Watson’s Weekly 15-11-2025

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 MARKETS NEWS…

• US tech stocks had their worst week since April last week as $800bn was wiped off their valuations due to investors selling out due to ongoing concerns about stellar AI capex and astronomical valuations. After a recovery midweek, they weakened again because of the same concerns.
• Global markets recovered on news of the end of the US government shutdown but, as I said above, they weakened again.

IN TARIFF NEWS…

• Italy’s biggest pasta exporters are worried about having to stop exports to America because Trump has slapped duties of 107% on some pasta brands – and this is in addition to the 15% tax on all imports from the EU. The affected companies are appealing to the Commerce Department to revise its final ruling.

IN TRUMP THINGS…

• More revelations about Trump and Epstein were released this week as Trump has been somewhat under pressure of late. Last week’s election defeats were frustrating and his poll ratings are falling, so he could really do without this now.
• Trump’s now thinking about dishing out a $2,000 “dividend” from tariff revenues “not including high income people” but he’d need to get approval from Congress to do this. I’d say it’s a bit far out from next year’s mid-terms to do this. Also, I don’t think his disapproval ratings are bad enough yet to warrant offering such juicy freebies. Still, it is potentially an avenue he could pursue!

IN REGIONAL/INDIVIDUAL COUNTRY NEWS…

IN THE AMERICAS…

• IN THE US – talk emerged over the weekend that a tentative agreement had been made over ending the shutdown. Democrats who’d crossed party lines to get an agreement with the Republicans came in for flak but then a deal was signed by Donald Trump. A compromise was reached on condition that a vote would be held on extending existing healthcare subsidies as well as assurances that that the Republicans would limit the number of job cuts among federal workers.
• New trade deals were signed with Argentina, Ecuador, Guatemala and El Salvador as the Trump administration continues to battle to cut food prices for American customers. That being said, reciprocal tariffs of between 10% and 15% will persist on most goods imported from those countries. The deals are narrow in scope and it must be said that this is a situation of their own making!

IN ASIA…

• Japan and China had a bit of friction as Japan’s new PM upped the rhetoric on Taiwan, which President Xi didn’t like. She hinted heavily that any attack on Taiwan could be classed as a threat to Japan, justifying Japan’s Self Defence Forces to respond.

IN THE MIDDLE EAST…

• It looks like the Neom dream is unravelling as costs skyrocket and reality pours cold water on ambition. $50bn has already been spent on The Line, the centrepiece of the project, and construction work across Neom has slowed down. How long can MdS hang on to this?

IN EUROPE…

Centre right and far right parties got together to dilute corporate sustainability reporting rules in a vote in the EU parliament. It seems that Europe is now following Trump’s lead in climate scepticism and deregulation.

• IN FRANCE – parliament voted to suspend Macron’s centrepiece pension reforms. This was a concession PM Lecornu had to make in order to keep the government together and keep hopes of passing a budget alive.
• IN SPAIN – despite Spain’s economy benefiting hugely from immigrant labour, now it seems that disquiet is growing among Spaniards who think this has gone too far. Calls are increasing to tighten conditions for getting asylum in Spain. Over the last four years, Spain has welcomed over two million migrants versus a population of about 49 million.

IN THE UK…

• The economy grew by just 0.1% in Q3, but a lot of that was to do with the hacking-induced production shutdown that JLR had to endure. Everyone’s now just waiting for the Budget!
• PM Starmer had a shocker of a week as there was a lot of government in-fighting going on and his approval rating is getting weaker. A YouGov poll showed that 51% of voters reckon Starmer should step down as Labour leader while only 27% thought he should stay in Downing Street!
• Regarding the dreaded Budget, the chancellor hinted that taxes would rise, then ditched the idea of increasing income tax rates while rumours about her hitting the Cycle to Work scheme surfaced.

