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 DAY IN BRACKETS 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.

• The China lockdown is still ongoing and there’s nervousness about Beijing potentially going the same way as Shanghai (Tuesday). Gyms and cinemas were closed down and Covid testing was tightened. The Shanghai lockdowns have been hugely damaging to China’s economy, so the prospect of Beijing going down as well isn’t great.
• This was a week of interest rate increases! Australia kicked things off (Wednesday) with its first interest rate rise in 11 years, the US then followed with its biggest rise in 22 years (Thursday) and then the Bank of England raised the interest rate from 0.75% to 1% (Friday) as central banks continue to battle high inflation. However, inflation is likely to rise further as factory prices rose (Wednesday) and the ONS released figures showing that around 50% of UK businesses reported higher prices for materials, goods or services during March (Friday).
• It wasn’t that much better in Europe either as German and French manufacturing is suffering particularly acutely (Friday). Italy is backing away from its historically cordial relationship with Putin (Tuesday) and the EU is talking about further sanctions on Russia including more restrictions on SWIFT (Thursday) and an EU-wide oil embargo (Tuesday), although Hungary is holding out (Thursday) because it is heavily reliant on Russian energy. UK Foreign Secretary Liz Truss imposed a professional services ban on Russia (Thursday) although that didn’t include law firms or banks.
• In COMMODITIES NEWS, non state-controlled Chinese oil refiners are buying up cheap Russian oil (Wednesday) as it seems to be too tempting to overlook and both BP (Wednesday) and Shell (Friday) had stellar results thanks to the sky-high oil price, which led to increasing calls for the oil industry to pay a one-off windfall tax to help out consumers who are facing higher utility bills. This has thus far fallen on deaf ears.
• In ENERGY NEWS, there were some interesting developments in wind power (Tuesday), as the world’s biggest wind turbine manufacturer, Vestas, said that the Ukraine war would have a big impact on revenues and profits, something recently echoed by rivals including Siemens Gamesa and General Electic. The UK and South Korea are in talks about nuclear power (Tuesday) and French utility Engie signed a 15-year natural gas contract with Texan supplier NextDecade (Tuesday).

• The SMMT is getting less confident about car sales heading into the end of the year (Friday), taking into account rising car prices, cost of living, interest rates and supply chain problems. It was interesting to hear that VW has sold out of EVs in Europe and the US  (Thursday), so it has got s considerable backlog to work through. At the top end of the car “food chain”, Aston Martin got a refresh (Thursday) with a new CEO and CTO who used to be at Ferrari, which has performed extremely well since its flotation in 2015 – something that has not been the case at Aston Martin!
• It seems that some previously-“hot” themes in the automotive sector have lost momentum of late, namely shared ownership (Wednesday) and online car sales (Wednesday) as Mercedes and BMW gave up on their car-sharing joint venture and Cazoo’s US-listed share prices have tanked since its SPAC-listing last summer respectively.

• US consumers are pretty much returning to pre-pandemic behaviours (Thursday) by going to the gym, to live concerts and flying (on planes, not with their arms – that really would be impressive 🤣). However, some lockdown winners have fallen by the way-side (e.g. Peloton and Netflix) as consumer behaviour has changed. Some, like DoorDash, are continuing to win (Friday), which is interesting considering the contrasting experience of European rivals Deliveroo and Just Eat Takeaway, who are seeing a bit of a slowdown.
• European consumers are getting more thrifty as Eurostat data shows that Eurozone retail sales fell further than expected in March (Thursday).
• In the UK, the latest BRC figures show that shoppers are paying higher prices (Wednesday), with more of this going on credit (Thursday). Speaking of credit, Klarna will start reporting customer activity to credit agencies (Wednesday) from June. This is a major development and makes me wonder whether Klarna will get more confident about offering its services for higher ticket items.
• In APPAREL RETAIL NEWS, Boohoo’s profits fell off a cliff (Thursday) but its CEO reckons there’s still life in the market yet, blaming falling profits on high shipping costs and supply chain disruption. Joules had a shocking trading update (Thursday), which was topped off by news that its chief exec will be leaving.
• In FOOD RETAILER NEWS, Tesco has signed a deal with Uber to expand its rapid grocery delivery service (Wednesday) but has come under fire from pig farmers who want it to pay a “fair price” (Friday), something echoed by egg, fruit and veg producers (Tuesday).
• In ONLINE RETAIL NEWS, Etsy is causing a bit of a kerfuffle by raising its transaction fees (Friday) and Shopify’s Q1 earnings fell below expectations (Friday).
• In EMPLOYMENT NEWS, Amazon workers in Staten Island voted against unionisation (Tuesday), Starbucks announced enhanced wages and benefits to those who didn’t join a union (Wednesday) and lawsuits from disgruntled employees including the word “banter” have increased (Thursday), implying that there will be more actions to come in future if the economy takes a dive and redundancies increase as appropriate behaviour in the workplace evolves and gets called into question. Meanwhile, Eurozone unemployment numbers fell (Wednesday). Unions are feeling more powerful given the tight market and inflation outpacing wages…sound familiar?!?

• Apple is facing accusations of breaching competition law by the EU (Tuesday) and, if found guilty, could face a fine of up to 10% of its global turnover.
• Meta Platforms continues to face intensifying competition (Tuesday) and it announced its exit from podcasting (Wednesday).
• Netflix continues to suffer as it is facing the imminent loss of a number of hit shows (Tuesday) as their contracts end – and if that’s not bad enough, it’s now facing a lawsuit from investors accusing the company of misleading them about subscriber numbers (Friday).
• We heard that Elon Musk is thinking of bringing Twitter back to public markets (Wednesday) once he’s carried out deep surgery whilst it is taken private and there was also news that he got more financing (Friday) from a number of financial heavyweights.

• In AVIATION-RELATED NEWS, Heathrow decided to back down on landing charges (Tuesday), which is good news for airlines. Talking of airlines, Qantas said it bought 12 Airbus planes (Tuesday) and we also heard how much aircraft leasing company Avalon lost in Russia (Wednesday).
• In INDIVIDUAL COMPANY NEWS, things are getting so desperate at Peloton that it is now trying to sell a big chunk of itself (Friday) to bolster its flagging finances. Flutter entertainment (owner of Paddy Power and Betfair) is doing really well in the US (Thursday) and could get a boost from California’s imminent legalisation of sports betting. Uber shares fell to their lowest level since the start of Covid (Thursday) as its main US rival announced it was boosting its own efforts to sign drivers.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” stories of the week were the incredible omelette-in-a-can story We eat a canned omelette from a Japanese vending machine and hope for the best (SoraNews24, Oona McGee) and the one about the baby sumo wrestler in Sumo wrestler vs. 16-month-old toddler: The cutest match you’ll ever see (SoraNews24, Oona McGee). He seems like a happy little boy!

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 DAY IN BRACKETS 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.

