Watson’s Weekly 22-11-2025

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 WAR NEWS…

• US and Russian officials bigged up a “peace plan” from Trump and chums but it looked more like a Christmas wish list from Putin. Talks are ongoing.

IN DEFENCE NEWS…

• It looks like Berlin and Paris are going to scrap plans to build a fighter jet jointly and instead concentrate  on developing a command and control system called the “combat cloud” – a cloud-based interface that will link fighter jets and pilots to sensors, radars and drones in addition to land and sea-based command systems.
• Brussels has decided to cut the price it’s demanding from the UK to join the €140bn Security Action For Europe (SAFE) defence fund from €6.7bn down to €2bn. The UK’s still holding out…

IN TRUMP THINGS…

• REGARDING EPSTEIN – Trump backed the vote to release the Epstein files, US Congress backed it overwhelmingly and he then directed the DoJ to release them.
• REGARDING THE GOVERNMENT SHUTDOWN – the FAA lifted shutdown-related flight restrictions as things got back to normal after a tense few weeks.
• REGARDING EDUCATION – the number of new foreign students in the US fell by over 17% over visa worries. Unless Trump changes things with regard to student visas and publicises it well, I would have thought that numbers will keep falling.

IN REGIONAL/INDIVIDUAL COUNTRY NEWS…

• IN THE US – it turns out that the Fed is divided on the direction for the December interest rate meeting. The market had assumed that a cut was a foregone conclusion, but that assumption has since weakened. Meanwhile, Crown Prince Mohammed bin Salman visited the White House, participated in the latest funding round of Luma AI and announced a partnership between rare earths group MP Materials, the US military and Saudi Arabia’s state mining company, Maaden, to build a processing facility in the kingdom. Trump also lifted 40% tariffs on certain agricultural imports from Brazil in a tacit admission that his tax tactics are hitting ordinary Americans in the pocket with higher grocery prices.
• IN JAPAN vs CHINA NEWS – China’s imposed travel bans on its citizens visiting Japan and cancelled events as the government expressed anger at PM Takaichi’s comments last week on Taiwan. Japanese tourism-related stocks plunged as a result as they make up 25% of foreign visitors to Japan.
• IN JAPAN – PM Takaichi announced a $135bn stimulus package to prompt economic growth and protect households from the rising cost of living. This was her first major policy announcement and is the biggest stimulus since Covid.
• IN EUROPE – we saw that Spain’s deficit is currently on track to drop below Germany’s for the first time in two decades! It wasn’t so long ago that its economy – along with Italy – was widely judged to be a “basket case”.
• IN THE UK – inflation eased for the first time in five months to 3.6%, which might make it easier for the Bank of England to justify an interest rate cut at its next meeting.

IN CRYPTO NEWS…

• It turns out that investors have pulled $1.1tn our of crypto markets over the last few weeks, denting Trump’s desire to be a “crypto president”. The fall over the last 6 weeks is thought to have been at least partly due to buyers who borrowed to purchase more crypto having to sell.

IN INVESTMENT TRENDS/NEWS…

• IN INVESTMENT NEWS – Saudi Arabia’s PIF sold stakes in US-listed stocks, reducing its exposure by 18% versus Q2. It turns out that Berkshire Hathaway has built up a $4.3bn stake in Alphabet, but it’s also sold down its stake in Apple for the second consecutive quarter. We also heard that Mike Burry – made infamous by The Big Short – has shorted both Nvidia and Palantir (although his calls have actually been pretty mixed) and that billionaire PayPal founder Peter Thiel has sold his entire stake in Nvidia. Meanwhile, the latest EPFR data shows that domestic investors have sold out of the UK market at a record rate this year – but, despite this, the FTSE100 is on track to have its best year since 2009 as foreign investors look to diversify their portfolios outside the US!
• IN MARKETS NEWS – indexes have see-sawed this week between worries about tech stock valuations on the one side and relief that Nvidia is still storming ahead on the other!
• IN M&A – Goldman Sachs is on course to have its best M&A performance in 24 years, beating the previous best performance of 2015. It’s just played a part in a lot of deals! Meanwhile, Johnson & Johnson has put in an offer to buy cancer drugmaker Halda for $3bn, its latest acquisition in a recent spending spree. Law firms Ashurst and Perkins Coie have agreed a merger which would create one of the world’s top 20 law firms by revenue. The enlarged entity will be known as Ashurst Perkins Coie and represents the biggest US-UK law firm tie-up since A&O merged with Shearman & Sterling in 2023. WPP’s share price jumped on takeover bid speculation and the owner of upmarket bakery chain Gail’s  is on the lookout for new investors to fund further expansion. It had been put up for sale about a year ago, but clearly that hasn’t worked, so they’re doing the next best thing – getting some financing to expand.
• IN IPOs – the South Korean company behind the “Baby Shark” video saw its share price boom initially by a chunky 62% on its market debut this week. It’s not just a one hit wonder, though – its Bebefinn franchise is also extremely popular!

