Category: Protected – Watson’s Weekly

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…

• Putin hinted that Russia might start nuclear weapons tests in response to Trump’s rhetoric last week where he asked his defence department Department of War to start testing again.

IN TRADE NEWS…

• China showed signs of easing the semiconductor export ban on Nexperia after carmakers around the world expressed concern about the restrictions clogging up supply chains. 80% of Nexperia’s finished products are processed in China.
• The US is allowing Microsoft to ship Nvidia chips for use in the UAE for the first time, months after Trump had struck an original deal in May. Microsoft now plans to boost its UAE investment from $7.3bn over the last three years to over $7.9bn for the 2026 to 2029 period, $5.5bn of which will go towards AI and cloud infrastructure capex.

IN MARKETS…

• It was a bit of a rollercoaster this week! US stocks boomed on AI hype, falling interest rates and Trump’s reining in of his trade war – then they fell as investors got tech valuation jitters, rebounded again on stronger-than-expected US jobs data and then fell again into the end of the week.

IN TRUMP THINGS…

• The White House struck a deal with Eli Lilly and Novo Nordisk to cut prices for their obesity drugs to offer on the TrumpRx platform. This will get them a three-year exemption from potential Trump tariffs and so  can rely on higher volume to make the lower prices work.
• The US Supreme Court justices initially expressed scepticism about the legality of Trump using the IEEPA to back his global tariffs. A group of American businesses and 12 US states got together to bring the case, saying that they’d been hit by Trump’s tariffs.
• Trump had a tough week because his Republican party got trounced in elections, including the high profile mayoral election in New York which Zohran Mamdani won. He tried to brush off the election losses but it seems that people are getting increasingly disgruntled about higher prices, squeezed household budgets and – particularly for public sector workers, job uncertainty – particularly given that Trump’s building a $300m ballroom at the White House!

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – the government shutdown continued into unchartered territory, equalling the longest one since 2018-19. It’s left hundreds of thousands of public sector workers without pay, services have been closed and the supply of food stamps has been disrupted for 40m people. 40 major US airports have had to cut flight traffic by about 10% from Friday.
• IN CANADA – PM Mark Carney pledged C$141bn to help offset the effects of Trump’s tariffs as he unveiled his maiden budget this week. There will be increases in spending on defence and infrastructure that will at least be partially paid for by cuts to the public sector.
• IN GERMANY – Chancellor Merz supported proposed protectionist measures suggested by the EU Commission to safeguard the country’s troubled steel industry from cheap Chinese imports. This is a major about-turn as he’s been very vocal in the past about the sanctity of free trade!
• THE NETHERLANDS – the country lurched back to more centrist politics this week as the liberal D66 party won a lot of votes. No parties want to work with the far-right Freedom Party so it’s a question of who’s going to form the coalition. The EU will no doubt be relieved by this result!
• IN THE UK – the Bank of England held interest rates steady at 4% but the governor left the door open for a cut after the Budget. Talking of which, there was ongoing speculation as to what would be included and what wouldn’t! There’s a lot of talk about those “with the broadest shoulders” taking most of the strain and that included chat about expensive homes being included in higher bands of council tax, an exit tax for people leaving the UK, targeting pensions etc. There was also talk about targeting EV drivers with a new per-mile charge (which EV makers pushed back on) and PM Starmer didn’t do anything to dampen expectations of income tax rises. In the meantime, M&S’s boss warned that the chancellor is scaring consumers into not spending and not doing enough to encourage growth. Oxford Economics published research showing that the UK’s national debt has grown at the fastest rate of any advanced economy over the last 20 years and the BCC observed that smaller companies are struggling to benefit from recent trade deals. On the plus side, UK services activity ticked up in October as customer demand remained resilient in the face of all the Budget uncertainty!

IN COMMODITIES NEWS…

• IN OIL – OPEC+ decided to pause oil output rises next year after repeated warnings of a surplus. Production will still increase in December but additional rises will be suspended from Q1 next year. Swiss trader Gunvor dropped its $22bn bid for Lukoil assets after the US moved to block a deal “as long as Putin continues the senseless killings” in Ukraine.
• IN GAS – ExxonMobil led a deal with Energean and HelleniQ Energy that will involve drilling in the Ionian Sea about 30km west of Corfu with a view to potentially begin by the end of 2026. ExxonMobil will have a 60% stake in the venture and operate it if the tests look good. This is the first gas exploration deal between the US and Greece for 40 years!

IN ENERGY…

• IN WIND – Danish wind power developer Ørsted is selling a 50% equity stake in the Hornsea 3 offshore wind farm off the east coast of Yorkshire to Apollo in a deal worth $6.5bn. At least with this in place it’s more likely to get finished!
• IN SOLAR – Solar power producer Pine Gate Renewables filed for Chapter 11 bankruptcy. Its lenders will buy its assets, independent power producer platform and its development pipeline. Trump’s distaste for renewables continues to have repercussions…

IN CRYPTO NEWS…

• Citadel Securities and Fortress, along with other investors, injected $500m into Ripple, giving the stablecoin company an implied valuation of $40bn. This is just another example of how crypto continues to make its way into “mainstream” finance.

IN INVESTMENT NEWS…

• IN IPOs – the Princes lacklustre IPO at the end of last week contrasted with the more robust performance of Shawbrook a few days previously. Not all flotations are absolute bangers even in the US (travel tech group Navan lost 20% on its market debut last week on the NASDAQ) but if you’ve got momentum, you can afford the odd flop. When your pipeline’s as poor as London’s, every flotation counts and affects sentiment.
• IN M&A – Kimberley-Clark struck a $40bn deal to buy Kenvue to create a health-and-wellness company behemoth. It’s not universally popular with investors because Kenvue could potentially get caught up with problems given Trump’s recent baseless comments on Tylenol. SM Energy and Civitas Resources announced a merger to create a $13bn Permian Basin-focused driller in an all-stock deal. The new entity will be called SM Energy. Meanwhile, Starbucks sold a 60% stake in its China business to Boyu Capital, which has a reputation for turning around global brands in the Chinese market.

IN FINANCIALS NEWS…

IN BANKS – US bank deals are flourishing. Almost 150 bank mergers worth about $45bn have closed so far this year, but given that there are over 4,000 regional banks there’s clearly more to go! Trump’s “light-touch” style of regulation is certainly helping!

IN OTHER FINANCIALS – London Quant trading funds are really getting a reputation and companies such as XTX, Qube and Quadrature are closing the gap with quant funds in New York. Meanwhile, it looks like there are plans afoot to launch a SPAC, codenamed “Project Mayflower” on the LSE with a view to buying a business worth somewhere between $2bn and $5bn.

IN CONSUMER TRENDS…

• IN THE US – the effect of Trump’s policies continue to filter through. The future of EV battery factories looks uncertain, ICE’s crackdown on immigrant workers is causing unease and Trump’s approval rating appears to be slipping. There have been stories about his policies resulting in empty shelves and a rising rate of car payment defaults but Visa figures last week showed that consumers were still spending. Overall, this suggests to me that the haves are doing quite well but the have-nots aren’t.
• IN THE UK – Research from MoneySuperMarket shows that UK consumers have been making deep cuts to discretionary spending over the last year in response to the rising cost of living. Everyone’s really just waiting it out for the Budget…
• IN PROPERTY-RELATED NEWS – Miami realtors are talking up the chances of New York millionaires fleeing Mamdani’s regime and settling in “The Magic City”. It hasn’t really resulted in a deluge so far. Back in the UK, Savills halved its forecast for house price growth in 2026 given Budget uncertainty and interest rate prospects. That being said, it turns out that HSBC is offering 6.5x salary mortgages to Premier account holders but student landlords are suffering because of the fall in Chinese student numbers.

IN RETAIL NEWS…

• IN SUPERMARKETS – Sainsbury’s upgraded its profit forecasts for the full year but it did say that it was worried about the consumer sentiment-dampening effect the Budget would have, so it is launching Black Friday deals earlier than usual this year. Asda sold Leon back to its original co-founder just four years after they bought it in 2021 for £100m. The Issa Brothers really should have stuck to owning garages via their EG Group as they managed to destroy both Asda and Leon!
• IN APPAREL – Associated British Food, mooted the idea of spinning off its apparel retail business, Primark, to become a separate quoted entity on the LSE. Initial investor reaction was pretty underwhelming, but I think it would be much better for the long run as both companies would have purer investment stories. France is looking to ban Shein after a controversy involving the company’s website appearing to sell childlike sex dolls and a large number of weapons.
• ELSEWHERE – John Lewis is testing out a new VIP area at its flagship London store for loyalty card holders. It’ll go until Christmas upon which time the retailer will decide whether to roll it out or not. Meanwhile, luxury tile retailer Fired Earth has fallen into administration and shut all of its high street stores.

IN CONSUMER GOODS NEWS…

• Diageo cut sales and profit forecasts for the year on sluggish demand in the US and China. It’s still looking for a CEO to sort out the mess.
• Monster Beverage reported big sales in the latest quarter thanks to higher demand for energy drinks. One of the reasons behind this is thought to be because they’re a cheaper way to get a caffeine fix at the moment!

IN LEISURE NEWS…

• IN AIRLINES – Ryanair saw a 40% profit boost thanks to Europeans’ reluctance to fly to the US. The company predicted that more people will continue to holiday in Europe and increased its passenger forecast for the year.
• IN HOSPITALITY – Airbnb sales were up by 10% and travellers are now booking vacations further in advance, which is good for visibility purposes and implies that consumers are more confident.
• IN RESTAURANTS – Yum Brands is considering the options for its Pizza Hut business. It recently bought out the UK operation. Elsewhere, McDonald’s bucked the gloom in the fast food sector by having a decent Q3 thanks to new promotions and menu items.

IN AI NEWS…

• Nvidia’s Jensen Huang reckons that China “will win” the AI race with the US because of lower energy costs and looser regulation.
• AI is helping tech companies like Meta and Google take more control of the ad market by improving ad targeting. This runs counter to expectations of an advertising slowdown resulting from tariff wars and increasingly budget-conscious consumers. What a contrast to the fortunes of the trad ad agency WPP – which having a ‘mare at the moment. ITV’s also seeing a big drop in ad revenue in the run-up to Christmas, which isn’t great…
• IN DEALS – OpenAI struck a $38bn computing deal with Amazon Web Services where OpenAI will commit to make use of AWS infrastructure for seven years to run its products. This will tie OpenAI closer to Amazon, which has already invested $8bn in rival AI group Anthropic. It also makes OpenAI slightly less dependent on Microsoft. Snap’s share price jumped by about 24% following the announcement by Snap that Perplexity AI’s search engine will pay $400m for one year to feature prominently in the Snapchat app starting in 2026. Snap also announced a strong Q3 performance.
• IN USAGE – scientists have discovered that structural heart problems by using an AI tool to interpret data from Apple’s smartwatch. This could be a real game-changer in terms of early heart disease diagnosis. Elsewhere, a team led by Nobel Peace-winning scientist David Baker used an AI tool to create new antibodies that could accelerate drug development! The generative AI model can be used to develop completely new antibodies from scratch! Meanwhile, a study by Lloyds Banking Group showed that financial advice is the most commonly cited reason for using AI – at 56% of respondents! They are still doing so with some trepidation, though, as 80% of respondents said that they are concerned about getting inaccurate information and 83% worried about data privacy.

IN CHIPS NEWS…

• Chinese owners of Lincoln-based Dynex Semiconductor have shifted production of IGBT chips, which are used to control high power loads in electric trains and cars, to China because they have been blacklisted by the US government. Concerns are building that a potential hollowing out of Chinese-owned British tech companies as China reshores production.
• AMD posted much higher profits and sales over the quarter as the company dived deeper into AI data centres and benefited from rising sales of PC processors.
• Qualcomm announced a Q4 loss thanks to a tax-related charge but it actually saw a 10% increase in sales, so it sounds like there are better times ahead.

IN SOFTWARE NEWS…

• Palantir announced yet another very strong performance with revenues hitting record levels thanks to a surge in new customers. Its share price has more than doubled so far this year thanks to the huge boost it’s had from executing government contracts and it raised its full year guidance! There’s a lot of talk about the company being way overvalued, though!

IN HARDWARE NEWS…

• Nintendo raised its Switch 2 sales forecasts and earnings guidance for the full year as its latest device proves to be popular.
• Quantinuum, one of the biggest players in quantum computing, unveiled its latest computer this week, called the Helios. Everyone’s getting very excited about quantum computing but no-one seems to quite know what its practical uses are going to be!

IN SOCIAL MEDIA NEWS…

• Elon Musk launched “Grokipedia” this week. He described it as “an open source, comprehensive collection of all knowledge”. It’s AI powered and not “woke”. It’s also not very good at the moment…

IN AUTOMOTIVE TRENDS…

• IN TRAD CAR NEWS – European car makers are saying that they will boost investment in Europe significantly if Brussels relaxes its 2035 deadline to ban petrol engines. They say that Europe’s car market will shrink further if the industry is forced to sell just EVs. The European Commission is due to review the 2035 ban in December. Elsewhere, we heard that Ford is considering scrapping the electric version of its F-150 truck and Ferrari tried to reassure investors that “we do not see any weakening in our pricing power” and raised forecasts for the full year.
• IN EV NEWS – Elon Musk’s proposed $1tn pay package was voted through successfully. There was a lot of comment about this in the build up but I don’t think it was ever in doubt!
• IN DRIVERLESS – the share prices of two of China’s biggest robotaxi start-ups, Pony.ai and WeRide tanked by up to 15% when they listed in Hong Kong this week. There were concerns about profitability given what a competitive market it’s going to be. Baidu’s Apollo Go and Xpeng are both planning on launching three new robotaxi models next year at cheaper price points than Pony.ai!

IN PHARMACEUTICALS NEWS…

• AstraZeneca won shareholder approval to get a New York listing. Given that the company makes almost 50% of its revenues in the US and Trump’s ongoing pressure for pharma companies to move production there or face massive tariffs, this is unsurprising. It will still retain its primary listing in London, remain in the FTSE100 and have its HQ in the UK, so it’s not a complete retrenchment.
• Pfizer filed a lawsuit to block Novo Nordisk’s late bid for Metsera and later matched Novo Nordisk’s higher bid.

IN SERVICES NEWS…

• Uber’s profit fell short of expectations for Q3 but that was largely thanks to a hefty one-off legal charge of almost $500m relating to tax probes. Q4 bookings are looking good currently…
• PwC cut headcount in marketing, HR and other support functions in the US as part of a business overhaul and KPMG announced that it would cut overtime pay for junior auditors in the UK as part of broader cost cutting measures. Data from the Institute of Student Employers highlighted the fact that the gap between the lowest graduate salaries and the minimum wage is narrowing. Some chief execs are worried this will lead to recruitment problems – but I guess if they are that concerned they should just pay them more!

My fave video this week was the one that I wish was true and not AI-generated! Do you think it’s AI-generated??

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!

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…

• Israel launched a strike on Gaza after accusing Hamas of breaching ceasefire conditions. I’d say that Trump was too quick in trying to claim the Nobel Peace Prize! The drama continues…

IN TRADE & TARIFF NEWS…

• Trump met with Xi this week in South Korea when he stopped off on his Asian tour. Trump talked a good game about progress but all he got was an agreement to sell some more soybeans and relax exports of Nvidia’s microchips. Meanwhile, China continues to hold all the cards with its stranglehold on rare earths and Trump seems to back down every time he makes a threat and the reciprocal action gets serious. World stock markets rallied on hopes of a thaw but there’s a long way to go yet.
• Trump said that he’s cut the 20% fentanyl tariffs on China that were originally imposed to force Beijing to limit the export of chemicals used to make the synthetic opioid that is central to the current opioid crisis.
• Trump raised tariffs on Canada by 10% in retaliation to the anti-tariff ad sponsored by the Ontario government. It had the desired effect as Ontario premier Doug Ford said that the ad campaign would be suspended as PM Mark Carney sought to re-engage in trade negotiations with its neighbour.

IN INDIVIDUAL COUNTRY NEWS…

IN THE AMERICAS…

• IN THE US – the Fed cut interest rates by 0.25% for the second month in a row but Fed chief Jay Powell said it wasn’t a given that there would be another cut at the next meeting despite the market thinking that there is a 90% of this happening! This might have been helped by US inflation hitting 3% for the first time since the start of the year, which was below market expectations. The ongoing government shutdown could cost the country dearly, according to the latest estimates by the congressional budget office. However, their estimates are so wide-ranging as to be pretty useless. Meanwhile, IMF forecasts suggest that US debt is set to overtake Italy and Greece in terms of percentage of GDP.

IN ASIA…

• IN CHINA – the latest official data showed that factory activity slowed down for the seventh month in a row. China has been relying on manufacturing and exports to drive economic growth to make up for the drag of its problematic real estate sector, so this isn’t great.
• IN JAPAN – Trump and Japan’s new PM Sanae Takaichi met and signed two agreements – one calling on both governments to “take further steps for a new golden age” and the other securing and investing in the supply, mining and processing of rare earths. Japan’s central bank kept interest rates on hold and the Yen weakened because it delayed a hoped-for interest rate rise.
• IN SOUTH KOREA – Trump gave South Korea the green light to build nuclear-powered submarines in Philadelphia, something that has not been on the table before because of concerns over proliferation. It’s interesting to note that South Korea’s KOSPI index is the world’s top-performing major stock index as it has climbed by over 66% this year thanks to a combination of big inflows of foreign investment, exposure to AI, reforms in corporate governance and booming exports.

IN EUROPE…

The ECB kept interest rates on hold despite concerns that inflation could rise, which would mean that the Bank would have to increase interest rates. This is the third meeting in a row that they’ve been left unchanged.

• IN RUSSIA – the Kremlin is apparently getting increasingly concerned about the possibility of a coup at a time where the economy is showing cracks. Businesses have been hit by high interest rates, government borrowing costs have boomed and pockets of protests have been breaking out. Financing its war in Ukraine is getting increasingly painful, especially since the US is putting pressure on its oil exports.
• IN THE NETHERLANDS – the liberal D66 party made major gains in the parliamentary elections and the gains it’s made suggest that there’s a swing away from the far-right. It’s not all over yet though because there’s a coalition to be put together…

IN THE UK…

• The OBR is on the verge of downgrading its productivity forecasts by 0.3 percentage points, greatly increasing the chance of big tax rises in the Budget. Fears are increasing about Reeves repeating the “once in a parliament” £40bn Budget raid.
• Supermarkets warned the chancellor that tax rises could push food prices up (they are particularly concerned about a mooted surtax on business rates that hinge on property size).
• Reeves is looking at scrapping the windfall tax on UK oil and gas in order to encourage oilfield development and unlock investment. The mood music certainly seems to be pointing that way…
• And while we’re on the subject of Rachel Reeves, it emerged that she breached housing rules by unlawfully renting out her family home without a licence. She used a lettings agency to rent out her family home after they moved into a flat in Downing Street when Labour won the election. This is a rather cynical way of looking at it, but it’s possible that Starmer could use this as an excuse to sack her if her Budget measures continue to get negative feedback. Getting someone new in would make it easier for the PM to go in a new direction.
• We heard that the FCA is going to make a further break with EU rules and allow anonymity for short sellers betting on a drop in a UK company’s share price. At the moment, EU rules mandate that all short positions above 0.5% of a company’s share capital be disclosed publicly but it looks like the FCA wants to move away from this and use a US-style lighter touch, allowing short-sellers anonymity. This is all part of trying to revive the appeal of the LSE.

IN COMMODITIES NEWS…

IN RARE EARTHS – the European Initiative for Energy Security called for the EU to invest in the critical minerals sector following China’s recent restriction of key material exports. At the moment, EU policymakers are trying to develop stockpiling strategies but it has limited mining and refining capacity.

IN OIL – Trump’s pre-election call to “drill, baby, drill” just isn’t happening because since he came to office, oil production has fallen, not risen! American shale companies are now facing low oil prices, a global oversupply and rising costs because of Trump’s trade tariffs. This means that there is now zero incentive for US shale oil companies to expand. Russia’s Lukoil unveiled plans to sell its international assets following the “introduction of restrictive measures against the company and its subsidiaries by some states”, in a clear reaction to America’s new sanctions. Lukoil is a private company and it will have to sell its international assets by November 21st otherwise it’ll get caught up in sanctions.

IN GOLD – the price fell below $4,000 as some said that that the commodity is entering a “correction” phase. However, it seems to me that the drivers of the gold price have not gone away – there’s still high government debt, geopolitical instability and nervous investor sentiment – so I wouldn’t be surprised to see it get back on track again.