• It was a turbulent week for markets as they took a dive on China Covid concerns (Tuesday), but then President Xi Jingping announced a huge infrastructure investment (Thursday) that would cover transport, energy, water projects, ports and airports to stimulate the economy. Wall Street was sold off on its biggest one-day decline since September 2020 (Wednesday) on fears that growth was slowing, something that proved to be quite prescient as official figures showed a surprise contraction in the US economy (Friday), which prompted further concerns about an imminent recession (a recession happens when you get two consecutive quarters of economic contraction). Staying on the subject of America for the moment, Biden asked Congress for $33bn more aid for Ukraine (Friday), which implied that he is thinking that this war will drag on.
• Europe is facing an increasing possibility of recession (Thursday) as the German government cut its full year GDP forecast from 3.6% to 2.2% while consumer confidence is at rock bottom. Germany is Europe’s main economic driver and so if Germany sneezes, Europe catches a cold. The market is pricing in a July interest rate hike from the ECB (Thursday), but that is not the official position. That said, the ECB admitted how rubbish its inflation forecasts have been (Friday), which may be a tiny weeny step towards them softening everyone up for an interest rate rise sometime this year rather than in 2022, which is what president Christine Lagarde has been saying. The other big bit of news from Europe this week was that Macron won a second term as France’s president (Monday), which was a big relief for the EU as it meant that it would be business as usual rather than the massive upheaval that would have happened if Le Pen had been victorious.
• In ENERGY news, Poland and Bulgaria got cut off from Russian gas (Wednesday), which sent gas prices up by 20% (Thursday) and it turns out that Germany and Austria are trying to get around sanctions (Friday) by opening K accounts with Russian state-controlled Gazprombank, paying in with Euros for gas that they are buying from the Russians which is then turned into Roubles by the bank (!). Maybe guilt prompted Germany to send the Ukrainians tanks this week because paying for Russian gas may well be prolonging the war. Will they become Europe’s pariahs and/or will other struggling countries use Germany’s actions to justify their own circumventing of sanctions?!? I don’t think this can continue for too long. Meanwhile, in the UK, coal-fired plants that were due to be shut down in September have been asked to continue operating (Thursday) by the Business Secretary Kwasi Kwarteng. The potential energy problem prompted chancellor Rishi Sunak to reconsider a windfall tax on the oil and gas industry (Thursday), although the official line that this short term solution would damage longer term investment in renewables is still holding.
• In SUPPLY CHAINS, the prolonged strict lockdowns in Shanghai have already damaged supply chains (Tuesday), forcing many companies to seek alternative suppliers outside China. Retailers including John Lewis, AO World and Halfords are already seeing shortages and delivery delays. Other consequences include a weaker oil price due to reduced demand from China (Tuesday), patchier availability of toys and electronics, travel delays (especially in Asia) and continued strength in the used car market because new car shortages will continue.

• Twitter featured heavily this week! It all started with Twitter accepting a takeover offer from Elon Musk (Tuesday), which was then followed by Tesla shares dropping sharply (Wednesday) as investors feared a sell-off from Musk’s stake to finance the bid. They were right to as filings showed he had indeed offloaded a chunk (Friday) but it also got a bit tricky as Twitter admitted that it had been overstating user numbers for the last three years (Friday). Twitter employees are, understandably, feeling nervous (Thursday) given all the changes that Musk is suggesting and billionaire rival Jeff Bezos had a little dig, saying that Musk’s new platform could favour China (Wednesday) given Tesla’s business interests there, although he added this was unlikely. Still, he couldn’t resist planting the seed!
• Apple had an eventful week as it announced record profits on the one hand (Friday) but then found itself on the wrong end of yet another EU antitrust lawsuit. It’s still massively reliant on the success of iPhone sales, but the services business also did well.
• Amazon announced its slowest growth for 20 years (Friday), but its cloud services business, AWS, put in a solid performance and advertising revenues were good. Its performance was hit by the poor share price performance of its big stake in Rivian, the EV pickup-truck maker that recently reported production problems.
• Spotify took a pasting as it got a nasty infection of Netflix-itis (Thursday) as investors interpreted Netflix’s weakness last week as a sign of a wider malaise of streaming in general. Spotify could actually be in a worse position than Netflix (Friday) because it doesn’t own much of its own content and is competing with powerful and deep-pocketed rivals (Apple, Amazon and Google) with staying power and substantial additional businesses. I reckon it should try to buy more podcasts to give it proprietary content for a much more reasonable fee.
• In news on the other tech giants, Meta Platforms unveiled its slowest quarterly sales growth for a decade (Thursday) but if it stays the course, it could be a massive beneficiary from the development of the metaverse (Friday). Microsoft continued to benefit from WFM (Wednesday) as revenues and profits were driven by cloud services and software over the last quarter while Google’s shares slid (Wednesday) on disappointing ad revenue growth.

• Household food bills look set to rise by £271 (Wednesday) according to the latest figures from Kantar and so people who are able to are withdrawing money from their houses via a surge in equity release (Wednesday) to help them pay for all these bills (and possibly help their kids, I suspect). They are also, increasingly, looking for higher-paying jobs or joining unions (Monday).
• In GROCERY-RELATED SPENDING TRENDS, consumers are starting to stockpile some essentials like cooking oil (Wednesday) as grocery price inflation reached its highest level in over a decade in April. It’s getting to the point that Tesco, Morrisons and Waitrose are rationing out the bottles! Consumer goods companies like Coca-Cola (Tuesday) and Unilever (Friday) are putting up prices, something that we’ve seen with the likes of P&G, Reckitt Benckiser and Heineken – but I don’t think that can last forever. I wonder whether it’ll last over the next few months and then hit a wall when the weather starts getting colder again and utility bill pain really starts to kick in again. Palm oil prices are set to rise as the world’s biggest producer, Indonesia, stops exports of the stuff (Tuesday). Purveyors of groceries – including Asda (Tuesday) and Morrisons (Monday) – are cutting prices to help consumers, and while Aldi and Morrisons are increasing market share (Wednesday), Sainsbury’s had a profit warning (Friday).
• In NON-GROCERY RELATED SPENDING TRENDS, consumers spent money on Mattel’s toys (Thursday) and staycations (Monday) – a trend that Premier Inn is targeting (Friday) – although Heathrow is getting downbeat (Wednesday), saying that the summer booking frenzy is a “bubble”, although airlines are saying that they’re just doing this as a precursor to increase charges.
• In RETAIL, WH Smith has already started stocking up for Christmas (Thursday), which would imply that other retailers are doing the same, meaning that demand for warehouse space is going to continue to be strong. Primark is putting up prices (Wednesday) while both Boots (Thursday) and Ted Baker (Thursday) are getting closer to finding new owners.

• Private equity firms like Blackstone continue to hoover up assets (Monday), although, more broadly, uncertainty in emerging markets is causing investors to rethink (Monday) as data from the Institute of International Finance shows pretty big withdrawals over the last month. Although some commentators think that investors might be more likely to avoid emerging markets in future, I don’t think so – it just means that the risk goes up. As the saying goes, with great risk comes great reward and if returns are high, investors are always going to be tempted to dip their toes in IMO.
• There was a really interesting development across The Pond as investors are pushing back against SEC proposals to make investors declare stake-building earlier than is currently the case (Tuesday). Corporates are supportive because it means they are less likely to get blindsided by unsolicited takeover approaches but investors don’t like it because it means that they can’t sneak up on their target so easily. No doubt we’ll be hearing more about this as time goes on!
• In BANKS NEWS, Deutsche Bank unveiled its best quarterly profits in almost ten years (Thursday), Standard Chartered beat market estimates (Friday) and Lloyds Bank did OK but cautioned about an “uncertain” outlook (Thursday) but Barclays’ performance was hit by litigation costs and other charges (Friday).

