Watson’s Weekly 27-09-2025

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…

• The UK, Canada and Australia decided to formally recognise the state of Palestine amid claims that genocide is being committed in Gaza. The decision to recognise Palestine has been strongly criticised by Israel and the US.
• Drones continue to fly, uninvited, over NATO territories. Drones flew over Copenhagen airport, causing its closure for a number of hours, but then there were additional sightings over more Danish airports including two that are used by the military.
• Trump suddenly changed his tune on Ukraine and said that it could win back all of its territory with the help of Europe and NATO. Clearly he’s getting frustrated with Putin’s intransigence. The share prices of Europe’s defence companies got a boost as a result.
• Microsoft decided to cut off some services to the Israeli military because it said that it found evidence that Israel’s defence ministry had store huge amounts of surveillance data on its servers. That being said, most other services Microsoft provides to the Israeli military remain unaffected.

IN TRUMP THINGS…

• VISAS – Trump’s newly announced H-1B visa fee could hit employers with a $14bn annual bill. It’s not obvious as to whether slapping this $100,000 fee will actually help US workers. A useful chart on who actually uses the H-1B visas the most shows that Amazon and other Big Tech companies are the most exposed with Indian nationals dominating over the last decade. Among European countries, Britain has been the biggest recipient of these visas. Given that they have, until now, been $1,500 a pop, the fact that they’re going up to $100,000 should mean that their popularity will evaporate but maybe the UK can use this opportunity to attract skilled staff and academics that were put off by Trump’s sudden move…
• PARACETEMOL – Trump suddenly urged women to avoid Tylenol due to alleged links with autism, a claim that hit share prices of AstraZeneca, GSK and Haleon. UK Health Secretary Wes Streeting rNesponded by saying “I trust doctors over President Trump, frankly, on this”. I’m with Wes on this given that Trump was the guy who suggested that injecting disinfectant into the body could potentially treat coronavirus…
• COURT CASES – Trump continued his pursuit of dissenters in court. He’s got former FBI chief James Comey facing charges for “serious crimes related to the disclosure of sensitive information” as he was the one who made allegations that Trump had ties to Russia while all the living ex-Fed chiefs ganged up with a load of senior economic bods to support governor Lisa Cook and her bid to resist removal by the president.
• JUST STIRRING GENERALLY – Trump made his first address to the UN General Assembly since 2020 to browbeat the rest of the world on their views, values and policies for a whole hour. He emphasised how great he was, proclaimed America to be “the hottest country anywhere in the world” and “the best country in the world to do business” and dismissed climate change as “the greatest con job ever perpetrated on the world”.

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – Fed chief Jay Powell said that further interest rate cuts weren’t necessarily a given although the market is currently expecting two 0.25 percentage point cuts by the end of the year. Meanwhile, the Q2 GDP growth rate was revised up from 3.3% to 3.8% thanks to stronger consumer spending. That being said, there are signs that all is not well with the American consumer as CarMax, America’s biggest seller of used cars announced a disappointing performance thanks to the negative effect of Trump’s tariffs. It’s possible that this was just a blip because orders were front-loaded as customers rushed to beat the tariff deadline so we’ll have to just wait in order to see whether this becomes a trend or not.
• IN CHINA – Xi Jinping announced conservative emissions targets in a video address to the UN climate summit. Many wanted China, the biggest producer of greenhouse gases in the world, to make deeper cuts.
• IN RUSSIA – the government announced plans to increase VAT from 20% to 22%, breaking a promise that Putin made last year not to raise taxes again until 2030. War is costing him.
• IN THE UK – the OECD’s latest forecasts say that the UK will have the highest inflation in the G7 this year. It also said that tax and spending plans from the government would limit economic growth for the UK over the next 12 months. Meanwhile, the government approved a second runway at Gatwick and Starmer unveiled a digital ID scheme. The Resolution Foundation think tank said that it thought the chancellor would need to break one of the central manifesto pledges and raise income tax in the November Budget. Ouch.

IN COMMODITIES NEWS…

• IN OIL – it looks like Energy Minister Ed Miliband is going to have to make a major U-turn and issue new licences to explore new fields in the North Sea. BP published its annual outlook report this week and it increased its forecasts of oil usage by 2050, putting previous net zero goals in doubt.
• IN SUGAR – Europe’s sugar industry is really suffering at the moment as it’s having to deal with falling prices, rising costs and tightening regulation. Sugar factories are already shutting down across Europe and if this all continues, there will be more casualties.