IN COPPER – prices hit record highs this week due to the cumulative effect of Trump’s tariffs, disruption at big mines and a slew of disappointing forecasts from big producers which have heightened fears of a supply shortage. Demand is expected to rise, so the situation’s not likely to change anytime soon…

IN COCOA – companies using chocolate in their products have had to get creative with their recipes to maintain the taste but not use as much cocoa, the price of which has been high for a while now. That being said, chocolate makers are hopeful that 2026 will be a better year as next year’s crop is looking good so far. Prices are still high versus historical levels but at least they are now down from their peak.

IN ENERGY…

• IN NUCLEAR – the US government and Westinghouse struck a major $80bn deal to build a fleet of nuclear reactors funded by a trade agreement with Japan. The costs involved are considerably lower than the prices we’re seeing with Sizewell C at the moment, but then again it’s possible that they will ratchet up over time!
• IN WIND – the UK government is cutting down the predicted efficiency of wind turbines by over 25%, which is going to make Ed Miliband’s net zero plans look very shaky. The pressure’s piling on to delay net zero targets or lean more on fossil fuels!
• IN CRYPTO NEWS – the FCA’s decision to allow the sale of crypto funds to retail investors has prompted a stampede from providers to offer products at knock-down prices to get the business. British crypto company KR1 announced ambitions to transition from the small cap Aquis exchange to the LSE’s main market in a push to broaden its appeal to institutional investors. Elsewhere, Coinbase saw its Q3 sales rise thanks to an increase in trading volumes. Revenues came in above market expectations.

IN INVESTMENT NEWS…

• It turns out that many of OpenAI’s recent $1.5tn-worth of deals have been done without the involvement of outside bankers and lawyers, instead opting to rely on in-house execs to get them done. Meanwhile, the recent structural overhaul will enable the all-powerful Sam Altman to raise cash from pretty much whoever he wants. By straddling both the for-profit and non-profit arms of the company, he will have a free hand in picking which models host his AI models and developing new products and devices.
• Big Tech companies including Google, Meta and Microsoft have just been throwing money at AI infrastructure over the last quarter and Zuckerberg in particular is going all in. We’ll just have to wait to see whether it will all be worth it!
• Nvidia announced that it would invest $1bn in Nokia as the two companies committed to work together on incorporating AI into telecoms networks. They will also collaborate on data centre infrastructure.
• IN M&A – Nelson Peltz offered to buy London-based money manager Janus Henderson via his Trian group, which already owns about 20% of Janus Henderson. Janus Henderson will now weigh up the offer.
• IN IPOs – Shawbrook had a solid IPO this week on the LSE, setting the stage for the next “big” listing – that of Princes Group. Meanwhile, OpenAI is thought to be getting ready for a $1tn stock market flotation, the passage of which has been smoothed by successful talks between Sam Altman and the Californian Attorney General.

IN TECH NEWS…

• Apple hit a $4tn valuation thanks to strong demand for its latest phone – and it reckons that there’s more to come this quarter!
• Amazon reported its strongest quarterly growth in almost three years thanks to a particularly strong performance from AWS but it also announced that it would cut 14,000 corporate jobs as it stated the need to be “organised more leanly”.
• IN CHIP NEWS – Nvidia became the first company in the world to hit a $5bn valuation, the equivalent of Germany’s annual GDP! It also announced a new interconnect product, called NVQLink, that links quantum processors to the AI supercomputers they need to operate effectively. Nvidia supplier SK Hynix announced that it had already sold next year’s production of chips while Samsung also put in a strong Q3 performance thanks to the AI boom driving chip demand. This is especially welcome for Samsung because it’s just come out of a period of four consecutive quarters of decline. Elsewhere, Qualcomm launched a new AI chip to rival Nvidia, sending its share price up strongly. Saudi Arabia’s Humain, the AI company backed by the kingdom’s PIF sovereign wealth fund, is going to be Qualcomm’s first customer.
• IN AI NEWS – OpenAI’s restructuring into a for-profit and non-profit entity helped to power Microsoft’s valuation above $4tn because Microsoft owns a hefty chunk of OpenAI. California-based Character.ai has become the first large AI company to ban under-18s from talking to chatbots on its platform. It said that it would phase access out completely by November 25th.There are increasing calls for something to be done about teen access to limit the incidence of self-harm and suicide.
• IN DATA CENTRES – there was another example of a tech company bringing its own power as Google announced a partnership with NextEra Energy to reopen the Duane Arnold Energy Centre, a nuclear power plant that closed five years ago, to power its data centre in Iowa.
• IN SOCIAL MEDIA – Grindr got an offer by existing shareholders to take it private, Reddit saw strong revenues for Q3 thanks to higher advertising revenues (this was in stark contrast to veteran agency WPP that had seen ad revenues fall) and it looks like a final deal on TikTok is nearing, but we’re not quite there just yet!

IN MEDIA NEWS…

• Universal Music agreed a deal with AI music generator Udio about the use of its songs. Udio will launch a new platform that’s trained on licensed songs and subscribers to the platform will be able to use them to create remixes and customised tracks.
• Virgin Media O2 announced a partnership with Starlink in what is the first deal of its kind that will enable customers to automatically connect phones via satellites where there is no standard mobile signal. The new service is due to launch in the first half of next year and will be called O2 Satellite.

IN EMPLOYMENT TRENDS…

• UK job vacancies dropped to their lowest level this year, according to data from Adzuna. Employers are just battening down the hatches in expectation of a Budget nightmare.
• Ministers are going to meet up next week to see what they can do to end the illegal gig economy where illegal immigrants have been able to work for delivery companies (and other gig companies) because they’ve been classed as self-employed contractors, and therefore not been subject to stringent work eligibility checks.

IN CONSUMER TRENDS…

• IN THE US – despite recent signs that consumers are in difficulties at the moment, the latest figures from Visa say otherwise! Visa’s revenue increased in the latest quarter thanks to decent consumer spending, which drove payment volumes higher. Both discretionary and non-discretionary spending rose in the US while e-commerce spending also increased while travel spending rose to pre-Covid levels. Consumer spending increased at the fastest rate for Visa’s highest-earning customers.
• IN THE UK – consumers are really noticing price rises in their grocery shop and shrinkflation is continuing. Private rent is now so expensive that it’s taking up 44% of the average monthly wage and there was an interesting article in the FT saying that even if the government hits its target of building 1.5m new hopes this parliament, it’s not a given that people are going to want to buy them because of affordability issues.

IN RETAIL NEWS…

• Next has done it again – it’s going to upgrade its full-year profit forecasts in anticipation of a decent Christmas quarter! This will be the fourth time the company has increased its forecasts in eight months!

IN CONSUMER GOODS NEWS…

• Crocs had a lacklustre Q3 but it says it’s positioning itself for subsequent growth. It’s cut promotions and inventory, will launch new products and spend more on marketing.
• Puma announced that it would be cutting 900 jobs as the company engages in efforts to close the gap with Nike and Adidas. This is in addition to the 500 jobs cuts it already made this year.

IN LEISURE NEWS…

• Chipotle cut its sales forecasts for the third time this year thanks to rising costs pushing budget-conscious customers away. Consumers continues to cut down their spending on dining out.
• Turnaround efforts at Starbucks are starting to come through as sales for the latest quarter were flat, which is good news after six consecutive weaker quarters.

IN AUTOMOTIVE TRENDS…

• The US looks like it will lose more ground to China as it continues to de-emphasise EV development. According to research by US Clean Investment Monitor, EV-related investments fell by almost a third over the quarter versus the same time period a year ago.
• GM announced that it would be laying off over 3,300 EV workers in the US as it de-emphasises the importance of EVs in its business mix.

IN TRAD CAR NEWS…

• Mercedes-Benz saw its profits fall thanks to a combination of restructuring costs, sluggish China demand, US tariffs and the potential impact of car finance mis-selling in the UK. That being said, it did keep its full year forecasts unchanged, presumably because it lumped all the bad stuff into this quarter.
• Aston Martin saw its losses balloon by 800% as it felt the full force of Trump’s tariffs and weaker demand in China.
• VW warned of a €5bn tariff hit thanks to higher costs and falling US sales. Rivals have managed to minimise the potential US tariff cost impact by taking steps to expand production in the US but VW reckons that it’ll continue to feel repercussions from these tariffs despite a trade deal between the US and EU.
• Nissan said it would pool its carbon emissions with BYD to avoid EU penalties in a deal reminiscent of Tesla in the old days…

IN EV NEWS…

• BYD saw its profits fall by 33% thanks to weak domestic demand. This highlights the need for the company to push hard in overseas markets!
• Tesla had to recall thousands of Cybertrucks because their headlights had been falling off! Separately, Tesla’s chairwoman urged shareholders to support the suggested $1tn pay package for Musk in order to retain his services.
• EU carmakers are getting increasingly concerned about what’s happening at Nexperia and want clarity. Makers are currently eating into stockpiles of chips, but that’s not going to last forever and could end up halting production if nothing’s done.

• The FDA said that it will accelerate approvals for generic versions of complex biological medicines. Crudely speaking, the FDA has the power to approve drugs. This could be very damaging to pharma companies who rely on getting exclusivity to make money as that window looks like its going to get smaller…
• Novartis agreed to buy rare disease-focused biotech Avidity Biosciences for a 46% premium to the company’s closing price on Friday. At $12bn, it is the company’s biggest acquisition in over ten years!
• A bidding war is breaking out as Novo Nordisk butted in to Pfizer’s attempt to buy US biotech Metsera for $7.5bn. Metsera had already agreed to the Pfizer deal but likes what it’s hearing from Novo Nordisk. It makes a treatment that helps prevent patients getting “Ozempic face”.

My fave video this week was the one that I wish was true and not AI-generated! Do you think it’s AI-generated??

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 started the week by bullying president Zelenskyy into ceding to Russia’s demands, but Trump and Putin cancelled the suggested meeting in Budapest to talk peace. In the meantime, European countries tried to support Zelenskyy by talking about using frozen Russian assets to finance its defence but Belgium objected because it didn’t want to be left carrying the can if Russia came after the assets. Russia launched massive missile and drone strikes on Kyiv and other Ukrainian cities.

IN DEFENCE NEWS…

• Trump signalled his strong backing for the Aukus agreement that was originally made by Biden with the UK and Australia.

IN TRUMP THINGS…

• Huge crowds gathered in anti-Trump “No Kings” protests across the US. Trump dismissed them and House Speaker Mike Johnson branded them as a “Hate America rally”.
• Trump pardoned the founder of Binance, Changpeng Zhao, who had been handed a very short prison sentence in 2023 for failing to stop money laundering. It’ll certainly be useful for Trump to have a major crypto bro indebted to him. Will Sam Bankman-Fried be next, I wonder??

IN INDIVIDUAL COUNTRY NEWS…

• IN CHINA – the economy expanded at its slowest pace in a year at 4.8% on an annualised basis in Q3 versus a 5.2% increase in Q2. The official year-end GDP target is “about 5%” so it’s still in the ballpark. Ongoing gloom in the real estate sector continues to be a drag on consumer sentiment. This certainly gives China’s leaders food for thought for their next five year plan for 2026-2030.
• IN JAPAN – Sanae Takaichi became Japan’s first ever female prime minister. She then appointed a cabinet that contained the country’s first female finance minister and three of the four ministers who had run against her in her party’s leadership election earlier this month. Good luck to her!
• IN FRANCE – there was more scandal this week as some jewellery was taken from the Louvre in a daring heist. No-one was found and it wasn’t insured!
• IN THE UK – inflation was expected to hit a two-year high but, in fact, it stuck at 3.8% for the third month in a row. This is quite handy for the chancellor because it makes it a bit more likely that the Bank of England will cut interest rates earlier than expected and we also heard that the UK’s borrowing costs, as measured by the yield on 10-year bonds, have fallen to an 11-month low. Talking of the chancellor, Reeves promised to launch a “blitz on business bureaucracy” that could save firms £6bn but she created a kerfuffle by floating the idea of taking away the NIC exemptions that apply to Limited Liability Partnerships (LLPs) to raise money in next month’s Budget. Lawyers and accountants were particularly disgruntled by the prospect. Betfred also got defensive as it responded to the prospect of the gambling industry being targeted by a gambling tax. Speculation about what the Budget continued as energy secretary Ed Miliband floated the idea of cutting VAT from household energy bills.

IN COMMODITIES NEWS…

• IN OIL NEWS – Trump created a bit of a stir by imposing sanctions on the two biggest oil companies in Russia – Rosneft and Lukoil – in an effort to “degrade” Putin’s ability to finance his war machine. This is the first time that the administration has implemented such measures and it prompted big buyers of Russian crude – China and India – to dial down their orders because they don’t want to get hit by secondary sanctions. The oil price jumped as a result and the FTSE100 hit a new high.
• IN RARE EARTHS – China reigns supreme in rare earths and the US and China continue to battle it out as the US scrambles to support non-Chinese producers. Australian companies, including Arafura rare earths are benefiting and the Trump administration this week signed an agreement at the White House with Aussie PM Anthony Albanese for the US and Australia to invest around $1bn in the next few months to create a rare earth and critical mineral supply chain that doesn’t involve China.
• IN OTHER COMMODITIES – prolonged high cocoa prices have prompted companies like McVitie’s to change their recipes to contain less cocoa. They’ve had to reduce quantities so much that Club and Penguin biscuits can’t be called “chocolate biscuits” any more – they are now “chocolate flavour” biscuits because they now contain more palm oil and shea oil than cocoa!

IN ENERGY NEWS…

• IN BATTERIES – Tesla continues to dominate the mega battery market in the UK. It currently supplies large-scale batteries to plant developers but also trades the power they generate using its Autobidder trading software. I think that this is an industry that is only going to grow from here…
• IN NUCLEAR – the US is offering energy companies access to nuclear waste from cold war-era warheads that can be converted into fuel for advanced reactors as an alternative to sourcing nuclear material from Russia. This just goes to show how keen everyone is to change supply chains away from Russia (and China).
• IN WIND – BP has decided to ditch plans for a major US offshore wind farm, blaming the White House’s aversion to wind power. I would have thought that, as long as Trump’s administration is in power, US is a no-go for wind. This also plays into BP’s agenda on bringing the focus back onto fossil fuels.

IN CRYPTO NEWS…

• BlackRock launched its first bitcoin ETF in Britain. Investors will, via this product, be able to get exposure to bitcoin without actually having to buy it.
• The FCA has filed a lawsuit against HTX, the crypto exchange linked to expensive-banana-eater Justin Sun, in the High Court. It is bringing the case “for unlawfully promoting cryptoasset services to UK consumers in breach of the UK’s financial promotions regime”. It will be the first time that the FCA has taken action against a crypto company.

IN INVESTMENT NEWS…

• Pension giants are putting £3bn into UK private markets. Legal & General, NEST and Australian Super (Australia’s biggest pension fund) have announced separate commitments to invest £3bn in rental homes, infrastructure and fast-growing companies.
• IN M&A – Blackstone and TPG announced that they are taking over healthcare tech firm Hologic in a deal worth $18.3bn. Hologic sells diagnostic services that test for diseases including breast cancer.
• IN IPO NEWS – Shawbrook is looking at a potential valuation of £2bn when it floats on the LSE. Final pricing will be announced on October 30th and the company will use the money raised to buy out competitors. Meanwhile, tinned tuna company Princes Group has set a modest target valuation for its imminent IPO.
• IN MEME STOCKS NEWS – Beyond Meat shares boomed by 1,300% in under a week thanks to being the latest meme-stock that investors are ploughing into. It has become the most traded stock on Wall Street following interest from traders on “wallstreetbets”, a Reddit forum. Here we go again!

IN FINANCIALS NEWS…

• IN BANKS – Lloyds Banking Group saw its profits fall by 36% as its exposure to the car financing scandal hit took a big bite out of its quarterly earnings.
• IN PRIVATE CREDIT – concerns continue to build re private credit, particularly as banks have become more exposed to this area of financing. We’ve been hearing more warnings from bank heads and central finance chiefs about it and if things start to crack, there could be some serious implications on global markets and economies.

IN CONSUMER TRENDS…

• IN THE US – higher tariffs are leading to empty shelves and higher prices for ordinary Americans and a study conducted by S&P Global estimated that two-thirds of higher costs to corporates will be passed on to consumers. Separately, research from VantageScore shows that the share of US car loan borrowers falling behind on their debt has jumped to levels last seen during the financial crisis. This is serious because Americans rely heavily on their cars and so it’s the last thing they would want to default on.
• IN THE UK – inflation stuck at 3.8%, which surprised the markets and provided a potentially useful bit of good news for the chancellor in that it means it’s more likely that interest rates may get cut a bit earlier than expected (cuts help sentiment). On the downside, UK borrowing hit a five-year high for September, consumers continue to be nervous about the Budget – and that’s contributing to more profit warnings as well as the lack of the usual housing market bounce at this time of year, while stubbornly high prices of butter, milk, beef, chocolate and coffee put pressure on household budgets making dining out more difficult to afford which could be contributing to sluggish wage growth in the retail and hospitality sectors. Having said all that, the latest study from GfK reflects a rise in consumer confidence ahead of Black Friday. Reeves looks likely to blame Brexit for tax rises in the upcoming Budget and there are rumours that she’s going to target LLPs, which currently get NIC exemptions for partners. Given that the top 1% of UK taxpayers pay 33% of all the tax collected by the government, she’s going to have to tread carefully and, given all this concern by the more affluent, it’s perhaps unsurprising to hear that the likes of St James’s Place, Schroders and AJ Bell are seeing big fund inflows.
• IN CONSTRUCTION/PROPERTY – Housing Secretary Steve Reed and London mayor Sadiq Khan made a joint statement this week outlining looser new planning rules to help housebuilding in London and it seems that the FCA’s loosened borrowing conditions are showing real signs of making it easier for first-time buyers to get a foot on the housing ladder.

IN RETAIL NEWS…

• IN LUXURY – Kering’s new CEO has committed to focus on fashion, selling its beauty business to L’Oréal for €4bn. The company also announced Q3 results which showed that the revenue decline is slowing down after a tricky two years. It feels like luxury is staging a bit of a turnaround at the moment…
• At the other end of the scale, B&M kicked out its finance chief because of a £7m accounting error. The announcement came at the same time as the company announced its second profit warning in two weeks! All of this has hit its full-year projections and investors gave the share price another good kicking…

IN CONSUMER GOODS NEWS…

• Mattel announced an OK Q3 but the company has got enough confidence in how things will go in Q4 that it kept its full year numbers unchanged.
• Fresh from announcing the €4bn Kering deal, L’Oréal’s CEO made cautiously positive noises about the all-important Chinese market staging a turnaround. This is good news given how important the market is.
• Adidas raised its annual profit targets thanks to strong demand for its retro trainers and a smaller-than-expected impact from US tariffs.
• Oatly continues to suffer as it has found it hard to sustain its stellar growth rates as consumers have favoured products that are high in protein rather over those that have a lower environmental impact. Its share price has collapsed by 97% since it floated to great fanfare back in 2021!
• SlimFast’s European arm was sold to Manchester-based consumer  company Supreme. SlimFast has, unsurprisingly, suffered from the success of weight-loss jabs.
• Heineken saw its sales hit by falling global demand for beer and it downgraded its sales forecasts.

IN LEISURE NEWS…

• DC London Pie, which owned the UK Pizza Hut franchise, appointed the administrators at the beginning of the week and Yum! Brands, which owns the global franchise, bought out the UK restaurant operation in a pre-pack administration deal. 64 sites and 1,277 jobs will be saved but 68 other sites and 1,200 jobs won’t. It’ll be interesting to see what the new owners have planned.