• In AUTOMOTIVE NEWS, Mercedes Benz saw rising revenues (Thursday) thanks to sales of top-end cars, Ford posted a Q1 loss (Thursday) but announced the launch of its F-150 Lightning (Wednesday) which should prove to be popular as it already has tons of orders and is being launched ahead of its arch-rival, GM’s Silverado, while rival pick-up truck maker Rivian recently announced production problems. Renault is looking to sell its Russian business for one rouble (Thursday), with the option of buying it back within five or six years and Volvo bought a minority stake in Carwow (Wednesday) to help it with its digital sales.
• Elsewhere, Maersk announced stellar profits (Wednesday) but warned that trading would slow down towards the end of the year due to ongoing supply chain problems. Also, the UK regulators and cannabis start-ups are clashing (Monday) over a new official list of approved “ingestible products” that contain CBD.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was actually the video of the five stages of Costco shopping – genius 🤣!

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 DAY IN BRACKETS 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.

The gloom continued this week – but there are some positives! Honest!

• The global picture is looking pretty grim. The IMF downgraded year-end GDP forecasts for the UK and Eurozone (Wednesday) and stuck the boot in for the UK, saying that inflation would run higher than all other G7 members.
• China continues to suffer from all those strict Covid lockdowns (Tuesday), meaning that its Q1 GDP came in below market expectations. January and February were actually quite strong but then the lockdowns came into force and spoiled the party. China’s central bank, the People’s Bank of China, announced a raft of stimulatory measures to counter the slowdown (Wednesday) and encourage investment.
• It was a bad week for Germany as producer prices increased by the steepest rate since 1949 (Thursday), meaning that it won’t be long before higher prices filter through to the “real” economy. The country faces continued criticism for its reliance on Russian gas, but it turns out that the practicalities of just “switching off” are too much (Thursday).
• Some economists reckon the UK is heading for recession (Tuesday) and, given the current backdrop of rising prices and wages falling behind inflation, this sounds compelling. However, a lot can change before the end of this year – and it could all depend on how the Russia/Ukraine war concludes. Still, it wasn’t all bad! It looks like Rolls-Royce’s SMRs are making progress (Wednesday) and they reckon they’ll be pumping electricity into the national grid by 2029. Let’s hope this all goes smoothly – we don’t want another HS2, now do we!

• There was an interesting article this week that highlighted the relative lack of SPAC deals these days (Tuesday) versus the “glory days” of 2020 and 2021. There are a number of ongoing lawsuits focusing on whether the companies at the centre of the deal are skewed against ordinary investors. It certainly seems like they are no longer the favoured route of companies to market they once were!
• There was also some juicy M&A news this week. Private equity giant Blackstone bought a massive student accommodation portfolio in the US for $13bn (Wednesday) while it turns out that another private equity firm, TDR Capital, has made an absolute fortune from buying Asda (Tuesday) with the Issa Brothers. Meanwhile, Robinhood bought UK crypto trading platform Ziglu (Wednesday), adding to its array of services just two years after Robinhood abandoned entry into the UK market.

• Unsurprisingly, UK consumers are losing confidence (Friday), according to the latest GfK survey, thanks to the cost of living crisis – and even the ones with more money are not putting as much into the stock market as they have been (Friday), according to investment platform AJ Bell.
• As consumers, we are spending our money on Heineken’s beer (Thursday), consumer staples made by companies like P&G (Thursday) and Nestlé (Friday) in addition to Tesla’s cars (Thursday). We are trying to spend money on trains via the government’s “Great British Rail Sale” (Wednesday), but the website crashed and the discounts only apply to a very small number of journeys! However, we are not spending money on streaming in general (Tuesday) and Netflix in particular (Thursday) as subscriber numbers fell for the first time in over ten years (Wednesday), making it ponder options for its future (Friday). As if that wasn’t evidence enough of the current weakness in streaming, CNN+ got shut down (Friday), after only launching on March 29th!
• In EMPLOYMENT, it seems that unionisation is gathering momentum as railway workers voted on strike action (Thursday) as GSK workers also voted to strike (Thursday), something that is very unusual in the pharmaceuticals industry. It’s interesting to see that a combination of tight labour markets and pay lagging rampant inflation is frustrating employees and increasingly emboldening unions – something we are also seeing across The Pond with Amazon and Starbucks workers, although Starbuck’s new CEO is doing his level best to try to discourage membership. In the UK, some economists reckon pay is going to get worse (Tuesday) just as utility bills are likely to climb higher (Wednesday), according to the utilities companies themselves, while the prospect of “surge pricing” could prove to be another shocker (Tuesday).
• In RETAIL, a survey by BDO showed that 40% of retailers are planning on raising prices (Tuesday) and it seems that high streets may be offering benefits to our health as gyms are snapping up locations (Tuesday) while rents are low. Among retailers themselves, Amazon announced that it would allow retailers to sell directly to Prime subscribers (Friday) in an effort to fend off increasing competition from Shopify while fast fashion growth monster Shein got into hot water for allegedly copying Zara designs (Wednesday), although I’m not sure they really care as they have done this loads of times before and got away with it!

• A big change is in the offing for Big Tech in the form of new EU legislation (Friday). The Digital Services Act will force large tech companies to up their game on policing for dodgy content on their platforms – but given that this is going to predominantly target big US companies, I suspect there will be some kind of backlash from Biden and chums. More details to come this week I suspect.
• The Twitter drama rolls on with Elon Musk announcing a major finance package to buy the company (Friday) and private equity companies consider getting involved (Tuesday).

• In AUTOMOTIVE NEWS, you’ve no doubt been hearing about EV makers and battery makers scrambling around to source raw materials, but LG Energy went one further by buying an entire mines-to manufacturing supply chain (Wednesday) in Indonesia! Meanwhile, Rivian complained that EV battery shortages could prove to be worse than the current chip shortages (Tuesday). Staying with cars, Asian tyre maker Apollo Tyres said that prices will rise by up to 10% this year (Wednesday) because of higher costs. Separately, Stellantis also announced that it would be ending production in Russia (Wednesday) as the parts shortages and sanctions pile up.
• In RUSSIA, Putin ordered Russian companies to delist from foreign stock exchanges in a new law (Wednesday). TBH if they aren’t already doing it anyway, they are considering it so I think he’s just formalising it before individual exchanges do it for them.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was Scientist claims to have found the ‘perfect’ combination for a crisp sandwich (The Mirror, Salimat Garba, Emily Jane-Heap and Courtney Pochin). I never even considered putting crisps in a sandwich with something else! A game-changer for sure 🤣!

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 DAY IN BRACKETS 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.