IN COMMODITIES NEWS…

• IN OIL – the latest IEA report said that if governments continue to roll back their climate change commitments, oil and gas demand will keep rising for the next 25 years and there will be no meaningful drop in CO2 emissions.
• IN GOLD – suspicions are growing that China’s central bank has buying a lot more gold than it says it is! Analysts at Société Générale say that it could actually be over ten times what it has been reporting, which would equate to over a third of total global central bank demand! The thing is that it’s very difficult to determine who’s buying and selling so it can’t be proved easily – but it might explain why the gold price has been so robust…and this is hitting jewellers hard because they’re having to change designs due to raw material prices rising precisely at a time when consumers are feeling the pinch. Jewellers have traditionally been the biggest source of demand for gold, accounting for about a third of all consumption but demand has been falling because of the higher prices.

IN ENERGY NEWS…

• IN NUCLEAR – the UK’s first SMR site was announced this week, and it’ll be on the island of Anglesey off the Welsh coast. The US was annoyed because its nuclear champion, Westinghouse, wanted this site as well.
• IN WIND – Shell announced that it is ditching plans to build two giant wind farms in the North Sea after restructuring a deal with its partner Scottish Power Renewables. Then we heard that SSE admitted that 25% of its wind power is being wasted because the grid can’t cope with the power its turbines are generating.

IN CRYPTO NEWS…

• The Bank of England has relaxed its stance on digital forms of money and issued new guidelines that should enable authorised firms to issue systemic stablecoins. It will now offer a backstop, but existing limits to how much individuals and businesses can hold will remain unchanged.
• Interestingly, demand for secure crypto devices that keep customers’ tokens safe offline is rising due to increased instances of wallets getting hacked. Companies such as Ledger, Trezor and Tangem are benefitting!

IN BUSINESS TRENDS NEWS…

• IN THE US – despite all the tariff drama, corporate America has reported its best earnings growth in four years. Various new trade deals have helped, as has a recent fragile trade truce with China, but it seems that companies selling services have been doing rather better than those selling goods.
• ALCOHOL – Moutai, China’s biggest alcoholic beverage maker, is suffering from the impact of alcohol bans and Gen Z’s changing drinking habits – something that Diageo and other beverage makers have been suffering from. Talking of which, Diageo finally announced its new CEO, Dave Lewis, who has a reputation as a turnaround merchant most recently credited with reviving Tesco. He’ll start properly in January when he’ll probably do a big review of the business. He’s got a big job ahead of him!
• RECRUITMENT – Reed’s boss is staying positive about agency recruitment in a world of AI but I think that if/when LinkedIn decides to do a proper recruitment portal that all companies can use agency recruitment will be dead. No recruiter on earth can compete with LinkedIn IMO. The reason why I say this is because it has the best, most comprehensive and up-to-date database of CVs in the world. Volume recruiters have very systematic ways of doing things and they train their staff as such. Recruiters need no qualifications (they’re more a nice to have it seems) and they have rigid KPIs they have to hit. They like to think that candidates prefer humans but in reality I think that candidates don’t care who gives them the opportunity as long as they get the opportunity! It’s great if you like your recruiter but it doesn’t have to be the case. Data quality is key here, and so if LinkedIn makes a few tweaks here and there I really think that it can kill off most recruitment agencies. Ironically, it earns a lot of money from them because they pay for superior access, so you could argue that LinkedIn would be biting the hand that feeds but LinkedIn is owned by Microsoft, so if Microsoft were so minded to back LinkedIn in the transition away from relying on agency recruiter revenues it’d be left with a business that pretty much no-one would be able to compete with. Indeed, Reed, etc. – all gone.
• SMALL PARCELS – shows that Brussels is calling for the bringing forward of an EU-wide handling fee on small packages ordered online via platforms such as Shein, Temu and Alibaba. There is a push to get it imposed from early next year, two years earlier than scheduled in order to protect retailers from unfair competition.