IN ENERGY NEWS…

• Wind developer Ørsted won a preliminary injunction to lift Trump’s “stop work order” which will enable it to continue work on the $1.5bn Revolution Wind offshore wind farm project off the coast of Rhode Island. The project is 80% complete so swift action was needed to avoid financial penalties. the administration will appeal…

IN CRYPTO NEWS…

• Digital currencies including bitcoin and ether weakened this week but we also heard that the UK and US set up a taskforce to co-operate on digital assets regulation. No details were forthcoming though.
• Crypto hoarders are starting to indulge in share buy backs as a way to arrest the slide of their share prices. This is getting particularly dangerous as they are borrowing money to do it, which could compound things. As some hoarders are finding their share prices falling below the value of their crypto assets there will no doubt be a lot of scope for M&A as the strong scoop up the weak on the cheap.
• Tether is looking to raise $20bn in a private funding round. It runs USDT which is a stablecoin pegged to the US dollar, backed by solid securities including Treasuries. Interest income from those Treasuries has been very lucrative for Tether and it sounds like there will be more government debt to buy soon as Trump looks at ways of financing his various initiatives.

The performance of Chinese tech stocks has easily overtaken that of their rivals on the NASDAQ in the year-to-date. Hong Kong tech companies have seen their valuations rise by 41% in the year-to-date versus the 17% increase in the NASDAQ listed ones over the same time period.

IN AI DEVELOPMENTS…

• IN REGULATION – Apple has demanded that the EU should scrap the DMA which came into force in 2022. It says that the rules have made it harder to do business in Europe and users are suffering as a result. The EU is also doing an initial investigation into Apple, Google and Microsoft over allegations that they’re not doing enough to prevent online fraud. Amazon also got slapped with the biggest-ever civil penalty of $2.5bn by the FTC over allegations that it conned customers into signing up for its Prime service without their consent and had been “sabotaging” efforts to get out of their subscriptions. Amazon paid the money but did not admit any guilt. It must now include a “clear option” to decline the Prime service and make renewal terms more obvious to its customers.
• MORE GENERALLY – Trump’s administration signed a deal with xAI that will enable Grok to be used across federal agencies for 18 months. Similar deals have been signed recently by the government with Google’s Gemini and Meta’s Llama in addition to other leading models but this is notable because it is seen to be a sign of rapprochement between Trump and Musk.
• Barclays published a really interesting piece of research that shows how AI could fail (although they don’t think it will). Data centre capex could slow down, grid capacity could get saturated and tech advances in AI could mean more efficient power usage might result in eventual overcapacity.

IN CHIPS NEWS…

• Nvidia is going to invest up to $100bn in OpenAI in return for a big slice of OpenAI as part of a combined effort to build data centres for AI. OpenAI will buy millions of Nvidia’s processors as part of this. I wonder what that’ll mean for OpenAI’s efforts to make its own AI chips.
• OpenAI is expanding its Stargate AI project to to develop five new US data centres that will increase the cost of its AI infrastructure project Stargate to about $400bn. This means that the number of sites will increase from the initial one – to six!

IN QUANTUM DEVELOPMENTS…

• HSBC and IBM did a trading test using historic data in quantum computing tools. They found that the new tech was 34% better than traditional methods of predicting how an order would be filled, so this looks like a positive development for real world uses of quantum computing!

IN MEDIA NEWS…

• Efforts to clamp down on dissenters continued as the Pentagon is now forcing journalists to promise not to publish unauthorised information in return for granting them continued access. Reporters who don’t sign the pledge will lose physical access.
• Jimmy Kimmel’s show returned but Trump threatened ABC over this and said that it was “a major Illegal Campaign Contribution” for the Democrats.

IN STREAMING…

• Disney decided to hike subscription prices despite the whole Jimmy Kimmel debacle. It said that the price rises had been decided way before the cancellation. It’s the fourth year in a row where Disney+ has increased its streaming prices.

IN SOCIAL MEDIA NEWS…

• Things are progressing with the purchase of TikTok US. The Murdochs, Michael Dell and Larry Ellison are part of the consortium that’s looking to buy it and as the week went on we saw that Oracle is going to provide oversight and security for an American version of TikTok’s algo. Trump later signed an executive order to approve an overall agreement with more details to follow over the next 120 days.