• The WTO downgraded world growth forecasts (Wednesday) as the Ukraine war continued to impact the world economy while Shanghai’s lockdown due to increased Covid cases hit China’s economy (Monday). However, it sounds like a plan is in place to ease restrictions (Tuesday), so there is light at the end of the tunnel!
• In terms of sanctions and consequences, Ukraine is appealing to the world’s biggest oil traders to stop handling Russian crude (Monday), as it finances the war effort. Also, a cardboard crisis is on the cards (Monday) as the starch biproduct of wheat, potatoes and other food is in short supply and has therefore become more expensive. This starch is used to stick the three layers of corrugated cardboard together – so is pretty key! Russian consumers are cutting expenditure (Monday) as sanctions are now trickling down to the real economy while Finland – and possibly Sweden – is considering membership of NATO (Thursday) in response to Russia’s current actions.
• In other macroeconomic news, US inflation hit a 40-year high of 8.5% in March (Wednesday) and US producer prices also rose by their sharpest level since records began (Thursday). Elsewhere, the UK economy stalled on the GDP front (Tuesday) while inflation rose to 7% in March (Thursday). Australia’s PM Scott Morrison announced an election date of May 21st (Monday). If he wins the vote, he’ll be the first Aussie PM to have a second term since 2007! He doesn’t seem to be able to count on his colleagues for support though as many lined up to stab him in the back (Wednesday). Ah, politicians, eh?!? Meanwhile, both Canada and New Zealand raised their respective interest rates (Thursday) in order to curb inflation.
• There was also some interesting news on renewable energy this week. It turns out that energy from wind turbines hit a new high (Wednesday) and Shell signed a deal with German energy company Uniper to produce hydrogen (Wednesday) that will provide power to industry around the Humber but Rolls-Royce took a bit of a pasting as some analysts reckoned that the SMRs they are developing will cost more than the company is saying (Wednesday).
• Staying on the theme of energy, though, it looks like Germany’s economy is going to take a €220bn hit if it stops accepting Russian gas (Thursday). It continues to face mounting pressure from the international community for trading with Russia.

• UK consumer confidence is falling (Tuesday), according to the latest figures from the British Retail Consortium. Given continued high petrol prices (Wednesday), rising costs of heating and seafood (Thursday) and a rent boom (Thursday), it’s not surprising! On the real estate front, London property prices are rising again (Monday) and UK landlords are buying properties again (Monday). The most consistent performer in the real estate sector is still warehousing, though (Tuesday). However, when consumers have got some money, they are spending it on holidays (Monday) and casual dining (Tuesday) and less on takeaway deliveries (Wednesday).
• The problem is that although the job market is growing (Monday) and unemployment is falling (Wednesday), wages just aren’t keeping up with inflation (Wednesday) despite some employers offering very nice incentives (Wednesday)! The problem of a tight labour market combined with wage increases that can’t make up for rising prices means that employees are getting frustrated. They are realising that this is a candidates’ market and are feeling confident enough to unionise at Amazon (Monday) and at Starbucks (Thursday), although new CEO is doing his best to discourage staff from joining unions.
• Meanwhile, some retailers are trying to help cut prices. M&S is cutting the price of a number of essentials (Tuesday) and Tesco says it’ll try to keep a lid on prices (Thursday), but generally speaking, supermarkets tend to do well in an inflationary environment.

• It turns out that digital ad revenues rose by a chunky 35% in the US last year (Wednesday) and TikTok was one of those companies smashing it in that area as it tripled its ad revenues (Tuesday, Thursday). Epic Games got a nice $2bn cash boost from Sony and Lego (Tuesday) in order to help it build a metaverse for children while China’s clampdown on the gaming sector seemed to ease as regulators approved some new games (Tuesday) for the first time in nine months. Apple is now facing another antitrust suit from the EU (Tuesday) as part of the ongoing investigation into music streaming.
• Probably the most dramatic story this week was about Elon Musk deciding against taking a seat on the board of Twitter (Monday) while disgruntled investors take him to court saying that he should have disclosed his stake-building earlier (Thursday).

• In CAR-RELATED NEWS, Honda announced that it would keep investing in hybrid and hydrogen fuel cell development (Wednesday) while GM managed to strike a deal with Glencore (Wednesday) to supply it with cobalt for its car batteries. Interestingly, Renault is considering moving future production of its Alpine brand from France to the UK’s Lotus (Wednesday).
• In INDIVIDUAL COMPENY NEWS, Deutsche Bank and Commerzbank got sold off as major shareholder Capital Group sold down its stake (Wednesday) and JP Morgan saw its Q1 profits fall (Thursday) due to a slowdown in dealmaking and the impact of the Russia/Ukraine war. On the plus side, the IPO of Dubai’s biggest utility had a very successful market debut (Wednesday) and little old Cornish Lithium managed to hire the former chairman of Polymetal (Tuesday), which sounds like a great move as the company is planning on a stock market flotation later this year.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was undoubtedly the one about this very niche themed café in Tokyo: This Tokyo cafe won’t let you inside unless you’re a writer or translator with a deadline looming (SoraNews24, Casey Baseel). I think this would be very useful for a lot of people!

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 DAY IN BRACKETS 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.

This was another week of sanctions and consequences with some innovation thrown in.

• Overall, the head of the Bank of International Settlements said that we’re all going to have to get used to higher inflation for longer (Wednesday). Wages, inflation and house prices are all rising currently, but this can’t last forever. Aggressive interest rate rises from central banks will still take a few months to kick in properly and the war is still ongoing, so things are very difficult to predict currently.
• The US is heading for recession (Wednesday), according to the US economist at Deutsche Bank – and he also reckons Biden is not going to be in a strong position at the next presidential election. Biden did, however, announce a new agreement with the UK and Australia on the co-development of hypersonic weapons (Wednesday), which will no doubt irk the Chinese who seem to be itching to get their hands on Taiwan.

With regard to sanctions…

• The EU was talking about implementing more sanctions on Russia (Monday), all of which intensified as more reports of atrocities came to light (Tuesday) and the US then ratcheted the pressure up even further (Thursday). France’s President Macron called for a ban on Russian oil and coal imports (Tuesday) while Lithuania became the first EU country to end imports of Russian gas (Monday) and some businesses are trying to cut their energy costs by doing what they can to reduce their usage (Tuesday). Germany moved to take over Gazprom’s gas storage facility (Tuesday) and, talking of gas, the UK is looking at ways to help Europeans get their LNG supplies (Friday).

It was a big week for the UK in terms of energy…

• BoJo announced a new energy strategy plan that involves a quintupling of the UK’s offshore wind power (Thursday) among other things. It had a mixed reception though (Friday) but there was some ground-breaking news on nuclear fusion (Tuesday) from the Oxford-based First Light Fusion taking us a step closer to the Holy Grail of power generation.

Global trade is navigating choppy waters at the moment…

• Shanghai’s lockdown-induced backlog is hitting supply chains and UK businesses (Friday) but has global implications (Thursday), with the trucking industry having particular difficulties because there are a lot of no-go areas in China.
• Agriculture is taking a serious hit from China’s super-strict Covid policies (Wednesday) to the extent that there is debate about introducing GMOs (Wednesday) while UK farmers are facing the challenges of the “four F’s” (Monday) – feed, fertiliser, fuel and financing, leading to fears that the UK food industry could shrink permanently (Wednesday), especially if the government doesn’t do anything to address the Brexit-induced labour shortage.

