Watson’s Weekly 11-10-2025

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…

• It looks like Trump managed to broker a peace deal between Israel and Hamas. He’s obviously branding it as a huge deal (and it is) but there’s a lot further to go. Fair play, though – hostages are going to be repatriated.

IN TARIFF NEWS…

• Brazil’s president Lula tried to play nice with Trump to get him to pull back on those 50% tariffs he slapped on imports from Brazil. Nothing doing but it looks like there was a softening of attitude from Trump.
• Europe is considering slapping tariffs of 50% on steel imports worldwide and the UK steel industry is in panic because 80% of our steel exports to the bloc, so this is much more important than US tariffs.

IN MARKETS NEWS…

• Emerging markets are seeing their biggest rally in 15 years as investors ditched US assets in search of safety but also better returns – talking of which, Vietnam was upgraded from “frontier market” status to “emerging market” status by FTSE Russell, which is a big deal and could bring in billions of investor cash. If MSCI goes the same way, this could be huge for the country’s prospects.
• The Bank of England warned of a growing risk that the AI bubble is in danger of bursting. Everyone and their dog knows this, but I guess the Bank just has to get it out there so that it can say “I told you so” when it does go wrong.

IN TRUMP THINGS…

• The president threatened to use the Insurrection Act of 1807 to deploy troops in American cities, turning the heat up on Democratic-led states who are pushing back against his use of troops.
• Trump continued his vendetta against his critics – this time using the DoJ to indict attorney-general Letitia James for bank fraud and making false statements to a financial institution. It looks very much like he’s using his office to exact revenge on James for successfully suing him back in 2022.
• He then suddenly announced the imposition of 25% tariffs on the import of medium and heavy trucks from November 1st but didn’t then give any more details.

IN INDIVIDUAL COUNTRY NEWS…

• IN JAPAN – the ruling party, the LDP, elected a new leader. Sanae Takaichi could become Japan’s first female PM in another vote later this month.
• IN FRANCE – the political implosion continued as the PM resigned and a former ally of president Macron advised him to quit before reaching the end of his term.
• IN THE UK – the ONS’s latest example of incompetence was revealed this week as it had to make a huge revision to its estimate of government borrowing. Unusually for the chancellor, this actually went in the government’s favour (the government had actually borrowed less than had initially been indicated) but it just goes to show how useless the ONS is these days. Meanwhile, PM Starmer praised India’s digital ID system as a “massive success” but it has been dogged by criticisms of weak data protection and privacy protection concerns since it was introduced 16 years ago. He’s obviously bigging it up because he’s trying to do something similar in the UK.

IN COMMODITIES NEWS…

• IN OIL – OPEC+ decided to boost oil production to take market share away from US producers. This is quite an interesting move given that the International Energy Agency said in its most recent report that it thought that oil supply would exceed demand in the coming year.
• IN GOLD – the price breached $4,000 in trading, rocketing up by almost 50% so far in 2025, in its biggest rally since the 1970s as investors continue to see it as a shelter in uncertain times and a hedge against inflation. Companies including Zijin Gold and Merdeka Gold have recently taken advantage of the gold rush by having IPOs but there’s a risk for investors that valuations are a bit toppy.
• IN RARE EARTHS – China just announced the tightening of export controls on rare earths and related technologies, continuing to assert itself as the critical mineral powerhouse in the global supply chain. That’s definitely going to hurt.
• IN COCOA – there was good news for chocoholics everywhere as cocoa prices fell to a 20-month low, ending a long run of prices rising to heady levels. Interestingly, speculators that had been betting on a rally have also sold out of their positions and switched to betting on falling prices.

IN ENERGY NEWS…

• A report was published, warning that Spain still runs the risk of blackouts like the ones it had in April. Spain’s electricity grid operator, Red Eléctrica, warned that the country needs to make urgent changes to how it operates to cope with big fluctuations in solar energy
• A report from National Gas forecast that our domestic gas supplies are going to fall this winter and that we’re going to rely more on imports from around the world to meet demand. This will surely put even more pressure on Ed Miliband to abandon his net zero targets.
• One of the world’s biggest windfarm developers, Ørsted, announced that it will have to slash workforce numbers by 25% over the next two years as a result of the flak the wind industry has taken, particularly since Trump came to power.

IN CRYPTO NEWS…

• The FCA has lifted its ban on retail investors buying crypto ETFs for ISAs and pension schemes! It looks like retail access won’t be available until next week at the earliest, but this is a major development.
• Payments company Block has released a product that will enable more retailers to accept bitcoin. Retailers using its Square network will be able to convert up to 50% of their daily sales revenue into bitcoin!