IN TECH NEWS…

• Apple’s latest iPhone iteration has prompted the company’s strongest growth in smartphone sales since the pandemic, pushing its share price to record highs but it lost the landmark class action lawsuit in the UK which could potentially lead to a £1.5bn compensation payout, equating to about £75 per customer. A London court ruled that Apple had abused its dominant position in the market by charging excessively high commissions on its App Store.
• The Competition and Markets Authority is going to apply stricter rules on Apple and Google regarding how they run their mobile platforms because they have been designated as having “strategic market status” (SMS) under new digital laws that came into force this year.
• Amazon had a major services outage which affected over 2,000 companies around the world. It came back up but it highlighted just how much so many companies rely on so few service providers.
• European defence companies Airbus, Thales and Leonardo confirmed this week that they would merge their struggling satellite divisions in an effort to take on Elon Musk’s Starlink in an initiative called “Project Bromo”. They’ve got a mountain to climb but good luck to ’em!
• Scientists have invented an eye implant to help blind patients see again. Science Corporation is the US company that makes the device and it has applied for clinical use authorisation for the product in the US and Europe.
• IN AI – OpenAI launched its own web browser called Atlas, taking on the giants in this area – Google and Microsoft – while Anthropic announced that its chatbot, Claude, is being tailored towards the needs of researchers and life sciences companies by integrating it with tools that the scientists already use. Anthropic said that Novo Nordisk has already used its AI model to reduce clinical study documentation from over 10 weeks to just 10 minutes! Reddit is suing Perplexity for scraping its data, criminal usage of AI to commit fraud is rising and it turns out that unicorn AI start-up Synthesia has fended off a $3bn takeover bid from Adobe.
• IN QUANTUM – the Trump administration is getting increasingly interested in taking equity stakes in a number of quantum computing companies like IonQ, Rigetti Computing and D-Wave Quantum as it wants to stay on the cutting edge. Google claimed this week that it had made a breakthrough with an algorithm that it believes could open up new techniques in drug discovery and the development of new materials. Google said that this demonstrates “quantum advantage”, the point at which quantum systems clearly outperform traditional computers.
• IN CHIPS – Anthropic and Google Cloud struck a massive AI chips deal, but didn’t reveal how massive! It involves Anthropic securing access to 1m Google Cloud chips to train and run its AI models. Meanwhile, Intel announced that it had put in a decent Q3 performance, showing that the company’s turnaround efforts seem to be taking effect. Intel is a specialist in CPUs rather than GPUs – and it’s the GPUs that are getting all the love at the moment because these are the ones that power AI training and have powered the likes of Nvidia to heady heights. This is why Intel has got left behind. However, it is thought that once more AI models get trained up, AI companies will need to buy a lot more CPUs – which should benefit Intel.
• IN DATA CENTRES – data centre start-up Crusoe has managed to more than triple its valuation to over $10bn in one year after its latest funding round, where it attracted $1.4bn. Crusoe is building OpenAI’s first big data centre in the US. The frenzy continues…

IN MEDIA NEWS…

• Warner Bros Discovery said that it has been on the receiving end of takeover bids, so it’s thinking about what to do next. Netflix has been rumoured to be a potential bidder…
• Talking of Netflix, the streamer saw share price weakness despite revenues rising by 17.2% year-on-year in Q3 because a dispute with Brazilian tax authorities took the edge off its profits. Revenues rose thanks to a combination of membership growth, higher pricing and an improved performance in advertising.

IN TRAD CAR NEWS…

• GM lifted its financial forecasts for the full year whilst cutting its previous estimates on tariff impact. This is good, but it still sounds like US consumers are facing a delayed inflationary impact so we’ll have to see how that translates into car sales…
• Ford outperformed market expectations thanks to Americans spending more on its pickups and SUVs over Q3. It is now set to benefit from tariff relief on imported parts and a “meaningful reduction” in federal emissions regulations that mean it’ll be able to sell more trucks and SUVs.
• UK car production fell by 36% thanks to the JLR cyber attack, according to the latest stats from the SMMT.
• Volvo and VW are voicing concerns about the repercussions of the tussle between China and the Netherlands over control of chipmaker Nexperia. The car manufacturers have warned that there could be temporary plant shutdowns in Europe as a result.

IN EV NEWS…

• Tesla profits fell by over 25% as it took a hit on increased costs from US tariffs, the loss of emissions credit revenue and the costs involved in its pivot to robotics and AI.
• Rivian laid off about 4.5% of the workforce in an effort to cut costs ahead of an expected drop in EV sales. This was in addition to previous layoffs.

• IN PHARMACEUTICALS – GSK’s new blood cancer drug got approval by the FDA. The company reckons that Blenrep could rake in at least £3bn in peak year sales.

My fave video this week was the one that made me feel nostalgic for my early days learning Japanese!

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…

• Hamas and Israel released prisoners as part of Trump’s peace deal. There’s a lot more to do though! At least it is a step in the right direction…
• Trump said he’d meet president Zelenskyy in Washington with a view to talking about how to get Putin to the negotiating table.
• Trump said he’s going to set up a meeting with Putin within the next few weeks in Budapest regarding the cessation of hostilities in Ukraine.

IN TRADE NEWS…

• The Dutch government took control of the Chinese-owned, Netherlands-based semiconductor maker Nexperia using the Goods Availability Act for the first time because it felt that there was “a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities”. It’s possible that this could prompt the unwinding of other deals involving Chinese assets in key areas…

IN TARIFF NEWS…

• Trump really stirred things up last week by suddenly announcing 100% tariffs on imports from China in response to China restricting rare earth exports. Markets took fright immediately, but they recovered when Trump took a softer tone in a classic TACO move. Treasury secretary Scott Bessent then warned the Chinese that the world would “decouple” from China if it insisted on maintaining its export restrictions on rare earths but let’s face it, Trump has been trying to decouple the world from China for years 🤣.
• It sounds like the situation between India and the US may be improving after Trump’s imposition of an additional 25% tariff on the existing 25% “reciprocal tariff” caused a kerfuffle. Modi promised that India would stop buying oil from Russia, although he admitted that this couldn’t happen overnight. It’s this buying of oil from Russia that irked Trump enough to slap on that extra tariff…
• There’s more evidence that Trump’s tariffs are having the desired effect as Ikea is planning to increase US production in order to avoid tariffs of between 10% and 50% on wood products, which came in this week.

IN TRUMP THINGS…

• The president threatened to withdraw a sorely needed $20bn aid package for Argentina if president Javier Milei doesn’t do well at the forthcoming midterm elections.
• Trump withdrew visas of individuals who “celebrated” Charlie Kirk’s death. He also got the DoJ to indict former national security adviser John Bolton for his alleged mishandling of classified documents and it turns out that Harvard Uni announced its first operating loss since the pandemic as the White House continues to exert pressure on it. The offensive against dissenters continues…
• Federal workers are still in the dark about whether they’ve still got jobs as the administration seems to be using the current shutdown as an opportunity to downsize departments quite dramatically.

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – finance leaders gathered in Washington DC to attend meetings at the IMF and the World Bank. The situation in the US has improved since the last time when the world was reeling from Trump’s liberation day tariffs but since then the US markets are hitting new highs, AI is booming and a tariff-induced recession hasn’t happened. Even Fed chief Jay Powell is now hinting that there could be more interest rates to come.
• IN JAPAN – the 26-year coalition between the ruling LDP party and Komeito collapsed on Friday, meaning that the LDP has been left scrambling for alternative partners, the most likely of which is the Japan Innovation Party. This means that the LDP’s recently-elected leader, Sanae Takaichi, is not nailed on to be PM just yet.
• IN EUROPE – German chancellor Friedrich Merz called for a single unified European stock exchange “so that successful companies such as biotech firms from Germany do not have to go to the New York Stock Exchange” and under-fire French PM Sébastien Lecornu managed to survive two votes of no confidence after his climbdown on Macron’s pension reforms – meaning that there is now a faint glimmer of hope for a 2026 budget to be passed within this year.
• IN THE UK – senior economists and politicians are warning that China’s ownership of a lot of Britain’s debt (in the form of bonds) is giving the country the power to poke around in British affairs and control the UK government to some extent (something that’s been brought up a lot in the whole China-spying-on-the-UK thing) and the IMF warned that the UK faces the highest inflation in the G7 this year and next according to their latest estimates. The latest numbers from the ONS showed that UK GDP is pretty much going sideways at the moment as everyone frets about the November Budget while the Institute for Fiscal Studies think-tank reckons that chancellor Reeves is going to have to find £22bn in next month’s Budget, adding to the existing pressure on her and the government. There’s lots of speculation as to what’s going to be in it – like the overhaul of cash ISAs and the targeting of the assets of the affluent.

IN COMMODITIES NEWS…

• IN RARE EARTHS – it turns out that the Pentagon has been increasing rare earth stockpiles, according to public filings by the Pentagon Defense Logistics Agency. Meanwhile it looks like GM’s gamble back in 2021 to invest in rare earth magnet production in the US is turning up trumps in the current climate.
• IN OIL – crude prices fell to their lowest point in five months due to a surplus of supply and, closer to home, Equinor has resubmitted plans to drill in Britain’s biggest untapped oil field at Rosebank. Energy Secretary Ed Miliband now has the power to give permission for the project to go forward or not.

IN ENERGY NEWS…

• Battery storage tech continues to advance. This will really help to smooth out volatile supply from renewables and global capacity is expected to rise tenfold by 2035 and more countries are announcing plans to increase development – including the UK. Technological advances are being made, raw material costs are falling and the batteries themselves are becoming more efficient.

IN CRYPTO NEWS…

• There were claims of insider dealing as an anonymous investor made up to $200m on shorting bitcoin and ether about 30 minutes before Trump’s 100% tariffs announcement was made. After Trump’s threat was made, the crypto market lost $400bn of its value in less than 24 hours.
• Trump companies are thought to have made $1bn from crypto so far thanks to his interests memecoins, stakes in World Liberty Financial and TMTG in addition to trading cards and other interests. He is doing very handsomely himself from pushing crypto forward…

IN BUSINESS TRENDS…

• Immigration lawyers in the US and UK are doing a roaring trade thanks to advising both individuals and companies about the immigration status of families and employees. It certainly looks like the H1-B visa thing is going to be another money spinner for law firms that advise on this area!
• The world’s biggest owner of industrial real estate, Prologis, was confident enough to raise its full year earnings forecasts after putting in a decent Q3 performance as it looks like demand is turning a corner after a sluggish few years.

IN INVESTMENT TRENDS…

• IN IPO NEWS – European IPO markets look like they are waking up again, the most recent example of which was Verisure’s IPO last week. There have been a few others in the last few weeks and there’s more in the pipeline! London is also due to see a bit of IPO action soon with the flotations of tinned food company Princes Group and specialist UK lender Shawbrook but we’re still miles behind New York. Meanwhile, it’s shaping up to be a big month for India as it had two big IPOs this week with more to to come! This is particularly impressive when you consider things are still red-hot despite Trump imposing 50% tariffs (so imagine what will happen when/if he lifts them!)!
• IN M&A NEWS – Following on from last week, HSBC has gone ahead with taking Hang Seng Bank private. We’ll have to wait and see whether it got the timing right as Hang Seng Bank has been hurting because of its exposure to the particularly tricky real estate market.

IN BANKS NEWS…

There were a lot of bank results this week!

• Figures from Bloomberg predict that Q3 investment banking revenues will hit heights not seen since 2021 as dealmaking in the US continues to gather momentum. Banks did voice concern about a market bubble but it does look like things are going their way what with the likelihood of more interest rate cuts and a lighter-touch regulatory environment that makes deal-making more attractive!
• JP Morgan put in a decent quarterly performance and showed its confidence in the US economy by announcing that it would invest up to $10bn in areas that are key to US security, in a sign that big businesses are putting money into Trump’s “America First” policies.
• Goldman Sachs also had a strong quarter but announced that it would be making layoffs in the coming weeks. Separately, it announced that it would buy venture capital platform Industry Ventures in cash and equity. The deal, which is thought to be worth up to $965m, is expected to close in Q1 of 2026, pending regulatory approval.
• Morgan Stanley beat all its rivals thanks to a major boost in investment banking fees over Q3, although performances were strong across the board!
• A new bank, called Erebor Bank, has been granted conditional approval by regulators. It is going to focus on lending to businesses in the fields of AI, crypto, defence and manufacturing and is backed by Silicon Valley entrepreneurs including the co-founder of Palantir Technologies and the Peter Thiel-owned VC firm Founders Fund.
• Meanwhile, US investment bank Jefferies is trying to shake off its association with collapsed car parts maker First Brands Group, in which it had a stake. This has called into question the whole private credit market – but for the moment it looks like the fallout has been contained.
• Spain’s BBVA failed in its hostile takeover bid for fellow Spanish bank Sabadell after it failed to convince the latter’s shareholders of the value of the deal.
• In the UK, the latest Bank of England quarterly survey showed the first drop in mortgage defaults since 2022, suggesting that financial pressures on homeowners are easing off but we’ve still got the November Budget to get through yet…meanwhile, Close Brothers decided to almost double the amount of money’s it’s already put aside to compensate customers affected by the car finance mis-selling scandal.

IN EMPLOYMENT TRENDS…

• UK employers cut graduate hiring for the second year in a row, according to the latest survey results from the Institute of Student Employers (ISE). On slightly more positive note, the ISE’s joint chief exec said that fears about AI taking over the jobs of young professionals have been overdone.
• The latest ONS figures showed that the UK labour market is currently “stabilising” because the number of jobs is no longer falling. Unemployment is now back to pandemic levels of 4.8% but younger people are being hit the hardest.

IN CONSUMER TRENDS…

• Chinese consumer prices fell according to the latest numbers, highlighting ongoing sluggishness in the Chinese economy and the ongoing reluctance by Chinese consumers to spend.
• The latest stats show that UK consumers have reined in their spending more than any other G7 countries since the pandemic thanks to consistently high interest rates and the fear of economic headwinds. Ongoing consumer caution was confirmed by a report from the BRC which shows that retail sales growth lost momentum last month as consumers fretted about their post-Budget finances. Consumers look likely to face more challenges as UK energy bosses warn of rising utility bills because they expect investment costs to outweigh any falls in wholesale prices.
• SpareRoom published a report which showed that the average room in a house share in London now costs £995 per month which means that tenants have to earn at least £40,000 a year for it to be affordable (which it is deemed to be if it accounts for 30% or less of a worker’s income). Staying with the rental market, a report by Hamptons the estate agents, showed that millennials (those born between 1981 and 1996) currently make up 50% of all new buy-to-let investors. This shows a generational shift in landlords as five years ago millennials made up 40% of buy-to-let shareholders. I guess there need to be a lot more of them, though, to get rents to more affordable levels!

IN RETAIL NEWS…

• LVMH shares shot up by 13% on news that it returned to growth in Q3, bucking two consecutive quarters of decline. Rivals saw their share prices rise as well as investors bet that the luxury downturn is over.
• Shein saw profits fall despite revenues rising because of higher costs related to Trump’s tariffs.
• In the UK, Tesco increased its market share while Asda’s shrank according to data from Worldpanel. This is not good news for Asda as we head into the crucial Christmas/New Year period.

IN AI-RELATED NEWS…

• It looks very much like Sam Altman is trying to create an “everything app” what with all the deals and new features he’s been rolling out recently (like Sora 2 and “Instant Checkout”) along with more app integrations with Spotify for music and Zillow for real estate (Zillow is America’s equivalent to Rightmove). This could get interesting with Elon Musk pursuing the same goal as well…
• Talking of OpenAI, there are concerns about how all the deals it’s announcing at the moment are going to be financed but it has announced a five-year business plan about how it’s going to do this.
• Elon Musk’s xAI is making progress on building “world models”, which train on videos and data from robots to understand the real world. These models could be used in games where they could generate interactive 3D environments which would have all sorts of uses.

IN DATA CENTRE NEWS…

• A consortium led by BlackRock has agreed to buy Aligned Data Centers from Macquarie Asset Management in a deal worth about $20bn. It is one of the biggest data centre deals ever made! It’s expected to complete in the first half of 2026 as long as it gets regulatory approval.
• There was a really interesting article in the WSJ that highlighted the rising trend of tech companies making arrangements to power their own data centres because of supply chain delays and permit challenges. When you consider that one data centre can eat up as much electricity as 1,000 Walmart stores and that an AI search can use up to 10x the amount of energy as a Google search, you can understand the sense of urgency that AI companies are feeling.

IN CHIP NEWS…

• OpenAI announced yet another deal this week, this time with Broadcom where it has committed to buy a shedload of computer chips from the US semiconductor giant! This could add an extra $350bn – $500bn on top of the $1tn it’s already spent on chip and data centre deals over the last few months!
• Samsung said it was on track to make its highest profit in three years – great news after several quarters of sluggish growth.
• TSMC posted its highest quarterly profit and raised its sales outlook for the full year thanks to “very strong” AI demand.

IN AI FUNCTIONALITY NEWS…

• Shopping seems to be a growing area of interest in AI as more people are using it and now you can buy things from within ChatGPT itself. Retailers are now shifting away from SEO towards GEO to optimise their presence in chatbots. Walmart reckons that this is the future of retailing and is partnering up with ChatGPT.

IN HACKING NEWS…

• UK security services, including MI5, are increasing their work with some of the UK’s biggest companies to gauge current and future resilience to cyber attacks. In the near future, the government is going to update the 2018 Network and Information Systems Regulations that will force regulated companies to report cyber attacks to the NCSC within 24 hours and make organisations tighten up cyber security in their own supply chains.

IN TRAD CAR NEWS…

• Western execs visiting China are coming back worried as, for instance, Ford CEO said ““Their cost and the quality of their vehicles is far superior to what I see in the West”. Other manufacturing company execs have come back saying similar things, marvelling at the sheer level of automation.
• Stellantis announced a 50% increase in American production by the end of the decade, pouring $13bn in. Trump wins!
• Ford has had to cut production of a number of different vehicles thanks to the fire last week at supplier Novelis.

IN EV/HYBRID NEWS…

• Political leaders in Canada, the UK and the EU are all walking back their commitment to EVs as consumers aren’t adopting them as quickly as had been expected and now GM is the latest car maker to react to the drop in sales prompted by the withdrawal of the EV tax credit and lower EV take-up overall by scaling back production, taking a hefty $1.6bn charge in the process.
• A report published by the non-profit advocacy group Transport and Environment said that Plug-in Hybrid Electric Vehicles (PHEVs) actually emit almost five times the amount of CO2 than official figures state – and that they emit just 19% less than petrol or diesel cars. Although this smacks a bit of dieselgate, I guess it all depends on your perspective and whether you concentrate on the much higher CO2 emission levels stated or whether you’re still OK with them emitting 19% less than petrol or diesel cars…

• IN PHARMACEUTICALS – Trump struck a deal with EMD Serono that will cut the price of IVF treatment by a whopping 73%. EMD Serono is one of the biggest providers of fertility assistance and is owned by Germany’s Merck. This will exempt it from US tariffs and its IVF treatment will be available at reduced prices on TrumpRx, the president’s drug pricing site that is set to launch next year. AstraZeneca announced that it will cut prices in the US whilst also pressuring the NHS to pay more and Novo Nordisk is hoping that its weight-loss drugs Wegovy and Ozempic can be used to treat Alzheimer’s as Phase 3 trial results are expected to be published this quarter. Novo Nordisk could do with some good news! Meanwhile, Johnson & Johnson is now subject to a group action lawsuit in the UK brought by KP Law on behalf of around 3,000 individuals accusing the US pharmaceutical company of knowingly selling baby powder containing asbestos-contaminated talc in the UK that caused cancer.
• Driverless taxis from Waymo will be on London’s streets next year. Uber Uber and UK tech company Wayve have already announced plans to test their driverless taxis in London next year so things could get quite exciting!
• Following an investigation into the industry, the Competition and Markets Authority has recommended 21 measures designed to stop pet owners from being “left in the dark” about the prices they pay at the vets. It proposed a new price comparison website to make the cost of prescriptions more transparent and the price of services more generally among other things.

My fave video this week is, I’m afraid, the croissant one 😁. Yes, I know it’s silly but I found myself watching it over and over…

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!

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…

• Netanyahu said that Israel supports Trump’s peace plan for Gaza which involves a “Board of Peace” to oversee an apolitical Palestinian committee that would govern Gaza. It’s up to Hamas now.
• The US continued to change its tune on Ukraine and is now offering it more intel that’ll help its long range missiles and drone strikes to be more accurate.

IN DEFENCE NEWS…

• Polish PM Donald Tusk appealed to banks to accept higher taxes to fund the increase in defence spending without hurting household finances.
• Australia announced its biggest overhaul of the military since the second world war and will embark on a A$25bn defence spending spree to make it more self-reliant.