Meanwhile, Turkey’s inflation hit a 20-year high of 61% (Tuesday) thanks to rising food and energy costs.

• In ELECTRIC VEHICLE NEWS, Polestar sold 65,000 cars to Hertz (Tuesday), GM and Honda teamed up to make “affordable” EVs (Wednesday) and Tesla’s deliveries rose for the first quarter but fell short of analyst expectations (Monday). Britons are buying a lot of EVs (Wednesday) and our EV take-up plans look pretty punchy (Friday) while Vietnamese carmaker VinFast announced plans to do a US IPO (Friday) to raise funds to help it switch to 100% EV manufacturing. Battery raw material prices continue to rise (Monday) and Chinese manufacturer Nio is trying to tout the advantages of swappable batteries (Wednesday).
• Meanwhile, in petrol vehicles, dealership Lookers reckons strength in the used market will continue (Thursday) and VW said that it wants to axe a huge number of models (Thursday) in order to concentrate its efforts on more premium vehicles where it makes more money.

• In the US, consumers are starting to cut back on essentials now (Tuesday) but the employment market remains tight as Walmart is offering big bucks for its truck drivers (Friday) and Amazon workers are getting unionised (Monday) as they get increasingly emboldened to stick up for themselves (Thursday). Howard Schultz returned to Starbucks this week (Tuesday) and immediately voiced his intentions to focus more on staff and customers rather than shareholders (presumably because he is trying to stop his baristas from getting unionised!).
• In the UK, household finances continue to get squeezed (Monday) by rising prices of staples like cooking oil (Tuesday) and a new survey from PwC showed that concern about rising prices has dented consumer confidence (Monday). UK house prices are reaching record highs (Friday), which is no doubt contributing to more consumers getting 35-year mortgages (Thursday). The recovery of leisure travel in the UK is being scuppered by a lack of available staff (Tuesday), the operation of the Channel Tunnel was disrupted (Tuesday) and Ryanair got more downbeat on their full-year expectations (Tuesday). In UK employment, the Communication Workers’ Union rejected BT’s pay offer (Friday) because it was below inflation and over 3,000 workers at 60 companies across the UK are going to start experimenting with a four-day week (Monday).

• In APPAREL RETAIL, Shein got a massive valuation at its latest funding round (Wednesday) as it continues to go from strength to strength, Ted Baker put itself up for sale (Tuesday) and Primark upgraded its website (Friday), bringing it closer to the point where you might be able to actually (but not quite!) buy stuff online from there! M&S announced the launch of resale (Tuesday) via a partnership with resale platform Dotte.
• In GROCERY RETAIL, Morrisons warned that its profits would take a major hit this year (Tuesday) and the Co-op is also looking pretty iffy (Friday).

• In TECH, Elon Musk became Twitter’s biggest shareholder (Tuesday) and he was offered a seat on the board (Wednesday). Meanwhile, Amazon signed satellite deals (Wednesday) that will put it head-to-head with SpaceX and the UK government-owned OneWeb.
• In INDIVIDUAL COMPANY NEWS, Uber is now broadening its offering to cover trains and coaches (Wednesday) and the pre-paid funeral industry looks like it’s going to get a serious shake-out (Friday) as the failure of Safe Hands has prompted scrutiny of the finances of the whole sector.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was undoubtedly the one with the video of a brilliant cover of an 80s classic HERE. This really is brilliant!

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 DAY IN BRACKETS 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.

This week saw China continuing to tread a delicate path between neutrality towards Russia on the one hand and not annoying the West enough to incur sanctions on the other.

• China is having Covid problems (Tuesday) and its patchy vaccine programme has left around half of its elderly at risk. Things got so bad that they closed down Shanghai (Tuesday) and later decided to extend the lockdown (Friday). It’s thought that China’s strict lockdown is costing the economy up to £35bn a month (Wednesday) but could end up way more if other cities like Beijing, Tianjin and Shenzhen go down the same route. Chinese and Russian foreign ministers had their first meeting since war broke out (Thursday) as China continues to keep a foot on either side of the divide.
• Germany announced inflation figures that were the highest for 40 years (Thursday) at 7.3%, powered largely by higher energy prices. With Putin digging his heels in about getting paid in roubles (Friday) Austria and Germany are talking about the possibility of gas rationing (Thursday) in the event of a complete cut-off from Russia.
• Elsewhere, Spain announced a €16bn plan to mitigate damage to Spain’s economy (Wednesday) and Australia delivered a giveaway budget (Wednesday) ahead of the federal election in May.

There was a lot of talk about oil and gas this week…

• The US made a big thing about releasing some of its emergency stash of oil (Friday), adding that it would impose fines on domestic oil companies that don’t increase drilling. At the end of the day, this isn’t really going to touch the sides and will make much less difference to oil supply than OPEC turning on the taps – something they aren’t minded to do at the moment.
• The UK crossed some previous red lines as the North Sea Transition Authority gave Cuadrilla another year to come up with fracking proposals (Friday), something that would previously have been unheard of! Continuing on that theme, Shell got a two-year licence extension for developing the controversial Cambo oilfield (Thursday) off the Shetland Islands, something the government had been dragging its feet on, particularly following last year’s COP26.
• In LNG developments, although Germany managed to negotiate more imports from non-Russian sources (specifically Qatar and the US) it seems that Germany in particular doesn’t have the facilities to receive it (Tuesday) and it doesn’t make up for the amount it gets currently from Russia (Wednesday).

RENEWABLE ENERGY sources also featured a lot as everyone scrabbled around to find non-Russian supplies:

• Although solar and wind costs have risen since Russia invaded Ukraine (Monday) the government is still keen to push solar power (Wednesday) and triple the amount of solar capacity (Tuesday) and while BoJo is keen on wind power, he relented on onshore plans (Thursday) following resistance from MPs whose constituencies would be affected.

In COMMODITIES…

• Rising lithium prices are causing increasing concerns that EVs will get even more expensive than they already are (Wednesday) but Australia made a breakthrough with a Chinese JV partner (Friday) taking a big leap forward into producing Australia’s first battery-ready lithium hydroxide. Australia exports a lot of lithium but, thus far, hasn’t refined it.