IN TECH NEWS…

• Microsoft and Nvidia are going to invest up to $15bn in Anthropic and, in return, Anthropic said it will buy $30bn in computing capacity from Microsoft, whose data centres will use Nvidia’s AI chips.
• Elon Musk’s xAI is currently in talks to raise $15bn, which would give it an implied valuation of $230bn. This would be over double what it was valued at in March!
• Meta won a case again the FTC which had been looking to break the company up. The FTC had accused Meta of maintaining an illegal monopoly with its acquisitions of WhatsApp and Instagram, so this is a major setback for the FTC.
• Apple is intensifying its search to replace current CEO Tim Cook who has been in the role since 2011. The company’s enjoyed huge success over that time but a difficult new AI era looms ahead!
• IN AI NEWS – OpenAI says that its latest GPT-5 model has been helping to accelerate research in maths and science while Jeff Bezos launched an AI start-up called Project Prometheus. It has already raised $6.2bn in funding and will focus on AI that can support engineering and manufacturing in the fields of aerospace, computers and automobiles among other areas.
• IN CHIPS NEWS – Nvidia knocked it out of the park again with its quarterly results! Jensen Huang said “There has been a lot of talk about an AI bubble. From our vantage point we see something very different”. This cheered the markets. Back in Europe, the Dutch government has stepped back from its intervention in Nexperia but it remains to be seen as to whether the Dutch government is going to make a complete withdrawal – if it does, it could be pretty embarrassing…
• IN HACKING – a number of websites, including X and OpenAI, suffered a number of simultaneous outages as Cloudflare itself had an outage. Cloudflare is a global cloud services and cybersecurity firm that provides data centre, website and e-mail security and defence against data loss and cyber threats. It was at pains to say that there was “no evidence that [it] was an attack or caused by malicious activity”. It became a big deal because Cloudflare provides services to about 20% of the world’s websites!

IN MEDIA NEWS…

• Warner Music settled a lawsuit and signed a licensing deal with AI start-up Udio to give the platform access to its songs. As part of the deal, Udio will launch a new subscription service next year that will enable subscribers to create their own songs using licenced tracks.
• Paramount, Comcast and Netflix submitted their offers for Warner Bros Discovery in a bidding process. Additional rounds are expected and the company said that it wants to conclude the bidding process by the end of the year.

IN EMPLOYMENT NEWS…

• IN THE US – the latest data from the Bureau of Labor Statistics smashed forecasts on the number of jobs created in September and was up strongly on the net job losses in August, potentially making it more difficult to justify an interest rate cut at the Fed’s next meeting.
• IN THE UK – the latest data from the ONS showed that the number of men Not in Education, Employment nor Training (NEETs) boomed in the three months to September by 3% while the number of female NEETs fell by 3.8% versus the previous quarter. Adzuna data pointed out that the number of entry-level roles in the UK is also falling.