IN TARIFF & TRADE NEWS…

• The EU is getting increasingly concerned about the possibility of the existing list of 407 items that are subject to 50% import taxes in the US growing because US officials have hinted that the list could expand to include “derivative” products. The list is currently being reviewed and it looks like it will get reviewed every quarter. This will clearly create a lot of uncertainty.
• Trump tightened export controls on Chinese companies by including subsidiaries of groups already on the “entity list”. This is the trading blacklist of companies and individuals subject to export controls. Going the other way, China announced that it would curb the use of Nokia and Ericsson in its telecoms networks. This echoes calls by European governments who have urged reticence in the use of Chinese companies such as Huawei and ZTE in critical infrastructure but it seems that this has actually had limited impact on their market share.
• Trump announced new tariffs on timber and wood furniture that will kick in from October 14th. There will be import tariffs of 10% on softwood timber and 25% on kitchen cabinets and upholstered wood furniture – and they’re going to rise higher from January next year to 30% and 50% respectively unless countries agree a deal to lower them!

IN TRUMP THINGS…

• IN MAHA MATTERS – Trump announced the direct-to-consumer drug sales programme called “TrumpRx”. Consumers can go on to TrumpRx.gov, which has a list of drugs and a direct link to the pharmaceutical companies that sell them in order to cut out the middleman. Pfizer’s agreed to cut drug prices by 50-85% of current rates and make them available on the website. Other pharmaceuticals companies are expected to follow suit. The share prices of cannabis stocks – including Tilray Brands, Canopy Growth and Cronos Growth – got a boost from Trump posting about the potential benefits of CBD on Truth Social.
• IN VENGEANCE UPDATES – the administration said that the liberation day tariffs would remain even if the Supreme Court ruled them to be illegal. Trump said that US cities should be used as military “training grounds” because “America is under invasion from within, he’s pursuing the 95 year-old investor George Soros through the courts to get him back for donating hefty sums of money to human rights groups, investigative journalists, advocates for democracy and other causes, including Democratic campaigns and he’s making YouTube pay $22m for a new ballroom in the White House as punishment for suspending his account in the aftermath of the Capitol Hill riots.
• Meanwhile, it looks like Fed governor Lisa Cook is going to keep her job until the US Supreme Court hears arguments in her case in January. Perhaps this will give time for supporters of Cook to rally round and consolidate their position…

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – The US government went into shutdown as Democrat and Republican lawmakers couldn’t agree on funding. Hundreds of thousands of jobs are impacted and output will be lost. No one knows how long the shutdown will last or how many government jobs will be lost permanently but Trump is threatening to use this as an opportunity to further slim down the state.
• IN THE UK – Labour held its conference this week and it looks like the government’s softening us up for some Budget body blows! Later in the week, the Bank of England was a bit naughty because it swapped business data figures after they were published. This doesn’t make the ONS look good and it makes you feel like our central bank is flying blind, particularly given that we’ve still got dodgy employment numbers because the ONS can’t do its job properly.

IN ENERGY NEWS…

• Data shows that Britain has the highest household electricity prices in the world for the second consecutive year, putting extra pressure on Miliband and his net zero targets.
• It turns out that Britain has spent over £1bn this year switching off windfarms because the grid can’t cope with the extra capacity. The industry calls this curtailment – and curtailment costs are passed on to customers via higher bills! More pressure on Miliband…
• The future of OVO Energy is looking tricky after it failed financial resilience tests set by Ofgem. It’s not the only one though – Octopus Energy is also at risk as is another company that hasn’t yet been named.

IN CRYPTO NEWS…

• Prices of bitcoin, ether and other crypto assets have fallen sharply recently – and it’s hitting the digital asset treasury (DAT) companies who are ploughing money into this asset class. If things continue this way, it could get very dangerous for them and possibly the assets that they hold because they could become forced sellers.

IN BUSINESS TRENDS…

• UK business confidence fell to a record low, according to the latest survey from the Institute of Directors thanks to ongoing unease over labour costs and energy prices. I wouldn’t have thought it will get much better until we know more about what the Budget has in store…

IN INVESTMENT TRENDS…

• IN IPO NEWS – Data centre property developer Fermi floated in New York with great success (up 55% on the first day of trading) while its listing on the LSE was a bit meh (down 8.7%), but the listing still showed increasing confidence in the market. Meanwhile, the Treasury is going to grant a stamp duty holiday to new LSE listings in order to make listing here more attractive. It would mean that investors won’t have to pay the 0.5% tax on buying shares of newly-listed companies. Shawbrook is getting ready to list as its two PE firm owners are itching to revive plans that were put on ice earlier this year when markets had a bit of a turn when Trump announced his tariffs.
• IN LBO NEWS – games maker Electronic Arts is going private via a massive $55bn LBO involving a consortium of big investors who are paying $210 per share in cash. Will there be further LBOs in the gaming industry given the potential susceptibility to AI?
• IN M&A NEWS – Bain Capital, which owns Gail’s and Pizza Express, has put in a bid for Costa Coffee. Coca-Cola is trying to offload it at the moment.
• IN MONEY RAISING NEWS – chipmaker Cerebras Systems just raised $1.1bn from investors in its latest funding round with a view to an IPO further down the line. It is taking on the mighty Nvidia and has an impressive client list including the likes of Meta, Amazon Web Services and Mistral in addition to US government departments and healthcare institutions.

IN EMPLOYMENT TRENDS…

• IN THE US – unofficial data from the payrolls processor ADP showed that private sector employers shed the most jobs over September since 2023. Economists were expecting more jobs not fewer! Walmart’s CEO was adamant that “AI is going to change literally every job” but then the latest research from Yale University’s Budget Lab showed that the US jobs market isn’t yet showing any “discernible disruption” from AI. That being said, a study conducted by researchers from Oxford Uni and VC firm Vela Partners found that AI models beat VCs in finding tech companies that would later raise at least $500m or sell a company for this amount of money. Interestingly, AI was less good at finding winning founders!
• IN THE UK – the latest report from Adzuna reflects not only an overall fall in hiring but also particular weaknesses in job opportunities for graduates, healthcare workers and teachers.

IN CONSUMER TRENDS…

Consumers are having a lot to deal with at the moment!

• BEEF PRICES – prices for steak in the US have been booming thanks to tight supply and strong demand. Beef prices in August were up by 13.9% year-on-year versus the overall inflation rise of 2.9%! In the UK, beef prices shot up by 25% in August year-on-year and has contributed to rising food price inflation. I think this is the cumulative impact of the last few years where we’ve seen supply chains shift, war and weather-powered knock-on effects and now tariffs.
• PETROL PRICES – an investigation by the CMA concluded that petrol stations have been ripping off drivers. Some supermarkets have seen their profit margins double from 4% in 2017 to somewhere between 8% and 9.1% in the three months to June. I’m not sure what action will be taken for now but the introduction of the Fuel Finder scheme, which which gives drivers real-time pricing data, can’t come soon enough! It is going to launch by the end of the year.
• BUY NOW, PAY LATER – UK Finance’s latest report shows that although young people fuelled the boom in BNPL, the uptake of the service has more than doubled over the last year in the 55-to-64 year old age category!
• REAL ESTATE – in the US, the housing market market remains stuck in its worst rut for years as sales of existing homes fell to their lowest level in almost thirty years, according to data from the National Association of Realtors. In the UK, data from Nationwide showed that the property market returned to growth in September after a brief summer lull but Zoopla said that uncertainty surrounding potential property tax reforms are holding back activity for homes priced over £500,000.  Speculation about various Budget initiatives has just resulted in people just sitting on their hands.

UK households have increased their savings rate in the three months to June, according to the latest data from the ONS. The savings rate is defined as the percentage of household disposable income that is saved. It’s the first fall since 2023. This suggests that consumers are losing confidence in the economy.

IN RETAIL NEWS…

• IN TRAD SHOPS – the latest monthly report from the BRC showed that shop price inflation rose by 1.4% in September, up from 0.9% in August. Retailers warned that any tax rises could push inflation ever higher. Tesco announced a decent performance and warned of a potential supermarket war leading into Christmas while the owner of Selfridges, Cambridge Retail Group, announced a £130m drop in sales thanks to a slowdown in the flow of rich foreigners coming to London. It, and other luxury retailers, continues to appeal to the government to offer duty free shopping once again.
• IN ONLINE RETAILERS – 270,000 people have signed a Change.org petition to ban Shein in France! Shein has put in a number of pop-up shops but the French senate has just approved legislation aimed at restricting the march of ultra-fast fashion companies including the likes of Shein and Temu. Asos’s woes continued as it issued a profit warning, sending its share price down by 4.8%. It’s down by over 40% this year!
• IN CONSUMER GOODS – Nike managed to beat expectations when it published its latest numbers, implying that turnaround efforts are starting to filter through following the appointment of a new CEO last year.

IN LEISURE NEWS…

• IN HOLIDAYS – cruise company Carnival Corp had a a great quarter in North America and Europe and is continuing to see strong bookings. EasyJet announced its entry into the luxury market via its new Luxury Collection brand but I wonder how successful it will be given that it is known for being cheap and cheerful. I think it’s possible for high end brands to “trade down” but that it’s much more difficult for them to “trade up”, but we’ll just have to see!
• IN RESTAURANTS – Greggs announced some price rises, saying that it couldn’t hold off any longer because of higher ingredients prices. The timing of this seems a bit weird to me – surely it could have waited a big longer for the Budget and then blame it all on the government! Maybe things are not going well in the background…

IN AI NEWS…

• Global AI players such as OpenAI and Perplexity are trying to broaden their respective footprints in India by launching India-focused plans and products this summer in order to target the country’s youthful population.
• Alibaba is making great progress in AI – and its share price has so far this year outperformed the likes of Nvidia, Meta Platforms and Palantir.
• ChatGPT is launching a new tool to let parents know if their children try to discuss suicide or self-harm with its AI chatbot. OpenAI is introducing tighter parental controls which will allow parents to link their own ChatGPT account to a child’s, which will enable it to pass on alerts.
• OpenAI saw its valuation leapfrog that of SpaceX and it’s now become the world’s most valuable start-up as a result, following an employee share sale. It now has a $500bn valuation!
• “Grief tech” is an interesting growth area for AI at the moment as it helps people to process loss. Obviously, there are variations as to how this all works but the “real life chatbots” use a combination of video chat, text, phone or voice assistant to communicate with a digital version of someone who is no longer alive. Players in this area include Hereafter AI and You, Only Virtual.

IN CHIP NEWS…

• SK Hynix and Samsung got a boost to their respective share prices on news that they’d signed a letter of intent with OpenAI to supply chips to its $500bn Stargate data centre project.

IN HARDWARE NEWS…

• Dyson suffered its first loss in sales for 22 years thanks to a combination of slowing economic growth, weakening consumer confidence some one-off events that included a factory fire in the Philippines.

IN HACKING & PRIVACY NEWS…

• IN HACKING – JLR’s shutdown due to hacking had a detrimental effect to UK manufacturing as a whole, driving activity to a five month low! Over in Japan, Asahi got hacked, meaning that it was unable to process orders, make deliveries or offer customer service in Japan. This prompted panic buying of Asahi Super Dry from thirsty Japanese! It is interesting to note that a common link between all the recent hacks involving M&S, Co-Op and JLR is Tata Consultancy Services (TCS), an Indian IT and outsourcing giant. Some are wondering whether hackers have been targeting the helpdesk function that is shared among customers.
• IN PRIVACY – the Home Office is having another go at Apple. It wants access to British users’ data via a backdoor. It tried this before to get any users’ data, but it had to back down. Meanwhile, Meta said that it would use conversations that users have with chatbots to personalise advertising and content across its platforms in an example of how tech companies are going to monetise the use of AI.

IN MEDIA NEWS…

• Universal and Warner Music are closing in on making deals with companies including ElevenLabs, Stability AI, Suno, Udio and Klay Vision regarding how to pay for content. They are also in talks with Spotify and Google. The talks are focusing on how labels get paid for creating AI-generated tracks and for training LLMs and, at the moment, it looks like they’re seeking out a structure similar to the one that’s used for streaming.
• Mirror journalists are on the verge of taking strike action under the banner of the National Union of Journalists following publisher Reach’s decision to make big job cuts last month. Unions are worried about the increased pressure on staff after years of cuts as well as the rising use of AI.

• IN CAR NEWS – Automakers braced themselves for the expiry of the $7,500 tax credit which expired earlier this week. Makers reckon that sales will fall off a cliff but they did well in the period leading up to the deadline as everyone rushed to beat it! Tesla even hit a new sales record in Q3 as a result. Elsewhere, BYD saw its sales fall for the first time since February 2024 thanks to sluggish domestic demand in China. Overseas sales have been strong, though!
• IN PHARMACEUTICALS – AstraZeneca announced that it will list its shares directly on the NYSE, replacing its ADRs. It will still keep its listing and HQ in the UK. Is this a shot across the bows towards the UK government to make them play nice?? Also we heard that GSK’s CEO Emma Walmsley is going to step down at the end of this year. She’s been the CEO since April 2017.
• IN PAYMENTS – international payments group Swift is creating its own blockchain to enable faster and more secure transactions between global banks. It’s going to be working with Bank of America, Citigroup and NatWest – along with many others – to create this shared digital ledger. This could be big because it could make a huge impact on how quickly payments are processed. It’d presumably be good for security as well…

My fave video this week was the one about the teacher explaining Romeo and Juliette in Gen-Z 😁!

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!

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…

• Russia flew a drone over Romanian airspace this week (it was Poland last week – but there were many more on that occasion). Unlike with the Poles, there was no shooting down. Clearly the Russians are just trying out NATO defences.
• On the other side, Russians have been losing internet access thanks to Ukrainian drone attacks. This has disrupted consumers, companies and public services. The blackouts have lasted anything from a few hours to a few weeks over the summer.

IN TRUMP NEWS…

• Trump continued in his efforts to get Fed governor Lisa Cook sacked but the appeals court didn’t let him get his way on this occasion and she was able to take part in the rate-setting meeting this week. Still, Trump’s now taking it to the Supreme Court.
• The Supreme Court said that it will hear the arguments about the legality of the liberation day tariffs on November 5th. It’s good that this has been fast-tracked because it will give some certainty – but the problem is that Trump’s team is already looking at ways around a decision if things don’t go their way.

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – the Fed cut interest rates by 0.25 percentage points, not the 0.5 percentage point cut that Trump had hoped for. This cut was voted for by 11 of the 12 members of the committee.
• IN CHINA – official figures showed that retail sales and factory output grew at their slowest pace this year. Moody’s Analytics said this was down to a combination of Beijing’s clampdown on production overcapacity and the fading away of the export frenzy when everyone was trying to beat the US tariffs.
• IN THE UK – the government’s approval rating of 20% is a full 10% behind Reform and MPs reckon Starmer’s got until May local elections next year to turn things around or he’ll be out. UK inflation held steady at 3.8% and the Bank of England kept interest rates unchanged at 4%. but the latest ONS figures showed that UK government borrowing for the first five months of the fiscal year was way more than the OBR had been expecting. It looks increasingly like we’re going to be facing some serious tax rises in the autumn Budget. Actually, on the subject of tax, rather than just concentrate on wealth taxes (which arguably won’t raise all that much anyway) there were some interesting alternative solutions suggested – like reforming inheritance, capital gains and land taxes. Stamp Duty could be based on updated parameters and corporation tax needs to be streamlined while employee national insurance could be rolled into income tax. VAT could be simplified, freeing up money to be used to target those who actually need it.

IN ENERGY NEWS…

• A US-UK energy accord was signed before Trump landed for his state visit which involved a number of deals for SMRs worth about $100bn, including one between Centrica and X-Energy.

IN CRYPTO NEWS…

• We saw that the FCA is thinking about loosening compliance requirements for crypto firms, the main effect being that they won’t have to deliver “good outcomes” for retail clients. At the moment, this extra layer of protection is given to retail clients. The FCA takes on oversight of the crypto industry next year (at last!).

IN BUSINESS TRENDS…

• IN REGULATION – Trump’s new appointee to the SEC, Paul Atkins, signalled that he’s going to take a lighter touch regarding enforcement versus his predecessor, Gary Gensler. He said that he will be giving business notice of any technical violations rather than “bash down their door” unannounced. The SEC’s job is to protect US investors but Atkins definitely seems to be keen to make it more business-friendly. In addition to this, he signalled that companies will be allowed to be quoted on public markets even if they ban shareholders from filing class-action lawsuits. This is another move by the SEC to make compliance less onerous for companies.
• ON REPORTING – Trump called for US companies to ditch quarterly reporting, instead opting for reporting twice a year. He said it will help companies save cash and let execs focus more on their businesses. The UK stopped quarterly reporting over ten years ago and is often used as an example of how it can work. The EU and Singapore are other examples of how it can work as well. I don’t really believe that switching from quarterly to half-yearly reporting makes companies have a longer term outlook – I just think it’s one less thing to have to do and gives the companies a bit of breathing space.
• EU companies are still getting hit by bottlenecks on rare earth supplies from China – and this is despite an apparent agreement reached two months ago between the EU and China to address this issue.
• Big brands including Coca-Cola, McDonald’s and Procter & Gamble look like they’ve been de-emphasising their American-ness and re-emphasising their local credentials in their latest ad campaigns. This is a shift from decades of doing the opposite and is a reaction to rising negative perceptions of America.

IN INVESTMENT NEWS/TRENDS…

• IN MARKETS – Are we approaching a stock market crash? There are similarities between what’s happening now and what happened at the end of the 90s in the dotcom crash, with AI and crypto companies taking the place of the dotcoms. FWIW, barring any other surprises I think that the most likely time for there to be a crash is if Trump puts in a disappointing performance in the midterm elections at the end of next year. He’s so tied in to so many things (like crypto, tech etc.) that I think a poor showing could really spook investors (and corporates). Meanwhile Robinhood announced that it was going to offer retail investors a slice of a “concentrated portfolio” of unlisted start-ups! Risks will be way higher, but the hope is that the returns could be stellar. ARK Invest and Pulsar Group led a $300m investment in Brera Holdings, a company that has until now owned stakes in various football teams. The company announced that would be buying up solana tokens – news of which sent Brera’s share price up by almost 200%. The company will change its name to Solmate. This is another example of a company deciding to become more of a crypto asset treasury. Back home, UK stocks are being sold of at the fastest pace in 20 years as investors fear the worst in the upcoming Budget. On a positive note, the LSE became the first major exchange in the world to launch a complete blockchain-powered trading system. It completed its first transaction using this system this week!
• IN IPOs – StubHub floated in the US this week but its debut was underwhelming as the share price fell by 6.6% even though it went for a middle-of-the-range valuation. Security company Verisure announced plans for an IPO in Stockholm, which some see as an early sign of the opening up of the European markets. It will no doubt be monitored very closely!
• IN M&A – US investment bank Jefferies agreed to Japan’s SMFG raising its stake to 20%. SMFG bought a 5% stake back in 2021 and raised it to around 2023. This sounds very similar to what MUFG did with Morgan Stanley in the aftermath of the financial crisis. Elsewhere, co-founder of Deliveroo, Will Shu, is going to step down the moment DoorDash’s acquisition of the company completes next month. It’ll be the end of an era! DoorDash announced in April that it would buy Deliveroo for £2.7bn.

IN EMPLOYMENT TRENDS…

• US companies have slowed hiring down significantly since Trump’s tariffs hit – and in some cases, they are cutting headcount.
• In the UK, bosses say that they can’t afford bigger pay rises because of inflation, something that was echoed by the latest figures from the ONS which showed that UK jobs and pay growth are losing momentum.

IN CONSUMER TRENDS…

• The Food and Drink Federation warned that food and drink prices are going to rise faster largely thanks to rising production costs, which will be bad news for consumers who are already under pressure. This trend was echoed when Aldi warned that food prices will rise if Rachel Reeves continues to increase costs for employers
• Research from GfK shows that Britons are planning to save less as interest rates fall and perhaps because they’re feeling more of a need to keep money back to pay for expected price rises. Overall consumer confidence is also wavering at the moment.
• It’s good to be a rich kid at the moment as wealthy parents are rushing to give them assets before expected rises in Inheritance Tax come in.
• It seems that the surge in pet and pet goods buying has really slowed down as Pets at Home saw a big sales drop which prompted a profit warning and the sudden departure of its CEO. This is presumably largely due to more people returning to offices.

IN REAL ESTATE NEWS…

• IN RESIDENTIAL – Rightmove data showed that house prices fell for the first time since January last year. Some of this will be because of the higher number of homes being listed, but some of this will be because potential buyers are staying away until we know more about what the Budget will bring. Barclays data says that it’s becoming more common for buyers to avoid the first rung of the ladder and go straight to their “forever home” as semi-detached properties attracted more first time buyers than flats over the August period. Meanwhile, it’s bad news for renters because landlords are selling in increasing numbers so as not to get hit by expected tax rises in the autumn Budget according to the latest data from Hamptons.
• IN CONSTRUCTION – Britain’s biggest housebuilder, Barratt Redrow announced a decent performance for the year but it was cautious about the year to come because of high inflation, a cooling jobs market and sluggishness in the economy. This was the first set of full-year results from the company that bought Redrow last October.