• Consumers around the world are facing real challenges at the moment. Egypt is having a nightmare (Tuesday) because it is the world’s biggest importer of wheat (most of which comes from Russia and Ukraine) and it will no doubt have to rely heavily on money from the IMF to tide it over during this difficult period. In the UK, the latest data from Kantar said that grocery inflation last month saw its biggest monthly increase since April 2012 (Wednesday), which is just another thing to add to the list of things that are going up in price. Energy bills for 20m households went up by 54% (Friday), beer and clothing prices will be going up (Monday) due to expected or actual barley and cotton shortages and it seems that we are increasingly financing our spending on credit cards (Wednesday) as credit card borrowing showed its biggest monthly rate increase since records began in 1993! Almost 2/3 of firms expect to raise prices over the next three months (Friday) and the Bank of England warned of a major hit to economic growth (Tuesday). Residential property prices are rising faster than inflation currently (Wednesday) and mortgage costs are expected to increase (Thursday) because cheap mortgage deals are being withdrawn in anticipation of more interest rate rises. “Staycation” spending is a rare bright spot (Tuesday) and moneyed consumers are buying posh Mulberry handbags (Wednesday).
• Retailers got feisty this week. A class action lawsuit is being brought by 100,000 British businesses (Thursday) against Visa and Mastercard for charging eye-watering fees on corporate credit cards. Asda also faces a legal battle with Waitrose (Tuesday) for giving its new cheapo range a similar name to Waitrose’s. Elsewhere, Boots reported good sales (Friday), which is good news because its parent is seeking out a new owner for the UK business and H&M saw sales growth momentum slow (Friday) as result of the war. Russia was the company’s fifth biggest market pre-invasion.

• Amazon drivers are agitating for change (Monday) as their finances are being squeezed and the UK government has basically lost the battle with P&O (Thursday) as most of the P&O crew took the settlement offered by the company in the first place and its proposals to force ferry operators to pay at least the minimum wage have failed. The whole debacle has, however, highlighted how low pay is rife in the seafaring industry, which may mean that pay practices at P&O’s rivals come under the spotlight. Sainsbury’s is under pressure to pay the living wage (Monday) but this comes at a sensitive time as the grocer is doing a bit of a reshuffle. The number of job ads seems to be fading (Friday), presumably because of the Russia/Ukraine war – talking of which, truckmaker MAN has furloughed 11,000 staff in Russia (Thursday) because of parts shortages.

• Macquarie and British Columbia Investment bought a 60% stake in the National Grid’s gas network (Monday), which is especially interesting as it is also teaming up with private equity firm KKR to buy the UK’s biggest electricity distributor UK Power Networks.
• Royal Bank of Canada bought UK wealth manager Brewin Dolphin (Friday), only months after America’s Raymond James bought UK wealth manager and broker Charles Stanley. Consolidation in this sector continues…
• Yandex, aka “Russia’s Google”, signalled its intention to sell its UK rapid grocery delivery business (Friday). It only launched in October last year but it has 1.4m users and four London warehouses.
• Apollo walked away from buying Pearson (Thursday) after its latest bid for the educational publisher was rejected. It can’t put in another bid for six months unless another bidder comes along or if Pearson invites it to.

• In TRAVEL, Tui said it would repay Covid state aid as bookings were back to pre-Covid levels (Thursday) and Ryanair is bullish about the coming summer (Friday), but I don’t share their optimism! I really think that inflation – and shocking household bills in particular – are going to give cause for people to cancel/postpone.
• In AVIATION, aircraft leasing company Avalon warned of impending big losses because of the Russia/Ukraine war (Wednesday) and then the world’s biggest lessor, AerCap, put in a massive insurance claim (Thursday) for the planes that it has “lost”.
• In TECH, Chinese telecoms giant Huawei posted weaker sales but stronger profits over 2021 (Tuesday) as US sanctions kicked in and it is now facing a tricky dilemma about Russia (Thursday). Should it take advantage of western companies leaving but risk even more sanctions for effectively supporting Russia?
• In INDIVIDUAL COMPANY NEWS, the government sold down some of the stake it took in NatWest during the financial crisis (Tuesday), but at a loss, while Carlsberg and Heineken face material hits to their business (Tuesday) as they look to ditch their Russian businesses.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was Nike takes over Cross Shinjuku Vision’s giant screen with 3D sneakers… and cat paws (SoraNews24, Shannon), which is absolutely amazing, don’t you think?!?

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 DAY IN BRACKETS 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.

This week saw America stepping up a bit more amid the Russia/Ukraine madness, Germany continued to fret about cutting off Russian gas and BoJo is having a major rethink about power generation in the UK!

• Fed chief Jay Powell signalled more aggressive interest rate moves (Tuesday), floating the possibility of a full 0.5% interest rate rise in May. Biden also cut tariffs on steel and aluminium imports (Wednesday) that had been introduced in the Trump era and he came over to Europe to meet leaders at NATO HQ (Thursday) to bring more unity towards Russia/Ukraine as Germany in particular has wobbled (Thursday) because of its reliance on Russian gas. Germany did actually manage to negotiate alternative supplies of LNG from Qatar (Monday) and the US (Friday).
• Energy in the UK seems to be going through a huge period of change at the moment regarding power generation. BoJo is looking at the North Sea with renewed interest (Monday) and Shell is reconsidering its involvement after previously going off in a huff (Friday) and committing more investment to the UK (interesting timing given that oil companies managed to withstand ongoing pressure to pay a windfall tax!). He’s also trying to increase nuclear’s part in the power mix (Tuesday) by making it easier for insurers and pensions to invest and altering planning laws to make it more difficult for locals to derail them. He’s also keen to push both offshore and onshore windfarms (Thursday) and is expected to push through related proposals next week. Sunak announced the Spring Statement (Thursday) which was criticised for not doing enough to fight fuel poverty (and other things) and even BoJo couldn’t resist having a bit of a dig (Friday).
• OIL featured prominently this week. On the one hand, Saudi Aramco announced plans to increase oil production (Monday), but then on the other, Russia decided that now would be a good time to carry out “repairs” on the Caspian Pipeline Consortium’s pipeline (Wednesday) that will squeeze oil supplies further. Vitol, the world’s biggest oil trader, says that diesel might have to be rationed (Wednesday) because we used to get a lot of diesel from the Russians, but the government has dismissed this concern (so far).

• Elon Musk opened his Germany gigafactory (Wednesday), while in the UK it turns out that the cost of on-street charging has reached new highs (Tuesday). It probably doesn’t help that the UK is behind target on the number of chargers (Thursday) to meet the government’s EV target but BP may ride to the rescue on this (Thursday) with a new commitment to triple the current number of chargers by 2030. Interestingly, Americans are getting increasingly interested in EVs (Thursday) but it’ll be interesting to see whether this interest converts as car loan momentum looks like it might slow down (Wednesday). They are getting increasingly concerned by expensive petrol prices but I guess if interest rates keep going up, they may be more worried about how much their loans will cost them.
• The shortage of chips may be prolonged (Tuesday) as ASML, which makes the machines that makes chips, says that supply chain problems are going to limit their capacity – so I guess even if the likes of Intel, Samsung etc. say that they are building new production capacity, if they don’t have the machinery, they’re not going to be able to make anything! Meanwhile, Nvidia announced plans to broaden its offering within the automotive space (Wednesday) from infotainment stuff currently to more complex driver-assistance systems.

