resistance from carmakers who are accusing it of trying to take over the dashboard with the release of its Apple CarPlay Ultra. Sorry to sound rude but carmakers make notoriously 💩 software that can be expensive and clunky so I saw let them make the cars and let tech companies make the software. Meanwhile, there’s a lot of hope riding on the newly-released F1 movie with Brad Pitt. Could this be the blockbuster that has so far eluded them??

IN SOCIAL MEDIA…

• The US House of Representatives banned WhatsApp on government devices deeming it “a high risk to users”. Is Trump going to use this to put pressure on Zuckerberg to do something for him?? It just seems weird that the administration seems to be attacking a “national champion” for no apparent reason…
• Dating app Bumble just announced plans to cut a third of its staff as part of a broader restructuring of the company. It’s lost a lot of ground since its peak under lockdown as younger people are preferring to meet partners via more “traditional” means.
• Reddit has promised to keep its content human and protect its online communities. It has “20 years of conversation about everything” and has, somewhat ironically then, made money out of it from massive partnerships with Google and OpenAI to train their LLMs on its real-world content.

IN TELECOMS NEWS…

• An electronics company that makes smartphones in California, called Purism, doubted that Trump’s new “T1” phone will be able to be launched in September with equivalent functionality to existing smartphones. We’ll just have to see how this works out…

IN AUTOMOTIVE NEWS…

• Tesla launched a robotaxi service in Austin, Texas, with 10 Model Ys. They had a safety driver on board and charged customers a $4.20 flat fee. This is just the beginning but Tesla wants to expand its service into San Francisco, Los Angeles and San Antonio. It still needs to prove safety though! Meanwhile, we heard that Musk’s #1 “fixer” had quit Tesla. Was he a casualty of Tesla’s slump in form?? There was more bad news, though, as Skoda’s EV sales have now overtaken Tesla in Europe as Musk’s popularity continues to slide while Skoda’s popularity rises. Figures from the European Automobile Manufacturers Association show that this is the fifth month in a row of falling sales for Tesla.
• Xiaomi shares hit a record high as it sold 200,000 of its YU7 SUV within the first three minutes of its release this week! It’s the tech company’s first attempt at an SUV and looks like a cross between Ferrari’s Purosangue and Porsche’s Taycan Cross Turismo – but costs just $35,370!
• British vehicle production fell to its lowest level in May since 1949 thanks, in the most part, to the shock reaction to Trump’s import tariffs. Shipments to the US fell by a whopping 55%. That being said, Aston Martin resumed car exports to the US following the UK-US trade deal, so maybe things will improve…

ELSEWHERE…

• The future of air taxis is looking shakier as companies got lukewarm on their prospects while manufacturing costs continue to rise…Joby Aviation, Archer Aviation, Wisk Aero, Beta Technologies and EHang are still in the game – along with British player Vertical Aerospace – and they might get a boost from Trump, who seems to be more positively disposed to them.

• There are some real risks in air travel at the moment in the Middle East given current hostilities. Planes can potentially lose GPS connections, go off course and collide because of jamming technology that’s being used between the warring parties. Talking of which, it seems we’re still no nearer to learning the cause of the Air India crash. They must be getting desperate because the Indian investigation team is now looking at sending the black box to the US National Transportation Safety Board…
• The US audit regulator has fined the Dutch arms of Deloitte, PwC and EY a total of $8.5m because “hundreds” of their naughty accountants cheated on internal training exams – including, ironically, ethics tests! KPMG already got fined $25m last year for the same kind of thing. I thought that accountants were supposed to be honest!!!

My fave video from this week was, of course, the one with the nonchalantly-cool skate-boarding dog! How brilliant is this?!?