IN RETAIL NEWS…

• Trump’s tariffs and the end of the de minimis rule mean that a new phenomenon is emerging – that of the delayed import tax bill! This can be a nasty and unwelcome surprise and could well start to hit orders of products that come from overseas. Meanwhile, shares in Pop Mart, the company behind the Labubu dolls, dropped by their sharpest rate since April on fears that the dolls’ popularity has reached its peak. Indeed, the waning in popularity of these dolls is the biggest danger – not rivals copying their idea.
• Temu’s UK operations managed to double revenues and pre-tax profits over the year as cash-strapped Brits bought up their cheap products.
• A potential sale of Argos to JD.com was abandoned as neither JD.com nor Argos’s owner Sainsbury’s had been able to agree on a suitable price. Will this draw other potential bidders for Argos, I wonder??

IN TECH NEWS…

• IN CHIP NEWS – China banned tech companies from buying Nvidia’s AI chips. Companies including ByteDance and Alibaba have been told to end their testing and orders of the Nvidia chip that has been specifically designed to be supplied to China. Domestically-made chips are deemed to be on a par with the more basic chips in the Nvidia range and China’s trying to wean itself off American tech. Nvidia announced that it would invest $5bn in Intel to develop chips for PCs and data centres. Intel’s share price rocketed up by 23% on the news and it comes just a month after the US government agreed to take a 10% stake in Intel. Meanwhile, China’s leading chip producer, SMIC, is conducting trials on the country’s first domestically manufactured chipmaking equipment made by Yuliangsheng.
• IN QUANTUM COMPUTING NEWS – UK start-up Quantum Motion built the world’s first quantum computer using the same silicon chip tech used in laptops and phones! It’s now going to be tested at the UK’s National Quantum Computing Centre (NQCC) in Oxfordshire where researchers will look at how it could help to save real-world problems like designing new medicines, for example. Then we saw that the Genesis quantum computer, made by Oxford Quantum Circuits, is helping to power New York’s first ever combined quantum-AI data centre that will formally open next week. It will be used initially to help Wall Street banks address fraud
• IN HARDWARE NEWS – Meta is struggling to cut out Chinese suppliers like Goertek from its supply chain. Goertek makes Meta’s VR Quest headsets and its popular Ray-Ban smart glasses. Talking of which, Zuck unveiled Meta’s latest gadgetry this week, which included the launch of Meta’s first smart glasses with a built-in screen as well as improved versions of its existing Ray-Ban Meta line-up. Elsewhere, China’s flying car start-ups, including EHang, are making progress. This company became the first company in the world to get approval from its national regulator to carry passengers – in unmanned flights – on tourist routes!
• IN SOFTWARE NEWS – Google’s parent company, Alphabet, hit a $3tn valuation this week – a level only hit by Nvidia, Microsoft and Apple – so this is a major moment. It continues to surf the AI wave but also got a recent boost from the less-strict-than-expected court ruling on whether it had created an illegal monopoly in online search.

IN MEDIA NEWS…

• Disney cancelled Jimmy Kimmel’s evening show for what he said about Charlie Kirk. It seems like we’re seeing a trend forming after Stephen Colbert’s show was cancelled for remarks that caused offence. It is getting increasingly difficult for anyone who does not conform to the MAGA agenda to get a platform to express their views.
• Sky announced a headcount reduction of 900 out of its 23,000 UK employees. This is in addition to the 3,500 who have already been cut over the last 18 months. It’s all part of the transitioning of the business to streaming. Talking of which…
• IN STREAMING – Amazon announced that it would be launching augmented reality football coverage, a service called Prime Vision. The idea is to get more engagement, especially from younger people, by almost gamifying the experience with extra graphics and options. Although it sounds a bit gimmicky, they’ve used it with NFL coverage in the States and it’s proved to be successful.
• IN SOCIAL MEDIA NEWS – the US and China are getting ever closer to a deal on the transfer of ownership of TikTok. More details are being hammered out but Beijing says that the US app will use the Chinese algo, which is interesting – because this is the app’s “secret sauce”!

IN EV NEWS…

• Tesla shares had a nice uptick thanks to news that Musk had bought $1bn worth of the company’s shares last week. On the flipside, Tesla is now being investigated by the NHTSA amid allegations that its electric door handles have been trapping children in Model Y cars.
• Rivian is going right ahead with building a Georgia factory despite the continued de-emphasis of the importance of EVs in this administration’s policies.

IN DRIVERESS NEWS…

• The biggest sensor maker in the world for self-driving cars, China’s Hesai, made the surprising statement this week that the world was not yet ready for fully driverless cars because regulators are currently unable to deal with deaths that are caused by them.

GSK announced plans to invest $30bn into R&D and its supply chain in America over the next five years as it tries to show the White House that it’s doing something in response to Trump’s constant criticism.

Novo Nordisk got some welcome good news this week that the pill version of its weight-loss drug is as effective as its existing injectable version – and the company’s share price rose by over 6% in response!

There’s no competition as far as I’m concerned about the winner of this week’s video – it’s the one with the puppy! 😍😍😍

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 TARIFF NEWS…

• Following last week’s court judgment which ruled that Trump had overstepped his authority on imposing tariffs, the president is appealing to the Supreme Court to overturn the tariffs. A ruling on this is expected before the year is out.

IN TRUMP THINGS…

• IN COURT JUDGMENTS – A San Francisco judge blocked the deployment of the National Guard in California despite the White House saying that the demonstrations there qualified as a “rebellion”, thus triggering a clause in the Posse Comitatus Act allowing him to do so. However, the judge ruled that there was no rebellion and troops should be pulled out from September 12th. Also, the court of appeals for the District of Columbia temporarily reinstated a Democratic FTC commissioner  who Trump had been trying to fire. She’s allowed to return while her appeals process continues. She’s the last remaining Democratic commissioner at the FTC! The government may well appeal the decision…
• IN TRUMP STICKING HIS OAR IN – ECB president Christine Lagarde voiced concerns over the implications of Trump’s constant pressure on the Fed – i.e. that it will lose its independence – while Trump called for pharma companies to publish more data on the efficacy of their Covid vaccines to settle all the current squabbling. He also signed an executive order to change the name of the Department of Defense to the Department of War because he said that America won loads of conflicts when it originally had that name. This is obviously just posturing but aligns with Trump’s current way of doing things.

IN REGIONAL/COUNTRY THINGS…

• IN THE US – Hedge fund billionaire and Bridgewater Associates founder Ray Dalio observed that “gaps in wealth”, “gaps in values” and the erosion of trust were behind the “more extreme” policies in the US. He added that other investors were too scared of Trump to criticise him and the country’s heading towards an autocracy. Analysis by Redfin showed that US home ownership fell for the first time since 2016 thanks to a combination of rising property prices, high mortgage rates and economic uncertainty while Trump’s immigration crackdown means that the country is on track for its first ever population decline!

IN ASIA…

• Xi, Putin and Kim cosied up at China’s massive military parade but India’s Modi was also showing the love. Interestingly, this is the first time that Xi and Kim have met in person for six years. Some say that this new direction reflects concerns by China that North Korea is getting too close to Russia.
• IN INDONESIA – markets fell initially thanks to civil unrest that was prompted by new housing allowances of $3,000 for parliamentarians. Protests broke out over economic inequality, the lack of jobs and police brutality. Eight people were killed while mobs broke into and looted the homes of Indonesia’s finance minister and a number of lawmakers over the weekend.
• IN THAILAND – Former businessman Anutin Charnvirakul, who became known for his support for the decriminalisation of cannabis, was voted in as Thailand’s new PM following a period of political turmoil. He has promised to dissolve parliament within four months and call a general election as part of a deal he made to get support for the vote.

IN EUROPE…

• IN TURKEY – Markets fell after an Istanbul court ruled that the appointment of the head of the main opposition party was invalid. Dozens of opposition mayors and officials have been arrested in clampdowns, weakening any opposition to Erdoğan’s power. Does this drowning out of opposition voices sound at all familiar?!?
• IN THE UK – borrowing costs rose at the fastest pace in the G7, the pound weakened as a result and Rachel Reeves announced that she had opted for a late budget (November 26th), so we’ll all be in limbo until then, possibly fearing the worst. There was more bad news for the government’s plans about housing as the latest data from the Mineral Products Association (MPA) showed that cement production has hit a 75-year low, which reflects the ongoing gloom hanging over the housebuilding industry as government data showed construction of 35,640 homes in Q1 this year. This is a major shortfall versus the quarterly target of 75,000 that is needed to hit its big target of 1.5 million homes by 2030. In other news, Angela Rayner resigned over a tax scandal and Starmer instigated a major cabinet reshuffle.

IN COMMODITIES NEWS…

• IN OIL – ConocoPhillips announced that it would cut up to 25% of its staff by the end of 2026 as falling oil prices continue to take their toll. The company said that most of the cuts would fall this year and affect both full timers and contractors.
• IN GOLD – prices surged following Trump’s continued pressure on the Federal Reserve which has caused investor concern. They breached $3,500 per ounce and Goldman Sachs subsequently said it could go to $5,000.

IN ENERGY NEWS…

• Orsted got a handy $939m from Equinor, Norway’s state-controlled oil and gas group (which is kind of ironic, don’t you think??), as the investor bought into the rights issue in order to maintain its 10% stake. This is a rare bit of positive news from a company that has taken a bit of a beating recently, particularly as a result of Trump’s dislike of wind power.
• Beijing has ordered a reining in of capacity in the solar sector. China is all-powerful in solar power, but overcapacity has not just hurt foreign competitors, it has also ended up cannibalising itself after some record years.

IN CRYPTO NEWS…

• The Trump family’s World Liberty Financial token, WLFI, fell by a chunky 25% on its market debut this week but there was more to cheer around the Trump family dinner table as the crypto venture American Bitcoin, which Eric Trump co-founded, saw its share price boom by 110% initially on its market debut. Eric Trump and Donald Trump Jr are major shareholders in the company.

IN BUSINESS TRENDS…

• The latest data from BDO shows that UK manufacturers’ confidence hit a nine-month high in July thanks to Trump’s tariffs not being as bad as manufacturers had originally thought.

IN INVESTMENT NEWS…

• The latest Bank of America survey showed that investors are buying up emerging market stocks because they are being seen as undervalued. On the other hand a whopping 91% of fund managers said that US equities were overvalued.
• In the UK, seven UK local authority pension funds look set to combine assets with a bigger fund manager called Border to Coast. This is all part of a broader plan by the chancellor to create fewer managers with bigger financial clout.
• Saudi Arabia’s PIF made an $8bn writedown on the value of its holdings in gigaprojects – including Neom! Its finances are being hit by cost overruns and weaker oil prices. The PIF owns five gigaprojects which are part of wider plans to diversify the kingdom’s income away from oil.
• IN M&A – China is creating the world’s biggest shipbuilder by merging two state-controlled shipbuilders – China State Shipbuilding (CSSC) and  China Shipbuilding Industry – in a deal worth $16bn. The enlarged company will have a single listing on the Shanghai Stock Exchange. Brussels approved the €4.1bn acquisition of Just Eat Takeaway by Prosus, Centrica bought a £1.5bn gas terminal – Europe’s biggest gas import terminal – in a sign of ongoing commitment to fossil fuels (well it is a gas company!) and Canadian t-shirt maker Gildan got closer to buying US underwear maker Hanesbrands.

IN EMPLOYMENT TRENDS…

• The latest KPMG-REC monthly survey showed that falling demand for workers is hitting wages. Vacancies also dropped at their fastest pace since April last month.
• The latest data from the ONS showed that UK employers have been cutting back on bonuses and hiring over the last few months thanks to economic uncertainty. This was also reflected in a dramatic fall in profits at agency recruiter PageGroup.

IN BANKS NEWS…

• HSBC voiced concern about its commercial property loan book as Hong Kong’s prime office rents have dropped by over 20% since 2022 and vacancy rates have hit record highs of around 19%! It said that 73% of its commercial property loans are risky. This figure was less than 30% just a year ago!
• Santander became the latest one to relax lending rules to allow homebuyers to get a bigger mortgage. Now applicants earning £100,000 or more can now borrow up to 5.5 times their income with a deposit or equity of up to 10% of the home’s value!

IN INSURANCE NEWS…

• Admiral has decided to put aside £50m to settle claims that it undercompensated customers for car claims. It’s not the only insurer to do this but it’s the first one to acknowledge its shortcomings and others are expected to follow.

IN FINTECH NEWS…

• Klarna’s loss has widened over Q2 ahead of its much-anticipated New York listing. Klarna is keen to tap into current market feelgood – and who could blame it! It has been trying to move away from its BNPL roots to morph into becoming a neobank offering debit cars, interest-bearing loans and the whole shebang.

IN CONSUMER TRENDS…

• The latest BRC-KPMG figures highlighted a better-than-expected July for spending as clothing and homeware sales were up. A similar conclusion was drawn from the latest figures from Barclays as shoppers spent on affordable luxuries.
• Consumers were not, however, spending money on home improvements according to Marshalls, a specialist in pavements, pavoirs and roofing. The company announced an unexpected profit warning last month.

IN RETAIL NEWS…

• River Island managed to avoid collapse as a High Court judge approved its restructuring plan.
• Topshop looks like making a high street comeback as there are plans for new physical stores. Asos bought it back in 2021.
• Troubled fashion accessories retailer Claire’s has appointed administrators in UK and Ireland just a week on from its parent company filing for bankruptcy in the US and Canada. This is obviously a great shame for those involved.

IN CONSUMER GOODS…

• Birkenstock put in a strong sales performance over the quarter, which possibly casts doubt over Crocs’ doom and gloom last week when it said that the “ugly shoe trend” looked like it was coming to an end.

IN LEISURE NEWS…

• IN TRAVEL – Tui said that tighter border rules are putting European visitors off going to the US. Despite this. the company posted market-expectation beating pre-tax profits and was confident enough to upgrade its full-year profit guidance.
• IN RESTAURANTS – Pasta Evangelists announced plans to open 100 new restaurants, creating up to 1,500 jobs. Will this become the next “Jamie’s Italian” or “Carluccio’s”?? The world’s biggest pasta producer, Barilla, has a majority stake in the company (which it bought for £40m) so the restaurant chain is certainly well financed.
• IN GAMBLING – the CEO of gambling company Entain whinged about punters going to the black market to gamble if the government taxes it too much. I don’t think anyone would be surprised about this reaction!

IN CHIP NEWS…

• Nvidia and AMD are going to pay away 15% of the revenues they get from selling chips to China to the US government as part of the deal for them to keep selling into the China market. Trump also sounded more open to the idea of Nvidia selling more advanced AI chips to China but Beijing is not so keen and is asking tech giants like Alibaba and ByteDance to justify why they’re using Nvidia chips and not domestic alternatives.
• Although Apple managed to avoid a 100% chip tariff, it did so by pledging a huge chunk of money to increase production in the US. However, smaller vendors and suppliers just don’t have the same ability to do this so they look like they’ll be hugely impacted because they don’t have the same ability to promise huge investment in US production.

IN AI NEWS…

• South Korean AI start-up Upstage has caused a stir because it has produced an LLM that performs on a par with more advanced and expensive LLMs made in the US and China. It has become the only Korean LLM to be classified as a leading edge “frontier model” by the benchmarking analysis provider Artificial Analysis.
• Anthropic has offered the Claude chatbot to US lawmakers for $1! It’s thought that this will encourage the wider adoption of AI tools in the federal government. OpenAI already has such an arrangement in place and it’s thought that Google is also looking to do something similar.
• Perplexity AI has seemingly made a $34.5bn offer to buy Google Chrome’s browser. This sounds somewhat bizarre given that the whole of Perplexity AI itself is only worth half that! It said that it has the finances in place but you do wonder…
• Musk is threatening to sue Apple because it keeps putting ChatGPT ahead of Grok on the download charts. I think this is just noise because less than 24 hours before this he was celebrating Grok hitting #1 in Apple’s download charts in Singapore.
• Sam Altman and OpenAI announced plans to invest in a venture called Merge Labs that will connect human brains with computers, in competition with Musk’s Neuralink. Sounds interesting, no??
• DeepSeek’s next AI model has been delayed because it’s trying to use Huawei chips and not Nvidia’s. There have been a lot of technical problems as a result.
• CoreWeave’s shares collapsed by 20% in reaction to it posting bigger-than-expected Q2 losses. That being said, the company said that demand for its services is running ahead of its ability to build fast enough.

IN MEDIA NEWS…

• Paramount sealed a $7.7bn exclusive US rights deal with UFC for seven years to be the US broadcaster of the UFC slugfest.

IN SOCIAL MEDIA NEWS…

• TikTok is going to shut down its Berlin moderation team and replace them with contract workers and AI. Workers are now, understandably, striking. Is this the sign of things to come, though?

• IN REAL ESTATE DEVELOPMENTS – HSBC has decided to reverse its decision to quit Canary Wharf. It’s just signed a 15-year lease for an office that’s a short walk away from its current global HQ, which it will leave in 2027 to relocate to the City. The latest RICS survey showed that the residential property market is cooling down as the prospect of tax increases and uncertainty over interest rate cuts weighs on prospective buyers. Posh estate agent Savills piped up, adding that inheritance tax raid fears are also hitting house sales. Meanwhile, a merger between student accommodation players Unite Group and Empiric was announced this week. It comes after a tricky few years in a sector that has been particularly badly impacted by the pandemic and the rise in construction costs.
• Tesla is looking to introduce robotaxis in New York. It’s keen to roll out its robotaxi service in America’s most populated city and is recruiting data collectors to drive vehicles around the streets. The drivers will collect audio and video to train Tesla’s Autopilot software.

My favourite video this week was, obviously the one with the only four things you will ever need for a top notch video – an old man, a guitar, a dog and some false teeth 😁 Superb 🤣🤣🤣

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…

• Putin decided to execute a drone attack over Poland. NATO fighter jets were scrambled and shot down some of the projectiles but it marks a new, more dangerous chapter in the Ukraine war because it’s the first time the alliance has engaged directly with the Russian military.

IN TARIFF NEWS…

• Trump put pressure on the EU to slap China and India with 100% taxes to turn the screws on Russia (they are big buyers of Russia’s oil, which in turn finances their Ukraine war efforts). Crucially, America said that it wouldn’t impose further sanctions until the Europeans do.
• Talking about pressure, Mexico caved to US pressure and imposed a 50% tariff on Chinese car imports – the maximum level allowed by the WTO rules. Mexico’s in a tricky position because it was the world’s biggest buyer of Chinese-made cars in the first half of this year but then it’s also America’s biggest trading partner.

IN TRUMP THINGS…

• IN IMMIGRATION – South Korea chartered a plane to repatriate Hyundai workers who were unceremoniously marched out of a factory in Georgia by ICE. Trump maintained that experts were still welcome but the optics aren’t encouraging for future outside investment! Korean companies admitted that they had cut corners on US visas but they said that they had to do this because, over the years, America had pushed them to invest more in the country but refused to issue short-term working visas for time-critical projects so they had to be flexible on the use of existing visas.
• IN COURT JUDGMENTS – Trump lost his attempt to defame writer E Jean Carroll who accused him of rape. He tried to plead presidential immunity but a New York appeals court threw this out and he’s going to have to shell out $83m in compensation. He’s now appealing to the Supreme Court. Talking of which, the Supreme Court has decided to fast-track the appeal regarding the legality of Trump’s liberation day tariffs to the first week of November. Meanwhile, a Washington judge ruled that Trump can’t fire Federal Reserve governor Lisa Cook while litigation is still pending. This decision means that Cook will be able to participate in the Fed’s policy-setting committee meeting next week but he’s not giving up because he has asked the appeals court to fire her before that meeting!
• IN MAHA MATTERS – the White House has now laid out its health and food policy changes following a broad clutch of 128 recommendations announced by health secretary Robert F Kennedy in his 20-page “Make America Healthy Again Commission” report. If implemented, the recommendations could change the economics of the healthcare, food and agriculture industries. Suggested measures include a new vaccine framework, restriction of D2C drug advertising, not putting fluoride in water, changes regarding sunscreen etc.
• REGARDING EPSTEIN – the Democrats published a birthday message that the president allegedly sent to Jeffrey Epstein over 20 years ago which Trump maintains does not exist. This caused chaos (particularly over in the UK!). Interestingly, the administration has just decided to step away from joint efforts in Europe to combat disinformation from countries including Russia, China and Iran.
• AHEAD OF THE UK VISIT – JD Vance is lining up US nuclear companies, probably with a view to the president making some big announcements when he makes his UK state visit next week. Chiefs of Nvidia and OpenAI will accompany the president next week and it looks like they’ll announce some big AI infrastructure investments as well.