• Rising wheat prices are hitting bread prices hard in places like Lebanon (Tuesday) and the WTO warned that there could be food riots (Friday) as a result in badly affected countries while milk prices are rising (Monday) due to the disruption in supplies of feed.
• Various companies have reconsidered their Russia ties (Friday) including Renault, which had been dragging its feet, and Chinese companies like Geely are looking very carefully at their options (Friday) because although they could benefit from rivals quitting Russia, in doing so they could themselves become target of sanctions.
• In Russia, steelmaker Evraz has been blocked from making an interest payment on one of its bonds (Tuesday) due to sanctions. Moscow’s main airport furloughed 7,000 staff (Tuesday) probably because it expects sanctions to persist, and it seems that a raft of insurance claims is looming on the horizon (Tuesday) from the aircraft leasing companies that have planes trapped in the country. In the meantime, the country’s main stock exchange, MOEX reopened (Friday), but for only a few hours, a limited amount of stocks being traded, not shorting and no foreign investor selling.
• Other countries may be rethinking their foreign policies as a result of Russia’s invasion of Ukraine. Many think that what’s happening to Russia now could happen to China (Thursday) if it gets punchy in Asia (particularly Taiwan) and Japan’s long-term courting of Russia is looking ill-advised (Thursday), which means that they are going to have to rely on closer co-operation of their regional allies.

• P&O’s dodgy way of sacking 800 people last week was called into question by insurers (Monday), and even BoJo got in on the act by speculating about its legality, but then it turned out that P&O’s chief exec knew what he was doing and didn’t care (Friday) and anyway, more than 500 of the 800 affected had taken the payoff, denying unions and MPs the opportunity to get properly aggressive. Whether this will become a precedent to be followed by companies in a similar bind is a moot point, however.
• In employment trends, more retirees are returning to the workplace in the US (Monday) and ESG investors are in big demand (Monday) as everyone is jumping on the bandwagon and realising that there aren’t enough qualified people on it.

• In COMMERCIAL PROPERTY, embattled Chinese developer Evergrande had its shares suspended from trading (Tuesday) as worries intensified about its restructuring, but in the US it seems that Big Tech companies continue to expand their physical footprint (Thursday) as they continue to buy up property. Warehousing continues to be a major theme as Prologis is wanting to buy Blackstone’s warehouse portfolio (Tuesday) for a lot of money while Asia’s biggest warehouse operator, GLP, has just raised €1.2bn in new funds to invest in European warehouse assets (Thursday). Just a thought but when you consider the increased demand for space for warehouses, gigafactories, nuclear power stations and warehousing (not to mention more warehousing in central areas for all those rapid delivery services!) it would seem that commercial property is going to be very active for quite some time yet!
• In RESIDENTIAL REAL ESTATE, Rightmove says that the average UK house price has breached £350,000 for the first time (Monday) and February saw the biggest monthly rise for 18 years! This hot market seems to be retaining its heat despite increasing pressures on household budgets!

• Warren Buffett’s Berkshire Hathaway offered $12bn for Alleghany (Tuesday), putting a small dent in Berkshire’s $147bn cash pile.
• Private equity firm Thoma Bravo bought enterprise software company Anaplan for $10.7bn (Tuesday), which fits into its general strategy of buying software companies.
• It was quite interesting to hear that the owner of Butlin’s is considering buying Parkdean (Monday). Butlin’s is owned by Bourne Leisure, which itself is owned by Blackstone. Parkdean has been put up for sale by its owner, Onex Corporation.

• Facebook is now facing a £2.3bn claim for a 44m users (Monday) for using its market dominance to “strike an unfair bargain with users” that helped it harvest huge amounts of data to generate income.
• The first lab-grown meat is going to be available on British supermarket shelves in about 18 months’ time (Monday) via a JV between Agronomics and Roslin Technologies. It’ll be the first cultivated meat to be sold in the UK and will be in pet food.
• There was some mildly good news for Chinese tech companies as China’s top economic official, Liu He, implied that Beijing was nearing the end of its “rectification” crackdown (Wednesday). Mind you, Tencent’s revenue growth still took a knock (Thursday).
• Kingfisher (owner of B&Q) breached the £1bn profits barrier this week (Wednesday), becoming only the third British retailer in history to reach the milestone after Tesco and M&S.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” discovery this week was of THIS MASH-UP of two classics. Amazing!

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 DAY IN BRACKETS 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.

This week was characterised by more Russian aggression, more sanctions and more repercussions. Let’s try and untangle all that!

• China had a shaky week on the markets as Hong Kong and Shanghai kept falling (Wednesday) due to a combination of worries about more lockdowns in the face of rising numbers of Covid cases and the knock-on effects of sanctions on Russia. Americans alleged that China has considered Russian requests for military equipment (Tuesday) to bolster its war in Ukraine.
• Russia seemed to make its bond payments (Friday) although much of the week was spent speculating about whether it was going to pay (Thursday) or whether it would follow through on its threat to pay in roubles (Monday). Some creditors are yet to receive their funds, so the payment is not a definite! Putin has vowed to increase Russian salaries and pensions to mitigate western sanctions (Thursday).
• The US lifted its interest rates for the first time since 2018 (Thursday) from 0.25% to 0.5% to curb record inflation levels, adding that they would make six further increases this year whilst also cutting GDP forecasts.
• In the UK, the Bank of England increased the interest rate from 0.5% to 0.75% (Friday) to tame inflation. 8 out of the 9 MPC members voted for a hike, so this is a strong signal, although they are less aggressive than the Americans about further increases.

Meanwhile, in commodities…

• In oil, the US retreated from talks with Venezuela about increasing oil supplies (Tuesday), following their self-imposed ban on Russian oil, while the International Energy Agency warned of the “biggest supply crisis in decades” (Thursday) – although oil prices had a bit of a respite because investors thought that China lockdowns would dampen demand (Wednesday). Still, the oil price is so high now that it looks like ConocoPhillips, Chesapeake Energy and Contintental Resources are on the verge of another shale boom (Tuesday).
• In energy, BoJo is having to reconsider fracking in the UK (Friday) and drilling for oil in the North Sea (Wednesday) in order to make up for the oil that it won’t be buying from Russia. Cuadrilla is putting pressure on the UK government (Tuesday) to get fracking restarted. The situation is getting so desperate that German utilities company RWE has said that it will be bringing coal power stations back online (Wednesday). Japan’s PM suffered a severe set-back in his ambitions to re-engage with nuclear power (Friday) after a major earthquake hit Japan – once again in the Fukushima region.
• The London Metal Exchange had a glitch shortly after trading in it restarted (Thursday) but when it did get back eventually, the price came under a lot of selling pressure (Friday) both in London and Shanghai.

Meanwhile, there were some interesting developments in crypto:

• El Salvador prepared for the launch of a “bitcoin bond” (Monday) to raise at least $1bn to boost its “pile” of bitcoin, but this looks like desperation on the part of  President Nayib Bukele as his country is in a dire financial situation with a massive budget deficit.
• It seems like NFTs are cooling off at the moment as average prices are slowing, as are daily volumes traded (Monday). Is this just a pause for breath before going to the moon or the sign of things to come?

Various industries and geographies are facing difficulties as sanctions against Russia broaden.