IN BUSINESS TRENDS…

• The FCA is bracing itself for potential repercussions from the bankruptcies of car parts supplier First Brands and Tricolor, the subprime car lender in the US. Both companies went bankrupt over the last month and were very closely linked to private markets. Private lending (which bypasses banks and therefore regulation) has grown enormously over the last few years but critics say that it needs to be regulated to protect all involved. This could get very serious very quickly…

IN EMPLOYMENT TRENDS…

• Countries including Germany and Canada have already shown an interest in hiring Indian engineers who would previously have gone to the States to work but who now face visa issues with Trump’s clampdown on the H-1B skilled worker visa. That being said, perhaps American Big Techs will keep hiring these people but just park them outside the US.
• Labour markets in many leading economies are losing momentum thanks to uncertainties over trade, tax and AI. This means that employees are more likely to stay with their jobs.
• Gen Z faces a “job-pocalypse”, according to a report by the British Standards Institution (BSI), because companies are investing in AI instead of new hires. 39% of leaders said entry level roles had already been cut or reduced thanks to AI.
• The latest KPMG-REC report showed that wage growth is at its lowest rate since March 2021 thanks to a slowdown in vacancies and available candidates.

IN CONSUMER TRENDS…

• FOR US CONSUMERS – data from the Bureau of Labor Statistics showed that Trump’s tariffs are increasingly filtering down to consumers in the form of price rises. An example of this is the price of US shrimp because although it produces it own, it imports the majority of it from India – and Trump has just slapped big taxes on imports from India. Meanwhile, Delta Air Lines have reported strong sales across all geographies in Q3 thanks to rising premium cabin demand, corporate travel and its loyalty programme customers. If rivals report similar trends then it will show that at least some (the more affluent!) Americans aren’t suffering too badly!
• FOR UK CONSUMERS – the latest ONS data shows that household savings are running down more than they had originally predicted in the latest example of the organisation’s uselessness. It had to cut estimates for households savings ratios for 2022, 2023 and 2024. The cuts for 2022 were the deepest it has had to make for thirty years!!! If this means we’re spending less AND saving less it’s very bad news for the economy…and as if consumers aren’t under enough pressure already, the CMA decided to let five suppliers increase their water bills by 3% on average. Mind you, drivers could be in line for £700 payouts from the car finance scandal. We then saw the co-founder of Lastminute.com warn that there will be a tech brain drain from the UK because of higher taxes – and as if to prove that point, it turns out that Revolut’s founder, Nik Storonsky, has just moved residency from the UK to Dubai.

IN RETAIL NEWS…

• Costco has agreed a deal with Novo Nordisk to supply its anti-obesity drugs to its members for half the normal cost – but consumers will have to use their own money because many insurers don’t cover these medications.
• White Stuff seems to be bucking the general retail gloom and is actually doing quite well, seeing a 20.3% rise in sales for the fiscal year and outlining plans to open ten shops next year! It has over 100 at the moment.

IN INVESTMENT NEWS…

• IN IPOs – security services company Verisure saw its shares jump by 21% on its market debut in Stockholm, giving some hope for a potential European IPO revival. Mind you, London has gone way down the pecking order for money raising as we are now in 25th place in capital raising centres around the world. Just $545m has been raised in London this year while New York’s two exchanges have raised a rather healthier $33bn. 2025 could be the fourth consecutive year that we’ve been out of the world’s top 10 IPO venues and it’s been eight years since the LSE was in the world’s top five!!!
• IN M&A – HSBC is offering $13.6bn to take Hong Kong lender Hang Seng Bank private as part of a wider effort to restructure the bank it bought back in 1965 during a banking crisis. That is one big chunk of change!

IN FINANCIALS NEWS…

• Monzo is looking to re-apply for a US banking licence four years after last attempting it. It wants to do this in order to accelerate its expansion there.
• Robinhood is in talks with the FCA about expanding the range of products it can offer on its platform in the UK to “prediction markets products” which allow users to trade contracts based on future events. This could be bad news for the likes of Hargreaves Lansdown and AJ Bell as there will be more competition.