IN REGIONAL/COUNTRY NEWS…

IN THE AMERICAS…

• IN THE US – the economy added fewer jobs than expected and inflation edged up but it seems that an interest rate cut is still widely expected despite the Fed saying that employment was something that they were monitoring particularly closely regarding the direction of travel. Even Fed Chief Jay Powell recently said that a softer jobs market would take the edge off inflation. MAGA influencer Charlie Kirk was shot dead at a rally, which caused outrage and cries of recrimination from the president and other supporters.
• IN ARGENTINA – Argentine markets fell after president Milei’s party did particularly badly in the elections for the country’s biggest province. Midterm elections are not too far away so this was seen as an indicator of how that might go.
• IN BRAZIL – former president Jair Bolsonaro was sentenced to 27 years in jail for attempting a coup d’état when he lost the 2022 election.

IN ASIA…

• IN JAPAN – the PM quit, making way for a new leader. He jumped before he was pushed but will remain in office until another candidate is found. This comes at a tricky time for the country as it faces threats in the region and isn’t having a great time with Trump.

IN EUROPE…

The ECB kept interest rates unchanged at 2%, but this was widely expected. Meanwhile, Trump’s unpredictability and Putin’s relentless aggression is pushing Norway towards joining the EU. The likelihood of the country joining is currently higher than it’s ever been and there’s growing support for a referendum.

• IN FRANCE – the government collapsed because PM Bayrou lost a vote of no confidence. It had been expected so it wasn’t that surprising to see that president Macron had someone lined up to replace him – long time Macron-loyalist Sébastien Lecornu.
• IN RUSSIA – although Putin appears to be making progress outside Russia both militarily and politically, Russia’s domestic economy is getting trickier and could potentially fall into recession.
• IN THE UK – Labour has vowed to continue with the workers’ rights bill but then we saw an example of how unions are getting the upper hand as the RMT launched a strike for four days this week. The main winners from this were dockless bicycle companies – such as Lime and Forest – as well as Halfords, which saw a 30% increase in sales at its London outlets versus the previous weekend! Meanwhile, Kier Starmer put together a “Budget board” to help the chancellor in the run-up to the Budget but faced criticism for choosing Peter Mandelson as US ambassador despite knowing his past dodginess. Mandy was sacked over his Epstein links. Meanwhile, Reeves hired a planning lawyer to help speed up progress of major infrastructure projects. Sounds like a plan!

IN COMMODITIES NEWS…

• IN OIL – Opec+ agreed to boost output as Saudi Arabia is now looking at chasing market share rather than protecting margin. Meanwhile, Ineos Energy announced that it would pull out of all of its UK investments and put it all into the US, blaming the UK’s high energy prices that have been powered largely by green levies.
• IN GOLD – the price keeps rising and breached $3,600 this week as investors continue to seek out safe havens for their cash in the current climate of uncertainty.

IN ENERGY NEWS…

• Saudi Arabia is emerging as a major force in solar. If things continue like this, they’ll get more of their power from the sun which will leave them with more oil to sell to everyone else!
• Power storage continues to be a key part of our energy future and Scottish company Invinity Energy Systems is making great progress with flow batteries which can store power for longer than other more commonly-used tech, are cheaper to make and last much longer.

IN MINING NEWS…

• Anglo American and Teck Resources announced a $50bn merger to create a copper powerhouse. The enlarged entity Anglo Tek will be headquartered in Vancouver but keep its primary listing in London (which I’m sure the LSE will be pleased about!). This will be the second biggest merger in the history of the mining sector.

IN CRYPTO NEWS…

• Packaging group Eightco Holdings saw its share price go moon bound as it surged by 3,000% when it announced a strategy to buy up Worldcoin tokens, echoing Strategy’s wildly successful play of buying up and storing bitcoin – but with a different crypto asset. Are we reaching the point where this seemingly crazy asset might actually work??
• Shares in bitcoin hoarders weakened this week. Names like Strategy, Metaplanet and Smarter Web Company were hit badly. Some company valuations have now fallen below the value of the crypto they hold, which is concerning.
• There was a really interesting article on how Trump went from crypto-sceptic to crypto fanboy – and it basically stemmed from when he and his family got debanked in the wake of the Capitol Hill riots and subsequent blow-back. It makes a lot of sense and is definitely worth a read if you have access to it!

IN INVESTMENT TRENDS NEWS…

• IN IPOs – it looks like things are getting back on track in the US. Although only $22bn has been raised in IPOs so far this year in the US, the pipeline is looking good. Renaissance Capital reckons that there could be 40 to 60 US IPOs between now and the year end that could raise around $10bn. The fact that Klarna had a decent market debut this week will certainly have added to the feelgood! It looks like things might be improving in Europe as well on the IPO front, so all eyes will be on the likes of Verisure, ISS Stoxx and Swiss Marketplace Group who will be floating over the next few months.
• IN M&A – Paramount Skydance is preparing to make a cash bid for Warner Bros Discovery but it’s not yet formalised and given that Warner is more than double the size of Paramount, this could yet fall apart. Still, it shows confidence!
• IN FUNDING – French AI start-up Mistral got big backing from ASML as the Dutch semiconductor equipment making company took an 11% stake. Mistral is still way smaller than bigger rivals OpenAI and Anthropic.

IN EMPLOYMENT TRENDS…

• UK hiring demand has hit a new low thanks to the impact of AI an uncertainty in policy. This comes shortly after news that wage growth has hit its slowest pace since December 2021. Under-35s are moving from “quiet quitting” to “job-hugging” and sick days have hit their highest level in 15 years!
• Microsoft is cracking down on internal comms channels and putting in place security measures following a recent protest by employees about its contract with the Isreaeli government. Will this kind of action become more widespread??

IN CONSUMER TRENDS…

• IN THE US – America’s middle classes have seen their spending power fall to a historic low, according to Moody’s Analytics’ latest research, while the rich are getting richer and poor are getting poorer. Moody’s chief economist said that globalisation and rising Chinese dominance in manufacturing have played a crucial role in this by reducing the number of jobs available for middle earners. As if that’s not enough, Americans are now facing the biggest increase in healthcare insurance costs in 15 years!
• IN THE UK – the GfK consumer confidence index reflected a divergence in confidence among different demographics. The over-65s are getting more pessimistic whereas Gen-Zs are getting more optimistic! It’ll be interesting to see what effect the Budget will have as companies and individuals hunker down…in the meantime, UK pay growth appears to be grinding to a halt according to the latest figures from Incomes Data Research (IDR) which shows that average pay growth across the economy dropped to its slowest pace since December 2021.

IN TECH NEWS…

• Apple launched its new gadgetry this week, including its first £2,000 handset. It also said that it was blocking EU users from its new Airpods Live Translation tool as a reaction to the implementation of the Digital Markets Act, which it doesn’t like.
• US start-up PsiQuantum attracted a record $1bn in its latest funding round in its bid to build a quantum computer by 2028! Sceptics say that we’re still decades away from building a truly useful quantum machine that can solve some of the most difficult scientific problems.
• IN AI – OpenAI signed a massive $300bn cloud computing deal with Oracle. The news had such a big impact that it propelled founder and CEO Larry Ellison past Elon Musk to briefly become the richest man in the world. The FTC launched an inquiry into AI “companions” used by teens on platforms from the likes of OpenAI, Meta, Google and xAI. This was prompted by the rising number of cases involving suicides and serious harm to young users. OpenAI and Microsoft held more talks about OpenAI’s restructuring and Microsoft signed a deal worth up to $20bn with the AI infrastructure group Nebius to supply computing power for its AI operations for the next five years. Online travel platforms including Booking.com and Expedia are signing partnership deals with AI companies to defend against being bypassed by AI agents.

IN MEDIA NEWS…

• Rupert Murdoch resolved the matter of his succession by handing over his media empire to his eldest son, Lachlan, after buying out three of his kids for $3.3bn. They will give up their ownership interests in News Corp and Fox for a cool $1.1bn each.
• IN ADVERTISING – TV companies are getting increasingly concerned about the potential affect on ad revenues if Trump cracks down hard on direct-to-consumer drug advertising. At the moment, the pharmaceutical industry accounts for about 20% of all TV news advertising.
• IN SOCIAL MEDIA – some former Meta employee whistleblowers made some very concerning allegations in front of a Senate judiciary sub-committee that Meta made efforts to hide worrying internal research on the safety of kids using their VR products.

IN TELECOMS NEWS…

• SpaceX paid $17bn for the rights to use some of EchoStar’s spectrum for cellphone service. It will use the domestic and international rights to send out signals from space! SpaceX is already becoming a bigger broadband provider via its Starlink business and has thus far flirted with the mobile phone sector thanks to a US partnership with T-Mobile. This makes a lot of strategic sense and will really throw the cat among the pigeons with existing providers. This is particularly amazing for EchoStar considering that it was facing bankruptcy just 18 months ago!

IN EV NEWS…

• Stellantis announced that it had decided to ditch its deadline of making only EVs by 2030. Interestingly, European Commission president Ursula von der Leyen is due to meet automotive industry leaders this week to talk about a relaxation of the 2035 EV deadline.
• Beijing has called for the EV price war among China’s 129 car makers to end and it’s also pushing them to pay suppliers within 60 days, something that BYD will be particularly impacted by. Ironically, BYD has also been behind a lot of the price pressure as well.
• State-owned Chinese car firm Changan is going to launch in Britain. It’s first model will be Model Y rival that will undercut it by about £5,000 and is called the Deepal SO7. It’s the first of six models that it plans on launching in the UK.

IN BATTERY NEWS…

• The UK is facing a growing problem of a mounting stockpile of used EV batteries. According to estimates by battery start-up Altilium and its partner recell.store up to 90% of the roughly 23,500 batteries that have reached the end of their life in the UK are actually in storage. Recycling these batteries is going to be huge as time goes on – and although it has proved to be too expensive thus far, we’re getting to the stage that it’s becoming more commercially viable.

IN RETAIL NEWS…

• In China, Miniso is trying to replicate the success of Pop Mart’s collectable Labubu dolls with a new range of Wakuku dolls. It’s hired nine artists to produce designs and develop their own characters. The runaway success of Labubu dolls has powered Pop Mart’s growth to the extent that it’s now bigger than Mattel and Hasbro combined!!! No wonder they want a piece of the action! Will others have a go as well??
• Zara-owner Inditex saw its sales lose momentum over Q2 thanks to the impact of tariffs and a strong US dollar. On the plus side, it has seen an uptick in recent trading.
• Primark’s owner, AB Foods, reported mixed results and warned of a tricky outlook for consumer confidence in Europe which is already hitting sales.
• Losses at the John Lewis Partnership over the first half of the year almost tripled thanks to restructuring costs and new tax and regulatory charges. It said that it expected the “macroeconomic environment to remain challenging” but was increasing investment to put it in a position where it could “deliver full-year profit growth”.
• M&S’s chief digital and tech officer resigned having only been in the job for just over a year. She had pointed out M&S’s weaknesses when she joined but I guess that someone had to take the fall for the major hacking attack it endured.

IN LEISURE NEWS…

• IN AIRLINES NEWS – Southwest Airlines, which has been the only US carrier that guarantees a second seat – free of charge – to those who don’t fit into a single one, is going to restrict this benefit from January 27. It’s unclear as to how much this will impact the company, but it’s also slimming down its operations by shedding 15% of its corporate workforce and ending its longstanding policy of two checked bags free with every ticket.
• IN RESTAURANTS NEWS – Domino’s is launching its new Chick ‘N’ Dip brand across 187 stores in the northwest of England and Northern Ireland after over a year of development. The range has been developed to work in the ovens of Domino’s existing kitchens which means that it’ll be able to use its existing infrastructure. Sounds like a decent idea! Meanwhile, Pret A Manger is planning a stock market flotation, but it’s not sure yet of whether it will do so on the LSE or elsewhere. At the moment, it’s testing a “meal deal” format to see whether this will boost its profits.

• IN REAL ESTATE TRENDS – firms are finding that they downsized too much under Covid and are now finding it difficult to get office space. The problem is that there is a lack of available properties as many companies overestimated how long the WFH trend was going to last. IN RESIDENTIAL PROPERTY, Londoners are buying the lowest share of property outside the capital since 2013, according to the latest research from Countrywide. This is thanks to a stagnant local market and the switch back to office working. The property market is also slowing down because people are getting increasingly jittery ahead of Reeves’s Budget. That being said, the UK’s biggest housebuilder (Vistry) was quite upbeat about its prospects despite seeing a drop in first half profits. Recent data from Moneyfacts showed that buy-to-let borrowing costs have fallen to a three-year low as lenders have doubled the number of products on offer to attract landlords’ business. Budget worries may dampen things for the moment, but if landlords come back this could help renters!
• IN PHARMACEUTICAL NEWS – Novo Nordisk is planning to cut 9,000 jobs and has slashed its profit forecasts. The Ozempic and Wegovy maker is cutting its headcount by a whopping 11% as it continues to lose ground against US rival Eli Lilly. US drug maker Merck decided to ditch plans to build a new lab in London and is laying off 125 scientists as a result. The site is already under construction and was scheduled to open in two years’ time. This is a real blow to Starmer’s life sciences ambitions.
• Hargreaves Lansdown and Schroders are to offer private markets to the masses by offering two long term asset funds. They will give customers access to unlisted investments via self-invested personal pensions for the first time.
• Law Society figures show that Britain’s legal services trade balance jumped by more than 50% while UK legal exports increased by around 44% over the last four years. The main markets were the EU and US.
• US retail coffee prices had their steepest year-on-year rise this century and Trump’s recently-imposed tariffs on Brazil are about to make things much worse. Global coffee markets boomed over the past year thanks to poor harvests in major exporting countries hitting production.

Yes, I know it’s a bit mushy of me, but my fave video this week was by far the one with the reaction of the baby on the piano to his (?) dad playing piano 😍!

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 and Putin scheduled a meeting for Friday in Alaska and there was talk that Russia would “propose a West Bank-style occupation of Ukraine”, something that Baltic country leaders warned against. Trump has no Russia specialists advising him and the bulk of what’s been done so far is via his mate Steve Witfoff, who is a real estate developer. Putin, on the other hand, is an old campaigner noted for his skill at negotiation.
• France, Germany and the UK indicated their willingness to reimpose sanctions on Iran unless the country engages in negotiations with the US and the international community about its nuclear programme by the end of August 2025.

IN DEFENCE NEWS…

• Europe continues to up production of arms and defence equipment and the Porsche holding company is looking to expand into defence and related sectors via a specific fund while Rheinmetall is already doing well from the huge increase in defence spending.

IN TARIFF NEWS…

• Trump announced an additional 90-day pause on China tariffs, presumably because the Chinese have a very strong negotiating position! The deadline is now November 10th.

IN TRUMP THINGS…

• The president took control of the city’s police force and deployed 800 National Guard troops in Washington, citing “a public safety emergency”. He felt compelled to do this because of what he described as “a situation of complete and total lawlessness”.
• In Trump’s ongoing campaign against current Fed chief Jay Powell, he said that he has “three of four” candidates in mind to replace him and hinted that he’d name the candidate before the end of Powell’s tenure, essentially rendering the Fed chief powerless. If the president installs “an inflation nutter”, risks of higher inflation and a weaker dollar increase.
• Staying on the subject of Trump picking people for key roles, he’s selected “highly respected” economist EJ Anotni from the rightwing Heritage Foundation thinktank to replace the head of the Bureau of Labor Statistics that he fired recently.
• Trump softened his stance on the Intel chief, who he initially said should be sacked for his links to China. Intel’s share price jumped as the market got excited about the prospect of Intel doing some kind of deal with the government.
• Trump’s move to open up 401k retirement plans to crypto and private equity investments got closer as the Labor Department rescinded 2021 guidance that had prevented it but it is worth saying that with greater potential rewards come greater potential risks.
• Companies involved in executing Trump’s anti-immigration measures are doing very well. Palantir, Geo Group and CoreCivic are just some who are making a lot of money – and they’re probably going to make more given that the BBB gave ICE $45bn to play with…

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – inflation held steady in July but then US producer prices showed an unexpected jump as the impact of Trump’s tariffs fed through to higher costs of goods and services. Is this just the beginning of the tariff impact coming through?
• IN THE UK – we heard that exports to the US fell to their lowest level since 2022 as almost a third of UK businesses that export to the US said that they’d been affected by US tariffs and are now bracing themselves for higher costs. UK GDP grew by 0.3% in the three months to June, which was  worse than the previous quarter but not as bad as everyone had been expecting. The chancellor got some good news this week in that the latest HMRC data showed that fears of a mass exodus of non-doms proved to be unfounded while a report from the Centre for the Analysis of Taxation suggested that an IHT clampdown won’t prompt a mass sale of family farms – although a separate report by Arla said that 13% of dairy farmers said they’d quit within a year, putting the nation’s food security at risk. Meanwhile, UK prices for Eli Lilly’s Mounjaro are going to rise by up to 70% from September 1st as pharma companies bend to Trump’s demand that drugmakers should cut prices for American patients and put prices up in other countries.

IN COMMODITIES NEWS…

• OIL – The likes of BP, Chevron, ExxonMobil, TotalEnergies and Shell are among those now putting more effort into seeking out new oil and gas reserves as momentum for the clean energy transition wavers as momentum for fossil fuels gathers pace.
• RARE EARTHS – Chinese authorities are now deliberately limiting export volumes of rare earths to prevent stockpiling by western companies. It clearly wants to maintain its massive advantage here!
• GOLD – Trump confirmed that gold imports will not face US tariffs, clearing up some initial confusion about whether they’d be taxed or not.
• BUTTER – prices are at all-time highs currently – which is bad news for bakers and particularly those who make croissants!!! This is down to falling milk supplies and the tendency for dairy processors to prioritise cheese-making (because the by-product is whey protein, for which there is huge and rising demand!).

IN ENERGY NEWS…

• NUCLEAR – Energy developers Terra Innovatum, Terrestrial Energy and Eagle Energy are looking to raise over $500m via mergers with SPACs to accelerate the development of their SMRs.
• WIND – Ørsted announced poor results, which pushed its valuation down to all-time lows. The value of its US projects has plummeted, which isn’t going to help the prospects for its $9.4bn equity raising. Meanwhile, research from energy analytics firm Montel shows that Scottish wind farms were paid not to produce 37% of their output over the first half of this year because of grid constraints. This just highlights shortfalls in our grid system! Shocking!!!
• GENERALLY – Tesla is applying to launch a household electricity supplier in GB sometime in the next few months as it has formally applied to Ofgem for an electricity supply licence. If granted, Tesla would be able to provide electricity to domestic and business premises in England, Scotland and Wales next year! It is expected to be branded Tesla Electric.

IN CRYPTO NEWS…

• Bitcoin reached a new high of $124,480 but then pulled back on signs of strong US inflation. Still, Bitcoin’s value has increased by 26% so far this year.
• Trump’s World Liberty Financial is going to set up a crypto treasury business with blockchain company ALT5 Sigma Corporation, which trades on the NASDAQ. Crypto treasury companies sell debt or shares and use the money to buy crypto.

IN BUSINESS TRENDS…

• The latest data from BDO shows that UK manufacturers’ confidence hit a nine-month high in July thanks to Trump’s tariffs not being as bad as manufacturers had originally thought.

IN INVESTMENT NEWS…

• The latest Bank of America survey showed that investors are buying up emerging market stocks because they are being seen as undervalued. On the other hand a whopping 91% of fund managers said that US equities were overvalued.
• In the UK, seven UK local authority pension funds look set to combine assets with a bigger fund manager called Border to Coast. This is all part of a broader plan by the chancellor to create fewer managers with bigger financial clout.
• Saudi Arabia’s PIF made an $8bn writedown on the value of its holdings in gigaprojects – including Neom! Its finances are being hit by cost overruns and weaker oil prices. The PIF owns five gigaprojects which are part of wider plans to diversify the kingdom’s income away from oil.
• IN M&A – China is creating the world’s biggest shipbuilder by merging two state-controlled shipbuilders – China State Shipbuilding (CSSC) and  China Shipbuilding Industry – in a deal worth $16bn. The enlarged company will have a single listing on the Shanghai Stock Exchange. Brussels approved the €4.1bn acquisition of Just Eat Takeaway by Prosus, Centrica bought a £1.5bn gas terminal – Europe’s biggest gas import terminal – in a sign of ongoing commitment to fossil fuels (well it is a gas company!) and Canadian t-shirt maker Gildan got closer to buying US underwear maker Hanesbrands.