IN INVESTMENT TRENDS & NEWS…

• British investors have been pulling money from global markets at a record pace over the last four months as they are getting worried about what Reeves might have in store in the upcoming Budget.
• It turns out that SoftBank has sold out of its entire stake in Nvidia. It plans to put the $5.8bn proceeds into other AI companies. I think this is a huge statement because if you think that there’s going to be more upside, you hang on to a percentage of your holding. Selling the whole lot means that you think that there’s only limited upside from here and you’re getting out while the going’s good…and this all adds to the worries swirling around the market about fantasy valuations that could all come crashing down.
• Robinhood is looking at enabling amateur investors to invest in AI companies. It is putting together a new fund that will invest in a very concentrated portfolio of five or more “best in class” private companies and offer shares in this fund, which will give people the ability to invest with a more reasonable outlay.
• IN IPOs – Lazard reckons that there is a decent pipeline of IPOs to come on the London market next year as companies outgrow their private equity owners and the lustre of New York fades. Potential candidates include the likes of NMMC, Visma, Revolut, Monzo, IVC Evidensia, Ardian, Waterstones, Oaknorth, Starling Bank and Ebury. We’ll just have to wait and see…
• IN M&A – it turns out that Goldman Sachs earned a massive $110m fee for advising Electronic Arts on its recent record $55bn take-private deal. This is the most lucrative M&A transaction in Goldman Sachs’s history! The deal was done in September and Goldman was EA’s sole adviser.

IN EMPLOYMENT NEWS…

• IN THE US – seasonal work is getting very difficult to come by and companies who usually hire temps over the holiday season aren’t offering so many opportunities because corporate America is reining in spending, according to Indeed. Also, a survey by the National Association of Colleges and Employers concluded that next spring’s grad-hiring market is likely to be even worse than this year’s, outlining the most pessimistic outlook since the first year of the pandemic.
• IN THE UK – the unemployment rate rose by more than expected to 5%, according to the latest data from the ONS. This is now its highest level for the last ten years – ex the pandemic period – and has come after a long period of sluggish hiring. Companies will be hoping for an interest rate cut to provide some economic stimulus…then we heard that the latest CIPD survey reflected that 62% of employers surveyed reckon that clerical, junior managerial, professional or administrative roles would probably be lost because of AI. Separately, the latest REC-KPMG jobs reports reflected a fall in the number of permanent roles on offer which temp hiring was up, the implication being that employers are keeping their options open with regard to staffing.

IN CONSUMER TRENDS…

FOR RICH PEOPLE – affluent New Yorkers are expected to ditch Mamdani’s metropolis and go to Texas to escape the new regime and go somewhere where the financial district is nicknamed “Y’all Street” and benefits from a lower-tax, lower-regulation regime than “Wall Street “. Currently, the top 1% of earners in New York currently pay 40% of the state’s income tax and Mamdani’s policies will hit them squarely. Elsewhere, there’s a rising trend of wealthy Chinese moving to Dubai in order to set up family offices and get residency thanks to growing frustration with what they have to go through in order to get established in Singapore.

FOR EVERYONE ELSE – the flow of Canadians who migrate south into sunnier American climes to avoid harsh winters (aka “snowbirds”) has slowed down significantly. This is happening because of the escalating economic war and strict new rules on immigration which have irked Canadians and the resulting avoidance of America seems to be gathering pace. In the UK, research by Rathbones suggests that more young adults are leaving the UK because of the low pay, rising tax burden and lack of affordable housing while the latest data from BRC and KPMG shows that UK retailers experienced their slowest sales growth last month since May thanks to shoppers reining in spending ahead of the Budget.

IN REAL ESTATE NEWS…

• Halifax stats showed that house prices have been accelerating overall but that they’d been particularly strong in the North and Scotland while in London and the south east they are falling. Research by LonRes confirmed this weakness in London and the latest RICS survey showed that the UK housing market is cooling off ahead of the autumn Budget. Buyer demand, sales activity and new instructions have all fallen.
• Meanwhile, Lloyds Banking Group has quietly become one of the biggest private landlords in the UK with a residential property portfolio now worth over £2bn as it tries to diversify its income streams.

IN RETAIL NEWS…

• IN SUPERMARKETS – UK grocery price inflation is slowing down, according to the latest data from Worldpanel. There was bad news for Asda because its market share hit a record low, as the downward trend has continued for 20 consecutive months! There’s still a long way to go for this turnaround to work…
• Burberry saw a return to growth in China as it announced its first quarterly sales increase in two years! It was also particularly heartening to see that China growth was mainly driven by younger shoppers seeking out “authentic” British brands. It really does feel like luxury is staging a comeback now!
• British brands are finding that the Chinese “Singles Day” online shopping event is getting less lucrative as they have experienced the increased thriftiness of Chinese consumers. It has been big in the past but not so much these days.