IN AI-RELATED NEWS…

• Foxconn saw its revenues rise thanks to strong demand for AI products. Foxconn makes the servers used for Nvidia chips.
• Elon Musk has purchased a 114-acre tract of land straddling the border between Tennessee and Mississippi that he’s going to turn into a new power plant and a million-square-foot data centre. He’s betting big on AI!
• The music industry is getting increasingly concerned about the rise of AI-generated music. There has been a notable upsurge over the last 12 months. Humans should be OK for a while though as if the backlash against AI-generated band The Velvet Sundown is anything to go by but then again Japan’s Hatsune Miku has been wildly popular and the virtual performances of a “younger” ABBA have also attracted huge audiences.
• Almost 20% of young UK adults use AI to design their holidays, according to UK travel industry body Abta. I don’t think this is particularly surprising, but I do think that travel companies need to really understand where they can actually add value to the whole experience otherwise they risk extinction.
• OpenAI’s computing deals with the likes of Nvidia, Oracle, CoreWeave and now AMD total a staggering $1tn+. This means that everyone’s in the same boat but the problem is that, as of now, OpenAI can’t actually afford it. There is a lot based on hope here! The AMD deal is huge as it OpenAI will get the option to take a  10% stake in the chipmaker over the next few years (which all depends on milestone targets being hit).
• Deloitte had to issue a refund to Australia’s Department of Employment and Workplace Relations which had commissioned a $290,00o “independent assurance review” to highlight problems with the welfare system that automatically punished jobseekers. Deloitte’s initial report, although substantively correct, had all sorts of errors and “hallucinations” in the footnotes and references because the writers had used AI.

IN HACKING NEWS…

• Hackers have stolen 70,000 personal ID photos from Discord after they breached the defences of a customer service provider employed to verify users’ ages. Starmer’s not going to like this, is he??!

IN TRAD CAR NEWS…

• A big fire at major Ford supplier Novelis destroyed a key part of its New York aluminium plant in a matter of hours. Novelis supplies about 40% of the aluminium sheet used by the entire automotive industry in the US, so this is not good news.
• Jaguar Land Rover gingerly restarted production again after having been hacked recently.
• BMW cut its profit guidance following weak sales in China, highlighting the demise of premium European carmakers who are getting whupped by domestic manufacturers. BMW had a disappointing Q3 and has reduced sales forecasts for the rest of the year in China.
• Aston Martin announced yet another profit warning and appealed for more “proactive support” from the government. When will its disastrous performance ever end?
• Ferrari became the latest sports car manufacturer to rein in its EV plans, saying that 20% of its line-up would be electric by 2030 rather than the previously predicted 40%.

IN EVs…

• Tesla unveiled cheaper versions of its Model 3 and Model Y to attract US buyers who are no longer benefitting from a $7,500 tax credit. Also the National Highway Traffic Safety Administration (NHTSA) is conducting yet another investigation into Tesla’s Full Self-Driving (FSD) functionality after reports of crashes.
• The UK is now BYD’s biggest market outside China, topping sales from the likes of Citroën, Fiat, Honda, Lexus, Mazda, Seat and Suzuki. BYD also outsold Tesla.

• IN REAL ESTATE NEWS – UK ministers announced major changes to the UK’s planning system to make it easier for developers to build houses and carry out infrastructure projects. Ministers are also looking at ways of speeding up the homebuying process but Halifax data shows that house price rises have slowed down in the year to September thanks to affordability still being tricky and worries about the broader economic outlook. This is something that was echoed in the latest RICS survey which showed that interest and activity in the market generally is grinding to a halt.
• IN PHARMACEUTICALS NEWS – AstraZeneca’s chairman said that the company would stop investing in Britain because of the state of drug pricing in the UK (the NHS doesn’t pony up). Many other pharma companies have said the same thing and it looks like it’s had an effect because PM Starmer made positive noises about boosting NHS spending on drugs in order to appease pharmaceuticals companies. Meanwhile, AstraZeneca signed a $555m deal with Algen Biotechnologies to develop and commercialise therapies from the gene-editing tech known as Crispr. Algen specialises in using AI in drug discovery. AstraZeneca also got great results from late-stage trials of its blood pressure treatment baxdrostat. If it goes on to get approval, it’s thought that it could generate annual sales of up to $5bn!
• Law firm Pogust Goodhead took the unusual step of standing aside as lead solicitor in a massive diesel emissions lawsuit. A number of senior lawyers left in protest after chief exec Tom Goodhead was kicked out by its funder, US hedge fund Grammercy, and replaced by a new board. Leigh Day is going to take up the challenge as sole lead.

My fave video this week was the one with the skimboarding! It looks like a lot of fun!