IN EMPLOYMENT TRENDS…

• The latest KPMG-REC monthly survey showed that falling demand for workers is hitting wages. Vacancies also dropped at their fastest pace since April last month.
• The latest data from the ONS showed that UK employers have been cutting back on bonuses and hiring over the last few months thanks to economic uncertainty. This was also reflected in a dramatic fall in profits at agency recruiter PageGroup.

IN BANKS NEWS…

• HSBC voiced concern about its commercial property loan book as Hong Kong’s prime office rents have dropped by over 20% since 2022 and vacancy rates have hit record highs of around 19%! It said that 73% of its commercial property loans are risky. This figure was less than 30% just a year ago!
• Santander became the latest one to relax lending rules to allow homebuyers to get a bigger mortgage. Now applicants earning £100,000 or more can now borrow up to 5.5 times their income with a deposit or equity of up to 10% of the home’s value!

IN INSURANCE NEWS…

• Admiral has decided to put aside £50m to settle claims that it undercompensated customers for car claims. It’s not the only insurer to do this but it’s the first one to acknowledge its shortcomings and others are expected to follow.

IN FINTECH NEWS…

• Klarna’s loss has widened over Q2 ahead of its much-anticipated New York listing. Klarna is keen to tap into current market feelgood – and who could blame it! It has been trying to move away from its BNPL roots to morph into becoming a neobank offering debit cars, interest-bearing loans and the whole shebang.

IN CONSUMER TRENDS…

• The latest BRC-KPMG figures highlighted a better-than-expected July for spending as clothing and homeware sales were up. A similar conclusion was drawn from the latest figures from Barclays as shoppers spent on affordable luxuries.
• Consumers were not, however, spending money on home improvements according to Marshalls, a specialist in pavements, pavoirs and roofing. The company announced an unexpected profit warning last month.

IN RETAIL NEWS…

• River Island managed to avoid collapse as a High Court judge approved its restructuring plan.
• Topshop looks like making a high street comeback as there are plans for new physical stores. Asos bought it back in 2021.
• Troubled fashion accessories retailer Claire’s has appointed administrators in UK and Ireland just a week on from its parent company filing for bankruptcy in the US and Canada. This is obviously a great shame for those involved.

IN CONSUMER GOODS…

• Birkenstock put in a strong sales performance over the quarter, which possibly casts doubt over Crocs’ doom and gloom last week when it said that the “ugly shoe trend” looked like it was coming to an end.

IN LEISURE NEWS…

• IN TRAVEL – Tui said that tighter border rules are putting European visitors off going to the US. Despite this. the company posted market-expectation beating pre-tax profits and was confident enough to upgrade its full-year profit guidance.
• IN RESTAURANTS – Pasta Evangelists announced plans to open 100 new restaurants, creating up to 1,500 jobs. Will this become the next “Jamie’s Italian” or “Carluccio’s”?? The world’s biggest pasta producer, Barilla, has a majority stake in the company (which it bought for £40m) so the restaurant chain is certainly well financed.
• IN GAMBLING – the CEO of gambling company Entain whinged about punters going to the black market to gamble if the government taxes it too much. I don’t think anyone would be surprised about this reaction!

IN CHIP NEWS…

• Nvidia and AMD are going to pay away 15% of the revenues they get from selling chips to China to the US government as part of the deal for them to keep selling into the China market. Trump also sounded more open to the idea of Nvidia selling more advanced AI chips to China but Beijing is not so keen and is asking tech giants like Alibaba and ByteDance to justify why they’re using Nvidia chips and not domestic alternatives.
• Although Apple managed to avoid a 100% chip tariff, it did so by pledging a huge chunk of money to increase production in the US. However, smaller vendors and suppliers just don’t have the same ability to do this so they look like they’ll be hugely impacted because they don’t have the same ability to promise huge investment in US production.

IN AI NEWS…

• South Korean AI start-up Upstage has caused a stir because it has produced an LLM that performs on a par with more advanced and expensive LLMs made in the US and China. It has become the only Korean LLM to be classified as a leading edge “frontier model” by the benchmarking analysis provider Artificial Analysis.
• Anthropic has offered the Claude chatbot to US lawmakers for $1! It’s thought that this will encourage the wider adoption of AI tools in the federal government. OpenAI already has such an arrangement in place and it’s thought that Google is also looking to do something similar.
• Perplexity AI has seemingly made a $34.5bn offer to buy Google Chrome’s browser. This sounds somewhat bizarre given that the whole of Perplexity AI itself is only worth half that! It said that it has the finances in place but you do wonder…
• Musk is threatening to sue Apple because it keeps putting ChatGPT ahead of Grok on the download charts. I think this is just noise because less than 24 hours before this he was celebrating Grok hitting #1 in Apple’s download charts in Singapore.
• Sam Altman and OpenAI announced plans to invest in a venture called Merge Labs that will connect human brains with computers, in competition with Musk’s Neuralink. Sounds interesting, no??
• DeepSeek’s next AI model has been delayed because it’s trying to use Huawei chips and not Nvidia’s. There have been a lot of technical problems as a result.
• CoreWeave’s shares collapsed by 20% in reaction to it posting bigger-than-expected Q2 losses. That being said, the company said that demand for its services is running ahead of its ability to build fast enough.

IN MEDIA NEWS…

• Paramount sealed a $7.7bn exclusive US rights deal with UFC for seven years to be the US broadcaster of the UFC slugfest.

IN SOCIAL MEDIA NEWS…

• TikTok is going to shut down its Berlin moderation team and replace them with contract workers and AI. Workers are now, understandably, striking. Is this the sign of things to come, though?

• IN REAL ESTATE DEVELOPMENTS – HSBC has decided to reverse its decision to quit Canary Wharf. It’s just signed a 15-year lease for an office that’s a short walk away from its current global HQ, which it will leave in 2027 to relocate to the City. The latest RICS survey showed that the residential property market is cooling down as the prospect of tax increases and uncertainty over interest rate cuts weighs on prospective buyers. Posh estate agent Savills piped up, adding that inheritance tax raid fears are also hitting house sales. Meanwhile, a merger between student accommodation players Unite Group and Empiric was announced this week. It comes after a tricky few years in a sector that has been particularly badly impacted by the pandemic and the rise in construction costs.
• Tesla is looking to introduce robotaxis in New York. It’s keen to roll out its robotaxi service in America’s most populated city and is recruiting data collectors to drive vehicles around the streets. The drivers will collect audio and video to train Tesla’s Autopilot software.

My favourite video this week was, obviously the one with the only four things you will ever need for a top notch video – an old man, a guitar, a dog and some false teeth 😁 Superb 🤣🤣🤣

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 TARIFF NEWS…

• Switzerland got slapped with an unexpected 39% tax from the US which hit share prices of Swiss companies the following day. There were some last-minute attempts to escape the worst of the tariffs but Switzerland and Taiwan failed to get any concessions before the Thursday deadline when the reciprocal tariff regime came into force. US import taxes are now at their highest level in a century!
• India was hit by an additional 25% tariff as punishment for buying Russian oil. India has taken a third of its crude oil imports from Russia and it has been the biggest market for Russian Crude since 2023, importing 50% more than China.
• Trump then threatened a massive 100% tariff on chips but Apple got an exemption from this (presumably because he promised to invest an additional $100bn in the US over the coming years).

AND IN TERMS OF IMPACT…

• Over 60 countries are now scrambling to respond to the new tariff regime. South Africa is just one such country suffering as its wineries were hit by a 30% tax. The US has been their fourth biggest market after the UK, Germany and the Netherlands.
• However, this is also hitting Americans – particularly those in the lower quartile of earners – while consumers generally have been front-loading expenditure before the tariffs really kick in.

IN TRUMP THINGS…

• The president moved to appoint a new governor for the Fed to replace the one that resigned last week and he’s also on the hunt for a replacement head of the Bureau of Labor Statistics who he sacked last week. That sacking has continued to spook investors because it will shake trust in the independence of official US data although there is something to be said for an overhaul of the BLS as the labour stats have a lot of holes.
• It looks like JP Morgan Chase and Bank of America could be getting a hazing from Trump as he hinted at getting his own back on them for snubbing his business in the wake of the Capitol Hill riots. It is thought that the White House is putting together an executive order to make regulators investigate banks that unlawfully discriminate against customers.
• Meanwhile, it looks like his MAGA congressional election war chest is looking pretty healthy thanks to big donations mainly from crypto companies and big tech investors. It’s built up $200m in funds versus a paltry amount raised by the Democrats.

IN INDIVIDUAL COUNTRY NEWS…

• The Bank of England cut interest rates by 0.25 percentage points to 4%, its lowest level since March 2023. However, the vote was so tight that it had to be done twice – the first time this has happened in its 25 year+ history, reflecting rising inflation concerns. There had been talk that the Bank will need to cut rates six times over the next year to help stimulate the economy but that’s clearly not a given now.
• NIESR reckons that the chancellor’s going to have to raise taxes in the autumn Budget to cover the £40bn deficit and it looks like the government’s going to start “soft-pitching” tax rises to us from September to gauge what is possible and perhaps least unpopular. Gambling levies look like a dead cert as an initial target. Pun intended.
• Inner London boroughs and the south of England looks to lose out from English council funding reforms, according to research from the IFS. On the positive side, councils in the Midlands and north should do well from it.
• Data from S&P Global Market Intelligence shows that UK construction activity in July dropped at its sharpest rate since the height of Covid thanks to labour shortages and other macroeconomic headwinds both domestically and abroad. This is going to make it even more difficult for the government to hit its target of building 1.5m new homes.

IN COMMODITIES NEWS…

• IN OIL – OPEC+ raised oil production quotas to a two-year high. Meanwhile, BP made its biggest oil and gas discovery in 25 years off the coast of Rio de Janeiro and São Paulo. On the other hand, it announced that it would launch another review of the business that could cut out at least 15% of its office staff.
• IN OTHER COMMODITIES – China is continuing to restrict the flow of critical minerals to Western defence manufacturers, in a flex over its dominance in this area.

IN CRYPTO NEWS…

• Former chancellor George Osborne, who is a member of the global advisory council of Coinbase, warned that the UK could fall behind in the crypto evolution because it’s too risk averse. It’s true that crypto does require a leap of faith but what Osborne says should be taken with a big pinch of salt given his involvement in Coinbase.

IN BUSINESS TRENDS…

• The end of the de minimis rule is spooking not just the likes of Temu and Shein, but other companies like Etsy who are now going to face much higher costs. The closure of the loophole is going to happen on August 29th versus the previously stated July 2027, so this is understandably causing a lot of panic!
• The UK services sector saw its biggest fall in orders since November 2022. This is serious because it is the UK’s main GDP growth driver!
• The FT did a study using Companies House filings which shows that there’s been a significant uptick in top company execs leaving the UK as 3,790 company directors reported leaving between October’s Budget and last month versus 2,712 in the same period a year earlier. The theory is that rich people are leaving the UK because of a combination of the ending of the non-dom status, restricting inheritance tax relief on businesses, increasing capital gains tax and raising duties on private equities bosses brought in by the government.

IN INVESTMENT TRENDS…

• FUNDING ROUNDS – OpenAI got another $8.3bn in its latest funding round while, on a smaller scale, Mistral AI secured enough money its its latest round to give it an implied valuation of $10bn. The money keeps pouring in after that DeepSeek blip at the beginning of the year! OpenAI-backed drug discovery start-up Chai Discovery raised $70m at its latest funding round giving it an implied valuation of about $550m.
• RETAIL INVESTORS – Trump signed an executive order to allow the $9tn US retirement market access to crypto, private equity and other alternative investments including property deals. Regulators will now overhaul existing rules to give US savers access to these categories of investment for 401k retirement plans. This is a huge development for investment as a whole and will enable individuals to take on more risk if they want to. Meanwhile, UK investors have been buying gold coins in record numbers, which makes sense in these uncertain times as bullion coins are exempt from capital gains tax, hence the popularity!
• M&A – US battery start-up is buying Northvolt out of bankruptcy, cryptocurrency group Ripple is buying stablecoin platform Rail in a $200m deal and big companies are telling investment banks they want fewer staff working on deals because the FCA found that almost 40% of takeovers of UK-listed companies had been reported before their official announcement between April 2024 to the end of May this year!
• IN ADDITION – Eric and Donald Trump Jr are now backing a new SPAC, called New America Acquisition I Corp, that will focus on US manufacturers that will benefit from government spending. How useful that their dad also happens to be president and is well-placed to know who’s going to get the contracts…

IN AI GENERALLY…

• Brookfield Asset Management has signalled its intention to increase its bets on AI by executing a strategy that will involve the development of data centres, chip storage and other AI-related infrastructure.
• AI continues to attract more investment because there’s increasing evidence that all the billions being poured into AI are actually now starting to yield actual returns in the form of revenues.
• Meanwhile, Apple has become a bit of a contrarian trade in that it is a notable absentee from all the AI hype. Although it has a reputation as being a bit slow initially and then clearing up with a better product, that may be more difficult to do for Apple.

IN COMPANY-SPECIFIC NEWS…

• OpenAI released its first open AI models since the launch of ChatGPT in an effort to fight back against rising competition from DeepSeek and others but then followed that up with releasing its new GPT-5 model which has been billed as a “major upgrade”. OpenAI’s valuation is looking very heady currently, particularly on traditional valuation metrics, but everyone’s buying it because it is at the cutting edge of the next industrial revolution.
• Palantir continues to boom and it upgraded its 2025 outlook thanks to the ongoing impact of AI. The group sells AI software that collates and analyses data to businesses and governments around the world.
• UK cybersecurity company Darktrace, is looking to boost its expansion into the US as part of a broader effort to reach $1bn in revenues so that it can better compete with bigger rivals like Palo Alto Networks and CrowdStrike.
• Nintendo’s profits climbed thanks to the popularity of its new Switch 2 console which is selling well despite the price tag.

IN MEDIA NEWS…

• News Corp earnings rose for Q4 thanks to growth in its Dow Jones and Digital Real Estate Services divisions. There was nothing forthcoming about what might happen as a result of the recent spat between Rupert Murdoch and Trump regarding the whole Epstein thing that was sparked by an article that appeared in the Wall Street Journal, just one of the publications owned by News Corp.
• The NFL is taking a 10% stake in Disney’s ESPN in exchange for control of specific media assets including NFL Network. This is good for ESPN because it deepens its relationship with its most important content provider. Meanwhile, Disney’s profits eclipsed market forecasts thanks to strong performances by its US theme parks. Its traditional TV networks saw revenue declines but streaming was good.
• WPP announced a strategic review and halved its dividend ahead of its new CEO joining next month. There’s a lot of work done!

IN CONSUMER TRENDS…

• British tourists are shunning European summer breaks and delaying them to the cooler (and cheaper) September to November months, according to the European Travel Commission, but when Brits do go to Europe, they splash out on VAT-free shopping – something that’s quintupled over the last four years!
• Luxury brands continue to feel the pinch as tourist spending overall in Europe and Japan is disappointing.

IN RETAIL NEWS…

• Claire’s filed for bankruptcy in the US for the second time in seven years thanks to the slowdown in consumer spending and more people shopping online. The US retailer has over 2,700 outlets in 17 countries.
• Morrisons revenues dropped by £1bn to their lowest level since the supermarket was taken over by a PE firm in 2021. Morrisons is in the UK’s “Big Four” supermarkets group but it’s on the cusp of being overtaken by Lidl. The CEO moaned about macro circumstances but let’s be honest, everyone’s faced the same issues – it’s just that they’re dealing with them better than Morrisons is…

IN CONSUMER GOODS…

• The new interim CEO of Diageo increased cost-cutting targets whilst also announcing a bigger-than-expected hit to profits from US tariffs this year at its full year results.
• Crocs’ share price collapsed by almost 30% in trading yesterday thanks to very downbeat sales guidance along with its opinion that the “ugly shoe” trend is coming to a close.

IN LEISURE NEWS…

• IN ACCCOMMODATION – InterContinental Hotels reported a big jump in profits thanks to having more rooms to offer weary travellers! It seems to be cautiously positive about the outlook. Airbnb had better-than-expected Q2 results but expressed worries about the effect of new tariffs whilst already having committed to investing $200m in new services and experiences.
• IN RESTAURANTS – McDonald’s sales rebounded after four previous quarters that had been on the downward trend! Interestingly, the CEO noticed that while lower-income customers were visiting less, middle-income customers are visiting more.

IN “TRAD” AUTOMOTIVE NEWS…

• Honda’s quarterly profits halved thanks to Trump’s tariffs and policies. This is all they need given the nightmare they’ve been having.
• India’s Tata Motors went through with its $4.36bn all-cash purchase of Iveco’s commercial vehicles business. This deal is almost double the size of its previous biggest acquisition – the $2.3bn purchase of Jaguar Land Rover in 2008!  Talking of which, Tata Motors’ CFO joined JLR as its new CEO.

IN EV NEWS…

• Tesla offered Musk a massive $29bn-worth of shares as a bonus that is part of an interim 2025 pay award that will vest in two years’ time. Clearly they want him to stay even though Tesla’s UK sales dropped by a whopping 60% in July.

IN DRIVERLESS NEWS…

• Tesla was ordered to pay $243m in damages to victims of a fatal accident that involved its autopilot system. This is the first federal case to find Tesla responsible for an accident involving its self-driving software. Other similar allegations have been settled out of court in the past, so you wonder whether more cases are going to crop up. Tesla will, unsurprisingly, appeal the decision.
• Baidu, the Chinese internet search giant, stated that it was planning to test self-driving Apollo Go taxis in the UK and Germany starting in 2026 as part of a deal with Lyft, one of Uber’s rivals. Baidu already operates ride-hailing operations in China.

• IN FINANCIALS NEWS – European bank shares hit their highest levels since 2008 thanks to historically high interest rates and it’s possible that this momentum could continue because there’s still upside to be had from investment banking and governments are going to be borrowing more in order to finance infrastructure and defence spending. British banks are going to have to pay compensation for dodgy car-financing, but investors were relieved that the impact isn’t going to be as big as had been feared previously. High street banks have lost £100bn in deposits as more UK savers are shifting to online rivals while Santander’s purchase of TSB has been approved. No doubt branch closures and job losses will follow…
• IN PHARMACEUTICALS NEWS – sales of Novo Nordisk’s diabetes drugs, including Ozempic, have been slowing sharply because Eli Lilley’s Mounjaro is taking more market share because it’s more effective but Eli Lilley’s test results for its new obesity pill were disappointing.
• Bupa profits jumped by 20% thanks to people getting tired of ever-growing NHS waiting lists and demand for elderly care.
• Holiday jobs are in jeopardy as increased hiring costs have hit temp recruitment because employers want to give their permanent staff preferential treatment in terms of hours and they can’t afford casual staff as much as they used to.
• Visa is in talks to move its European HQ to Canary Wharf – which is good news. There had been talk of a mass exodus from the area, but it’s not all bad…
• Uber reported a major jump in operating profits but investors were more worried about the company’s insistence on pouring a lot of money into robotaxis. One day I am convinced this is going to make money – but not for a while yet!!!
• Miner Glencore decided not to change its London listing for New York after all, having conducted a formal review. The LSE will be very relieved about this!
• Services giant Serco saw its share price hit an 11-year high thanks to the government’s boost in defence spending. Serco gets 40% of its revenues from defence!
• Construction equipment manufacturer Caterpillar reported a drop in earnings and cited a hit of up to $1.5bn courtesy of Trump’s tariffs. Caterpillar is seen as a bellwether for industrial activity, so this is serious.

My favourite video this week was, without a doubt, this fabulous version of The Spice Girls’ “Wannabe”. I actually prefer this to the original 🤣

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 TRADE NEWS…

• The US and EU reached a tariff agreement of 15% on imports to the US but Germany and France weren’t too happy because they said it would damage the bloc’s economy – and European share prices fell as a result. Trump also announced 15% tariffs on imports from South Korea, putting them on the same rate as Japan.
• The US extended the tariff deadline for China until 12th August and for Mexico for 90 days whilst announcing that reciprocal tariffs would come into force from Friday 8th August for 68 countries plus the EU.
• Trump shocked everyone again by suddenly announcing 25% tariffs on India, but then he posted on Truth Social that negotiations were still ongoing.