IN CONSUMER TRENDS…

• The latest report from GfK showed that consumer confidence in the UK fell over the last month. This is to be expected given all the pessimistic assumptions we are all bracing ourselves for ahead of next week’s Budget!
• There was good news for concert-goers as UK ministers are looking into banning the resale of tickets for live events over face value. The idea is to crack down on ticket touts and resellers who charge astronomical prices for tickets to popular events.
• In personal finances, the Prudential Regulation Authority (PRA) has decided to increase deposit protection from the current level of £85,000 up to £120,000. This means that if you’ve got up to £120,000 in your bank account (!) and your bank goes bust the state will protect you from the loss and reimburse you for it so you won’t suffer any loss up to that amount. The joint account limit will be raised from £170,000 to £240,000.
• IN PROPERTY MARKET CHAT – Rightmove reported that asking prices are falling, no doubt because everyone’s worried about next week’s Budget. It also reported that almost 20% of potential home buyers have put their plans on hold for the same reason. Meanwhile, in commercial property, Bond Street rents have become the highest in the world!
• IN CONSTRUCTION – Councils in England will lose the power to block large-scale housing projects as the government tries to push forwards with its housebuilding agenda. Meanwhile, housebuilder Crest Nicholson is going to cut jobs and shut down one of its regional offices. This was blamed on “subdued” demand and ongoing uncertainty surrounding government tax policy.
• IN MORTGAGES – IN THE US, Trump has been floating the idea of 50-year mortgages but the problem is that although this may make monthly payments more reasonable in the short term, it doesn’t address the more fundamental problem of an insufficient housing supply. IN THE UK, lenders – including Barclays, Halifax and Skipton Building Society – have been cutting mortgage rates to drum up business but Nationwide reported that mortgage lending has actually fallen since the end of the April stamp duty rush.

IN RETAIL NEWS…

• IN LUXURY – Kering’s new chief outlined a turnaround roadmap that will ensure recovery across the group, which currently relies heavily on Gucci. It looks like Kering’s going to sort its finances out, cut excess inventory and then do a brand-by-brand overhaul.
• IN APPAREL – TK Maxx’s owner, TJX, had a decent quarter and is upbeat about the holiday season, Gap also did the same but in the UK, JD Sports is getting hit as UK youth unemployment is damaging sales growth and profits. Some are also blaming sluggish performance on its over-reliance on Nike.
• IN SUPERMARKETS – Walmart put in a strong performance thanks to less affluent customers still spending on groceries and more affluent ones trading down but Asda’s problems in the UK continue and it’s selling off 24 stores and a distribution centre – and leasing them back – in order to raise money.
• IN ONLINE RETAILERS – Temu’s owner PDD announced sluggish growth over the quarter after years of stellar performance. Its domestic market remains lacklustre while overseas markets are getting more difficult because of the closure of the de minimis loophole in some big markets.
• IN HOME GOODS – Home Depot cut its Q3 outlook because demand for home improvements slowed down but then La-Z-Boy put in a decent Q2, which is impressive given that they sell predominantly big ticket items and confidence isn’t great right now.
• GENERALLY – Ocado’s American dream took a hit this week as its main US supermarket partner, Kroger, pulled out of the automated warehouse deal that was the lynchpin of Ocado’s move into the country. Kroger said that three of its eight automated warehouses would be shut down for not meeting financial expectations. WH Smith’s CEO resigned following an investigation into a massive accounting error that overstated the profitability of the company by up to £50m and Majestic Wine announced plans to roll out its Vagabond wine bars to address the 25-35 year old demographic. It bought the chain out of administration just two years ago. This should be useful because its current core demographic is more 35-45 year olds.

IN LEISURE NEWS…

• Nando’s is planning to open more outlets across the UK despite warning about the damaging effect of higher labour and energy costs. I think this is a potentially foolhardy move given current conditions.
• Wizz Air is going to reduce the number of flights it operates from Gatwick in order to save money. It says that it loses money flying out of there because of its high operating fees and unattractive departure slots. It’ll shift more flights from Gatwick to Luton.

IN CAR-RELATED NEWS – Tesla is now requiring suppliers to exclude China-made components as it tries to navigate the tariff minefield resulting from current US-China trade tensions. Tricky! Then we saw that Amazon’s Zoox robotaxi service is going to do a limited roll out of its robotaxi service in San Francisco in an attempt to eat into Waymo’s early lead in the driverless taxi space.

FINTECH – Klarna’s first quarterly earnings announcement since flotation in September were disappointing as it diversified away from BNPL and into more conventional lending. The company’s share price has tanked by over 25% since the listing.

IN LAW – US law firms – including the likes of Fried Frank and Cravath – in London are dishing out bonuses that are triple the size of UK Magic Circle firms. Meanwhile, Clifford Chance announced that it’s going to cut business services staff headcount in London by around 10%. The axe is coming down in finance, HR and IT departments. This has been blamed on greater use of AI and falling demand for some business services.

My fave video this week was the one about a sport that we can all potentially have a go at! You can tell how seriously this is taken as participants are wearing gloves 🤣