IN LEISURE NEWS…

• IN AIRLINES – Ryanair caused a bit of a stir by announcing that it would be switching to digital-only boarding passes (so not printouts). The airline is known for doing unpopular things but it’s possible that other airlines will be looking at this with great interest before possibly doing it themselves!
• IN RESTAURANTS – Domino’s UK has now rolled out its Chick ‘N’ Dip sub-brand to around 200 of its 1,400 branches across the UK and Ireland as the company believes we’ve reached “peak pizza”. TBH, I think fried chicken is quite popular as well (there’s apparently some place called KFC, you might have heard of it perhaps 🤣) but they’re going with it because they see it’s popular and they can offer that from their existing kitchens.

IN TECH NEWS…

• IN DATA CENTRES – Anthropic announced a $50bn investment in new US data centres over the next few years and CoreWeave reported a doubling of revenues from the AI boom in Q3. CoreWeave’s chief downplayed fears of a data centre bubble thanks to “unprecedented demand for AI”.
• ABOUT POWER – there was some debate as to the “winner” of the AI race being decided by access to power. Some argue that China’s ahead on this with its new power generation rollout. Jensen Huang recently that China will win this race because of its lower energy costs and looser regulation.

IN MEDIA NEWS…

• There’s a bit of M&A chat going on at the moment in the sector what with Paramount, Comcast and Netflix preparing bids to buy Warner Bros Discovery. Back home, ITV’s looking to sell its TV business to Sky that could prompt the break-up of the embattled broadcaster.
• The BBC’s director-general, Tim Davie, quit over the Trump controversy, which the Trump camp’s making a big deal out of. I would have thought that at least part of this outrage is down to Trump having a bad week recently and wanting to shift the narrative away from all the Epstein allegations.
• Disney’s share price fell thanks to investor disappointment at the performances of its streaming and experiences business in Q4.

IN AUTOMOTIVE TRENDS & NEWS…

• The CEO of Wallenius Wilhelmsen, the world’s biggest operator of car-carrying ships, who observed that European carmakers are losing market share on a global basis thanks to huge growth in shipments of cars from China to Latin America, Europe, Africa and Australia. He added that “The Chinese producers have gone from being cost leaders to now being technology leaders”.
• Toyota announced plans to invest up to $10bn in the US over the next five years following on from Trump’s Japan trip late last month. It didn’t provide any details how it would spend the $10bn though!
• US EV sales are slowing down, according to the latest figures from Cox Automotive, thanks to Trump’s stance on US climate policy. EV sales in the new car market hit a record 11.7% as recently as September but car makers have, one by one, been reining in their EV efforts.
• EVs will lose their exemption from having to pay the London Congestion Charge from January, when the price will also go up from £15 to £18. EV drivers will, however, get a 25% discount.

IN DRIVERLESS…

• Waymo’s going to expand its driverless taxi service in LA, Phoenix and San Francisco by being allowed to use highways! This will broaden the number of destinations they can go to, including places like San Jose International Airport. This will be a major development for the advancement of autonomous vehicles! That being said, would you like to be a passenger in one of these things?

• IN PHARMACEUTICALS – Pfizer won the battle to buy Metsera after Novo Nordisk threw in the towel following Pfizer’s improved bid. This certainly shows that the appetite for M&A is alive and well!
• IN FINANCIALS – UK banks are pushing for an easing of the capital rules so that they can better compete with private credit providers. Private credit groups have grown strongly since the 2008 financial crisis when capital rules suddenly became much tighter to ensure that there wasn’t a repeat of what caused the crisis. Elsewhere, BlackRock is pimping up its flagship quant hedge fund to take on the big boy hedge fund players including DE Shaw, Citadel and Millenium. It’s adding stockpickers to the Systematic Total Alpha (STA) data-driven hedge fund to combine human and computer-driven strategies. Meanwhile, the world’s biggest listed hedge fund – Man Group – announced plans to cut London-based jobs and move them to Bulgaria in a push to cut costs and improve performance.

My fave video this week was, by far, the one of the dog joyfully jumping into massive piles of leaves! I couldn’t help myself from watching this over and over again!