IN TRUMP THINGS…

• Trump’s administration continued the crackdown on financing international organisations – and it’s now looking to defund the OECD, the organisation that most recently led the push for global tax rates.
• The president also threatened pharmaceuticals companies, saying that they should “not offer other developed nations better prices for new drugs than prices offered in the US”. Ultimately, this probably means that the NHS is going to have to pay more for the drugs it buys.
• Trump then told Starmer, while he was in the UK, to cut taxes and curb immigration in order to beat Farage.

IN REGIONAL/COUNTRY  NEWS…

• GLOBAL – The IMF upgraded its global growth forecasts as the initial extremes of Trump’s tariffs threats tempered.
• IN THE US – the Fed left interest rates unchanged despite the White House pushing for interest rates to be lowered to 1%. Mind you, two members of the rate-setting committee voted against the majority decision to keep rates unchanged – the first time that more than one member has done so since 1993. If Trump gets his candidate in the Fed, we can see the way this is going to go…
• IN CHINA – the government announced its first nationwide programme of childcare subsidies as part of a concerted effort to encourage its citizens to have more kids. Families will get a $503 subsidy per year from the government for each child under the age of three, which will apply from January 2025, although families with kids born between 2022 and 2024 will also be able to apply for partial subsidies. Separately, China has increased its use of “exit bans”, where it has been stopping Chinese nationals and foreigners from leaving the country. No explanations are given, no help is available and the first time a lot of these people get a whiff of it is at airport customs.
• IN THE UK – the IMF upgraded UK growth forecasts, making us the fastest growing European economy in the G7 but also warned that the worst consequences of trade protectionism are yet to come. Doubt has been cast about the veracity of all those millionaire migration numbers that the government is using and the HRMC raked in a record £6.7bn from inheritance tax receipts thanks to a freeze on the 40% threshold and a streamlining of the various reliefs.

IN COMMODITIES NEWS…

• Trump caused panic in the copper market when he threatened a 50% tariff on copper, but then it turns out this was on copper products and not the raw material itself.
• Rio Tinto announced its weakest H1 profits for five years thanks to a big drop in the iron ore price. This is painful for Rio Tinto because iron ore is its biggest income generator.
• The World Gold Council reported that gold demand has boomed as the precious metal continues to be seen as a hedge against economic and geopolitical risks.

IN RENEWABLES NEWS…

• The UK’s biggest offshore wind farm was granted planning permission off the east coast of Scotland after 31 months of discussion. Objections had been raised because of dangers to local seabirds. The electricity generated by Berwick Bank could power 6m homes a year.

IN CRYPTO NEWS…

• JP Morgan announced a crypto trading partnership with Coinbase whereby the former’s customers will be able to connect their bank accounts to their Coinbase wallets starting from next year, enabling them to trade crypto. They will even be able to use their credit cards to trade crypto via Coinbase from this autumn.
• In crypto trends, companies are continuing to load up on crypto in order to pump up their valuations, but they’re not just buying bitcoin these days! Bitcoin still outperforms other tokens considerably, though…meanwhile, crypto lenders are getting more confident after a tricky few years surrounding the collapse of FTX. They are offering crypto-backed unsecured loans to customers who are avoided by traditional banks – sounds like the recipe for a nightmare to me! Similarities are being drawn between the way crypto is being pushed now and the rise of CDS trading that led to the financial crisis of 2008. I guess the difference between now and then was that CDSs didn’t have presidential backing!

IN BUSINESS TRENDS…

• A report from Begbies Traynor, the corporate restructuring specialist, suggested that 50,000 British companies are on the verge of collapse thanks to the cumulative effect of higher taxes and global economic turmoil. Bars and restaurants were the worst hit sectors, followed by travel and tourism.
• The latest survey by the Institute of Directors shows that British execs are more pessimistic about the prospects for the UK economy now than they were after the Brexit referendum, the start of the pandemic and in the wake of the Truss-Kwarteng mini-budget. Over 80% of business leaders surveyed in July said that they were “very” or “quite” pessimistic about the outlook for the next year.

IN INVESTMENT TRENDS…

START-UPS…

• German AI start-up n8n is in the middle of securing new funds at a valuation equivalent to over $1.5bn as it tries to tap into growing investor interest in European AI prospects. n8n automates workflows using AI. This is amazing considering it “only” had an implied valuation of around €300m at its last funding round just four months ago!
• Investment group Iconiq Capital is leading a $5bn funding round for AI start-up Anthropic that will give Anthropic a massive $170bn valuation, triple the amount it was valued at just four months ago!

M&A…

• Oilfield services company Baker Hughes is closing in on a $13.6bn all-cash acquisition of Chart Industries to improve its capabilities in LNG, nuclear energy and data centres in addition to boosting its rapidly-growing industrial and energy tech division. Chart had been in negotiations with Flowserve, but that merger would have been an all-paper deal, so you can see why they jumped at the Baker Hughes offer!
• Palo Alto Networks agreed a $25bn takeover of CyberArk Software in the latest example of consolidation in a fragmented sector.
• Iveco sold its defence business to Italian defence group Leonardo and its truck, bus and industrial power train units to India’s Tata Motors as Iveco continues its move away from the automotive sector.
• Canadian investment giant Brookfield put in a £2.4bn offer to buy retirement specialist Just Group in the latest merger to happen in the financial services sector. It really does seem like confidence is picking up!
• Chinese e-tailer JD.com launched a €2.2bn all-cash takeover bid for German electronics retailer Ceconomy in what could potentially be one of the biggest acquisitions by a Chinese company of European company in recent years.
• Next bought the brand rights to insolvent maternity group Seraphine. It will probably go well with another one of Next’s purchases – its 44% chunk of Jojo Maman Bébé which it bought in 2022.

IN IPO NEWS…

• Design software maker Figma attracted a lot of market interest and saw its share price surge by over 200% on its market debut! IPO confidence is well and truly back!

IN FINANCIALS NEWS…

• IN BANKS – HSBC’s profits slid by 29% in Q2 thanks to restructuring costs and a hit on the value of its stake in China’s Bank of Communications. Restructuring efforts are still ongoing…UBS profits doubled in Q2 thanks to strong trading revenues in equities and forex making up for a a shortfall in its investment banking business.
• IN FINTECHS – Revolut is thinking about buying a US bank in order to speed up the process of it getting a banking licence. Meanwhile, Wise’s shareholders voted to move the company’s primary listing from London to New York and extend its dual class share structure, going against Wise’s former chairman and co-founder. Another nightmare for the London Stock Exchange.

IN TECH…

• Meta’s revenues boomed and it outlined positive expectations for Q3 whilst also continuing to pour money into its AI infrastructure. Zuck is building up a start-up like division within Meta that can be financed by the bigger parent but not be encumbered by it. The lab in which they are working, which is in a separate unit at its Menlo Park HQ, is shrouded in secrecy.
• Microsoft saw its earnings supercharged by demand for its AI services and it said that it will continue with the build-out of AI data centres. It added that it was positive about the outlook for the next quarter. Later in the week it became the second public company to hit a $4tn valuation. It also warned about the impact of AI on jobs and said how white collar jobs were more in danger than blue collar ones.
• Apple announced strong earnings but investors worried about how its supply chain would incur tariffs given that most of it isn’t in the US.
• Amazon had a decent Q2 in terms of sales but the CEO was downbeat about Q3 and warned about high spending on AI and the ongoing uncertainty around Trump’s tariff policies.
• KKR and ECP announced plans to join forces to build a massive data centre to speed up development of AI infrastructure in a $4bn project. They’re splitting the investment and are already building a facility in the ‘burbs of Dallas, which has already been leased to an as yet unnamed tech giant.
• According to a new report from Hays, the mass recruiter, British companies are falling behind overseas rivals in the use of AI. British firms were also particularly lacking in giving their staff training on how to use AI with only 37% offering it versus 50% in America.
• Arm’s share price fell on the NASDAQ following disappointing quarterly forecasts and it is now thinking about designing its own chips in addition to making them for everyone else. Not sure about this given that Arm has been the “Switzerland of chips” in that it has been neutral without a whiff of competition with its clients. That could be about to change.
• VPN usage skyrocketed on Monday (in one case by up to 1,800%!) as the new Online Safety Act came into force, bringing in new age verification rules. The rules have been designed to protect children from harmful materials but it seems they’ve been getting around it by using VPNs!

IN AI…

• China outlined its AI vision at its World Artificial Intelligence Conference in Shanghai. It was much more collaborative than Trump’s “America First” version.
• ChatGPT launched a new “study mode” to encourage better learning practices. Rather than just give you the answer, it guides students through how it got there, which should keep the haters at bay for now.

IN CHIPS…

• Samsung announced a deal worth $16.5bn over the next eight years to make Tesla’s next generation of custom AI chips. This is the biggest deal Samsung’s chip business has ever had from a single customer and although it’s great, Samsung needs more than this to dig itself out of the hole it finds itself in and catch up with rival SK Hynix.
• The Cyberspace Administration of China has summoned Nvidia for “serious security issues” with its newly-OK’d H20 chips. They say that there are “serious security issues” in that that the chips have “location tracking and can remotely shut down the technology”. Nvidia will have to explain its case and provide documentation to support it.

IN CYBER SECURITY…

• Allianz’s US life business was hit by a cyber attack and hackers managed to get access to the personal information of the majority of Allianz Life’s 1.4m US customers and some of its employees on an attack made on July 16th. An investigation is ongoing.
• French submarine-maker Naval Group, which builds and maintains ships and submarines for the French Navy, has also been hacked and the hackers claim to have obtained sensitive data about France’s nuclear submarines. It seems that cyber attacks are generally on the up (or at least more of the hacks are making it into the newspapers at the moment).

IN MEDIA NEWS…

• The latest report from Ofcom says that 20% of Gen Alpha (those born after 2010) turn to YouTube first on their TV while the over 55s have also doubled their time on it. YouTube is now the second most watched TV service in the UK behind the BBC and ahead of ITV. No wonder that the BBC is being told to make more of its content available on the platform! Mind you, in Australia, the government is talking about banning YouTube for the under-16s, adding to the list of banned sites under last year’s legislation. I guess that VPNs will be doing pretty well in Australia as well (if they are allowed!)!
• Spotify posted a net loss for Q2 but managed to add more premium subscribers. It’s seeing an interesting trend at the moment – that video podcasting is growing 20 times faster than audio podcasting! I guess it has had to catch up…

IN SOCIAL MEDIA NEWS…

• There was a very interesting article about something that was highlighted by the whole Coldplay concert scandal – that we shouldn’t automatically believe what we see! Astronomer’s former CEO Andy Byron did not say that he was troubled by “what should have been a private moment [that] became public without my consent”, his wife did not post a tearful statement about it all, Coldplay did not say that it would have camera-free audience sections and the woman standing next to the couple was not another Astronomer employee named Alyssa. We still need proper journalism!!!

IN TELECOMS NEWS…

• It looks like Apple’s going to launch its first foldable iPhone next year. This was an educated guess by analysts at UBS and Apple didn’t comment on it, presumably because if they did the sales of their upcoming iPhone won’t do as well because people will wait for the folding model! Samsung’s been doing these types of phones since 2019!

IN CONSUMER TRENDS…

• The latest data from the BRC and NielsenIQ showed that shop prices jumped again over the last month, with food price inflation being the main driver. Food price inflation was up again for the sixth month in a row to 4%, which is above the three-month average of 3.5%.
• The latest Bank of England data showed that UK households are starting to save more in anticipation of a painful autumn Budget. I think that the chancellor needs to be dropping some big hints about what’s going to be in this thing otherwise everyone’s going to assume the worst and this could be damaging for the economy.
• IN PROPERTY – the latest report from Zoopla said that it’s currently a “buyer’s market” because of a higher number of properties on the market. Although buying interest is increasing because of falling mortgage rates, the number of properties available is taking the edge off the prices. Meanwhile, Bank of England figures show that remortgaging activity has hit its highest level since October 2022 as mortgage rates continue to fall from their peak.

IN RETAIL NEWS…

• IN LUXURY – Chinese luxury names like Laopu, Mao Geping and Songmont are doing really well while a lot of big Western brands are faltering. A case in point is Gucci-owner Kering, which saw sales drop by a whopping 25% in Q2.
• IN ONLINE RETAIL – Temu’s struggling to get back on track in America because suppliers are being told that they can’t undercut prices they give to Amazon. Given this and the closure of the de minimis rule, things aren’t looking good for the Chinese e-tailer…
• ON THE UK HIGH STREET – the Women’s Euros has been a boon to UK pubs, supermarkets and other outlets – and Tesco reckons it’ll see a 15% increase in spending on products related to the Euros in the run-up to the final. Next reported strong quarterly sales thanks to a combination of hot weather and rival M&S’s misfortunes with the hacking. It added to the feelgood by noting strong international sales and by raising its growth forecast for the second half.

IN CONSUMER GOODS…

• Proctor & Gamble said that it was going to increase prices by 5% in the US this year to take some of the edge off an estimated $1bn cost hit from Trump’s tariffs. His tariffs have increased costs for raw materials, packaging and various goods that P&G makes.
• Rival Unilever reported a decent first half performance with a particularly good showing from the ice-cream division, which it’s going to be spinning off. Sounds good, but let’s face it, it is summer so ice cream was bound to do well!

IN LEISURE NEWS…

• There was debate as to whether we’ve seen “peak Greggs” as the company warned on full-year profits. However, we are in summer and Greggs is known for product that sells better in the winter. Interestingly, it’s thinking of focusing efforts on people on weight-loss drugs by providing smaller portions and protein-rich alternatives.
• Starbucks saw its profits crater over the quarter thanks to turnaround costs. It’s still looking for potential investors/buyers for its China business.

• IN AUTOMOTIVE NEWS – Stellantis has decided to offer more hybrids and petrol vehicles in the US as a reaction to Trump’s anti-EV policies, Ford announced a surprise quarterly loss thanks to a costly recall and a big hit from Trump’s tariffs, Aston Martin managed to ship enough cars to the US before the tariffs came in to keep sales from falling over the quarter and Mercedes-Benz and Porsche bemoaned the lack of a carve-out for European automaker tariffs.
• IN PHARMACEUTICAL NEWS – AstraZeneca reported higher sales on record US growth, Merck suffered a weaker quarter due to a sharp drop in HPV vaccine sales in China and Novo Nordisk continues to suffer as it admitted that its injections were losing out to rival jabs, including cheaper copies of its jabs.
• Heineken said that it was open to moving manufacturing to America to mitigate the hit it’ll get from the new US-EU trade deal. Its results beat forecasts.
• Heathrow submitted plans for a third runway as part of a broader £50bn investment. It could be operational by 2035 with government support but we’ll have to see…
• Rolls-Royce profits jumped in the first half by 50% on strong demand for jet engines and power generators, powering its share price to a new historical high.

My fave video this week was this game. I definitely want to try this with my family🤣!

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…

• President Zelenskyy nominated a new PM in a major reshuffle of his cabinet and the US threatened Russia with “severe” tariffs and sanctions whilst also sending more weapons to Kyiv.

IN DEFENCE…

• Macron promised to increase France’s defence budget by €6.5bn over the next two years but you wonder where he’s going to get the money from given France’s rubbish finances at the moment.

IN TRADE & TARIFFS…

• IN TRADE – Trump announced a trade deal with Indonesia that will result in imports from Indonesia to the US attracting a 19% tariff and Indonesia buying $15bn worth of US energy exports, $4.5bn of agricultural goods and 50 Boeing jets. Trump had threatened the country with a 32% tariff last week. Brazil’s president Lula called Trump’s 50% tariff threat “unacceptable blackmail” but he’s not actually doing anything to retaliate. After all, Brazil’s in a trade deficit with the US! Meanwhile, the US Commerce Department is launching two national security investigations into imports of unmanned aircraft systems and their constituent parts along with the study of polysilicon supply chains.
• IN TARIFFS – Trump has so far raised $50bn in tariffs but now he’s threatening import taxes on pharmaceutical imports “probably at the end of the month”, starting off with a low tariff that will rise over time to “a very high tariff”. The EU’s preparing a list of potential retaliatory tariffs against the US for if Trump follows through on his 30% tariff threat that comes into force from August 1st.

IN TRUMP THINGS…

• RE JAY POWELL – Trump apparently asked some Republican members of Congress whether he could sack the Fed chief but then he had to swiftly deny this. JP Morgan chief Jamie Dimon emphasised the importance of the independence of the Fed but it seems that Trump and chums are going to fit up Jay Powell for “grossly” mismanaging an “ostentatious” refurbishment of the Fed’s HQ.
• RE EPSTEIN – the MAGA base has been split over the handling of the Epstein debacle after it appeared that there was a client list and then the FBI said that there wasn’t and it doesn’t look like Trump’s administration can sweep this under the carpet. That didn’t stop the US justice department firing Jeffrey Epstein prosecutor Maurene Comey but then Trump ordered the release of the Jeffrey Epstein testimony to try and put a lid on the whole thing.
• RE COCA-COLA – Trump randomly stuck his oar in with Coca-Cola, saying that it should use cane sugar instead of corn syrup – but then Coca-Cola pushed back saying that corn syrup gets a bad rap. You would have thought it would be a nightmare for Coke to make the switch, no?
• RE EDUCATION – data from UCAS shows that there’s been a notable uptick of American students applying to UK universities. UK universities really need to increase their overseas student intake as finances have been struggling for some time!
• RE IMMIGRANTS – companies including CoreCivic and Geo Group along with the likes of smaller companies like Management and Training Corp, LaSalle Corrections and Akima Global Services are all booming because of Trump’s desire to rid his country of illegal immigrants. Back in April, the acting director of US Immigration and Customs Enforcement Todd Lyons told some gathered military and tech companies at the 2025 Border Security Expo that he wanted America’s deportation system to be like Amazon Prime delivery “but applied to human beings” 😱! What a disgusting analogy.

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – inflation increased by the sharpest rate in five months, which suggests that Trump’s tariffs are now filtering through. Moody’s Analytics’ latest forecasts show that that the US is at its highest risk of recession in the next 12 months since the pandemic. This is all thanks to the trade war and a slowdown in real consumer spending.
• IN CHINA – China’s economy grew by 5.2% in Q2 thanks to continued strong exports outweighing weak consumer demand, property sector weakness and the effects of Trump’s tariffs. This means that the country’s official GDP growth target for the year of 5% is very much achievable.
• IN FRANCE – France’s PM Francois Bayrou clearly has a death wish as he had the temerity to suggest that France should scrap VE Day and Easter Monday as part of a broader effort to do something about the country’s massive debts. Obviously this isn’t going to go down well!
• IN THE UK – UK inflation rose unexpectedly to 3.6%, potentially making it more difficult for the Bank of England to cut interest rates but it sounds like the Bank will also very much be taking employment numbers into account when making the decision. Chancellor Reeves made a big song and dance about cutting red tape as part of a new financial services strategy but it’s questionable as to whether banks need this and the consensus seemed to be that the so-called “Leeds Reforms” were pretty inconsequential. Other than that, the government announced plans to lower the voting age to 16 in England, to bring it in line with Wales and Scotland and the FTSE100 broke the 9,000 for the first time ever this week! The index has benefited from investors shifting money into the UK from the US because of all the uncertainty Trump is causing at the moment.

IN COMMODITIES NEWS…

• OPEC kept its oil demand outlook steady and will continue to increase output.

IN ENERGY NEWS…

• The recent drought in the UK has prompted a drop in renewable power generated by SSE because hydroelectric power stations have had to be switched off due to lakes and rivers drying up.
• Tenant farmers in the UK are suffering because they’re being kicked off land by the landowners who want to get more money from tenants who are replacing agriculture with solar panels. This is now happening across the country – often in prime farmland.

IN CRYPTO NEWS…

• Central banks are still uncertain about what to do about the rise of stablecoins – whether to embrace them or recommend alternatives.
• Meanwhile, Trump made moves to open up crypto investing to US retirement funds and the House of Representatives passed legislation (the so-called “Genius Act”) to regulate stablecoins by a convincing margin. Crypto continues to make steady progress towards the mainstream!
• Crypto asset manager Grayscale filed for an IPO in the US in the latest example of a crypto firm coming to market. Trump’s embrace of the industry really seems to be emboldening the crypto community!
• Bitcoin breached $123,000 this week, meaning that it has strengthened by over 30% so far this year. The crypto feelgood continues!