IN HACKING NEWS…

• There was an interesting article on why we’re seeing so much hacking going on at the moment. Apparently British companies are being targeted because we’re much more likely to pay the ransoms than peers in other countries!  There are increasing calls for the government to force companies to report cyberattacks so that they won’t try to hide them, which makes the problem worse.

• It turns out that Warren Buffett’s Berkshire Hathaway sold out of its remaining stake in BYD in Q2. Its stake was worth $415m at the end of last year. Given that the share price has gone up by over 4,500% since he bought it in 2008, you can’t blame him for taking profits! He’s been selling the stake down since 2022. Does this remove a share price ceiling perhaps now that a big holder is out?? BYD is experiencing some headwinds at the moment though but it is worth remembering that a big seller is now off the table.
• Porsche announced its fourth profit warning in the space of a year and became the latest car maker to row back its EV ambitions, saying that it will continue to make the Cayenne and Panamera with internal combustion engines until well into the 2030s.
• We found out that Jaguar Land Rover didn’t have insurance to cover the current cyberattack and its shutdown is going to be longer than initially anticipated.
• Autonomous truck start-up Kodiak had its SPAC-backed IPO this week but I am sceptical because it’s hard enough getting autonomous cars on the road let alone trucks!

• Trump surprised everyone by suddenly announcing a 100% tariff on all imported drugs from October 1st, but said that pharmaceuticals companies could avoid this by building manufacturing plants in the US. British companies are badly exposed.
• Eli Lilly’s boss branded the UK as the “worst country in Europe” for cheap drug prices and warned that we could lose out on investment as a result.
• It seems like the government was listening because the science minister made conciliatory noises about playing nice with the increasingly embittered pharmaceutical industry saying that the government may be willing to pay more for medicines “to get those companies back again”.

IN RETAIL NEWS…

• Amazon made the decision to close all of its “grab and go” Amazon Fresh stores. They opened to great fanfare in 2021 but just never quite hit the spot and have now been closed down as part of a streamlining of Amazon’s grocery operations in the UK.
• B&Q’s owner, Kingfisher, was confident enough to lift its profit forecasts thanks to strong demand for kitchen ranges and garden products over the summer. Despite a tricky economic backdrop, this is the third consecutive quarter where the company has seen a rise in big ticket purchases.
• H&M boosted profits by 40% in Q3 thanks to its turnaround efforts bearing fruit. The company said that it was due to “improved customer offering, an improved gross margin and good cost control”.

IN LEISURE NEWS…

• IN AIR TRAVEL – there’s an ongoing trend of airlines revamping/expanding their premium economy offerings. Delta, American Airlines and British Airways are among the airlines to have expanded – or plan to expand – these sections.
• The hacking attack perpetrated on Heathrow and Berlin airports over the weekend spilled over into the week. You do wonder what can be done about all this hacking as it’s getting ridiculous…
• IN HOLIDAYS – On The Beach shares fell to their lowest level in 5 months after announcing a profit warning. It said that it had to rein in forecasts because customers are getting thriftier and booking later, a trend that rival Jet2 mentioned earlier this month.
• IN CINEMAS – Upmarket cinema chain Everyman increased its revenues by 21% in the first half of the year, bucking the trend of more mainstream cinema chains. It seems that “experiential entertainment” is alive and well!

• IN REAL ESTATE NEWS – Riyadh rents are being frozen for 5 years after Saudi Crown Prince Mohammed bin Salman decided to take decisive action in addressing the problem of skyrocketing property costs. Meanwhile, Dubai-based developer Arada bought a stake in Regal, which some are seeing as a sign that the residential property market in London has bottomed out. That being said, Zoopla fell to a loss, citing “challenging market conditions”. This could be just a Zoopla problem, though, as bigger rival Rightmove has actually been doing really well!
• IN INVESTMENT NEWS – a report from the New Financial and Capital Markets Industry Task Force, a think tank, suggested that defined contribution (DC) pension funds should be forced to increase their exposure to UK stocks dramatically in order to shore up the weakened equity market. At the moment, only 9% of equity investments for these funds are in UK stocks versus the 20-25% recommended. If this is adopted, it could be huge…
• IN FINTECH NEWS – Revolut promised to invest £3bn in the UK over the next five years as part of its ongoing push to get a full banking licence. It’s got a provisional one at the moment, which is limiting. It’s still not going to list on the LSE, though, by the looks of things.

My fave video this week was the one with the unflappable kid in a Lambo! Incredible!