• In AGRICULTURE, German drug and agrochemical conglomerate Bayer is threatening to stop supplying Russia with crop supplies (Tuesday) unless it ceases its war against Ukraine. In the meantime, we all face the prospect of food shortages and higher prices (Monday) as Russia is the world’s biggest exporter of fertiliser. As with oil, red lines are having to be crossed in order to ensure that supplies suffer as little disruption as possible and there’s even talk about reintroducing genetically modified crops (Wednesday) as Ukrainian farmers won’t be able to plant for the next season.
• In AVIATION, aeroplane lessors are facing big losses (Tuesday) because they can’t get their planes back and insurance companies are already starting to cancel policies related to Russia. Putin signed a new law allowing aircraft to keep flying (Tuesday) by allowing them to be registered domestically, but would you want to fly on a plane that isn’t being maintained by the companies that specialise in this and with no supply of parts except from what they already have available?? Things are actually going pretty well for airlines in the US (Wednesday) as passenger demand is such that price rises aren’t putting them off. On the military side of things, Germany is buying Lockheed Martin’s F-35s (Tuesday) just weeks after it announced a major increase in defence spending.
• OTHER INDUSTRIES are feeling repercussions. In the AUTOMOTIVE INDUSTRY, Tesla just raised the price of all of its cars (Wednesday) because of the rising price of parts, the INSURANCE INDUSTRY is bracing itself from massive numbers of claims (Thursday) coming from the Ukraine/Russian war, and the PROFESSIONAL SERVICES INDUSTRY is facing a tricky withdrawal (Monday) that could take quite some time in many cases while the listing pipeline in London dried up (Monday) and Russian firms were kicked out of FTSE indexes (Tuesday). Meanwhile, funding for start-ups may take a dive (Monday) as Russian money is shunned.

Russian individuals are also being targeted. Various oligarchs, including Roman Abramovich, are having their assets seized and movements restricted (Wednesday) and Grant Shapps even threatened to “cripple Russia’s aviation and shipping sectors” (Monday) while luxury British brands like Aston Martin, Bentley and Rolls-Royce have blocked exports to Russia (Wednesday) and Instagram was shut down (Wednesday).

• Consumers saw their wages fall at their fastest rate since 2014 (Wednesday) as wage rises failed to keep track of inflation, they are facing higher bills and rent (Monday), rising food prices because fertiliser prices are skyrocketing (Tuesday) and Uber’s raising its prices by 20% (Tuesday). On the positive side, the UK has decided to scrap remaining Covid restrictions (Tuesday).
• In terms of consumer behaviour, although Deliveroo talked about a disappointing outlook (Friday) and Ocado suffered from shoppers returning to physical stores (Friday), speedy rival Getir got a stellar valuation at its latest funding round (Friday) as investors continue to gamble on the belief that people want things within ten minutes and it turns out that Trainline is benefiting from more people buying e-tickets (Friday).

As for retailers…

• In the US, retail sales rose by 0.3% in February (Thursday) while Walmart announced plans to hire 50,000 US workers by the end of April (Thursday).
• In the UK, M&S is launching in-store branches of the Early Learning Centre (Monday), H&M is selling third-party fashion brands (Friday) and DFS is raising its sofa prices (Wednesday) to protect its margins.

• Apple faces potential European challenges in the form of new legislation (Friday) that will loosen its stranglehold on app sales.
• In semiconductors, manufacturers stockpiled raw materials so should be OK for a while (Monday), Intel announced plans to spend €33bn on manufacturing facilities in Europe (Wednesday) and Arm is going to cut its workforce by 12-15% (Wednesday) as part of a slimdown ahead of an anticipated flotation after owner SoftBank failed to sell it to Nvidia.
• HSBC is closing down physical branches but expanding in the metaverse (Friday) following in the steps of JP Morgan.
• P&O sacked 800 of its staff over a video call (Friday), which obviously didn’t go down well. A lot of discussion is ensuing as to the legality of this very drastic action…

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story of this week was Singing dog performs Diana Ross in impressive karaoke duet with owner (The Mirror, Nia Dalton), whose gusto is something to be admired 🤣!

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 DAY IN BRACKETS 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.

Another dramatic week, eh…

• China announced its latest GDP growth target (Monday) which came in at only 5.5% – its lowest level for thirty years! This took into account its zero-Covid approach, the disruptive effect of its “common prosperity” policy and probably the fallout from the Russian invasion of Ukraine. Interestingly, there was a sharp increase in defence spending – something that Taiwan in particular will take note of (Wednesday) as there is a real risk that China could be to Taiwan what Russia is to Ukraine at the moment.
• US inflation hit 7.9% in February (Friday) – its highest level in 40 years! This put even more pressure on the Fed to raise interest rates, but Fed chief Powell has already flagged that he will be in interest rate hike mode at the next meeting.

In COMMODITIES AND ENERGY…

• Everyone is trying to look for alternative sources of fuel (Tuesday) given that the US and UK have now banned Russian oil imports (Wednesday) but Germany isn’t being so strident about it (Tuesday) because it needs it so much. Things are getting so desperate that the US is talking to controversial Venezuelan president Maduro again about supplying more oil (Wednesday) and BoJo is putting the possibility of fracking on the table again (Thursday) but despite rivals like Shell pulling out of Russian oil interests (Wednesday) French company Total has decided to stick with its Russian assets (Monday).
• In METALS, gold breached the $2,000 level (Tuesday) but the real star of the show this week was nickel. Nickel prices jumped so much that trading was suspended in London (Wednesday) and in Shanghai (Thursday). It is thought that the nickel price was also powered by a short squeeze (Wednesday). Carmakers are now worried that EV buying will suffer as a result (Wednesday) because nickel is a main “ingredient” of EV batteries, batteries are generally the most expensive part of an EV and the huge price rise in the metal will be passed on, meaning that EVs will be even more expensive than they already were.
• In ENERGY, there was good news for Rolls-Royce’s plans to build Small Modular Reactors (Tuesday) as business secretary Kwasi Kwarteng asked the government to assess its designs. Clearly there is an increased sense of urgency to get these mini-nuclear reactors out there to solve our energy shortfall.

Meanwhile, there were some interesting currency developments this week…

• Bitcoin jumped up suddenly this week (Thursday) on news that federal agencies are now officially looking into crypto regulation. Crypto fans are trying to put a positive spin on this saying that this is a sign it’s being taken seriously, but I think this is not a story to get excited about. If anything, regulation will restrict activities – not free them up! Also, the optics of Russian oligarchs ferreting away their ill-gotten stashes via digital assets isn’t a good look, so you do wonder why everyone’s getting so excited about this. A bit like turkeys voting for Christmas, surely? In the UK, the FCA is cracking down on crypto ATMS (Monday), which is says are being used to launder money – and later on in the week, it ordered them all to shut down. There are/were 81 of these machines, mainly in convenience stores and supermarkets.
• Russia’s rouble fell to record lows versus the dollar (Tuesday) as fears continue of a run on banks where everyone tries to get their cash out at the same time, something that could collapse Russia’s financial system.

The Russian war against Ukraine continued to rage and there were appeals for China to get involved and act as mediator (Monday). However, China’s not known for doing this and I suspect there will be limits to its involvement given its close relationship with Russia.

In ACTIONS…

• Visa, Mastercard and Amex pulled out of Russia (Monday) meaning that transactions for cards issued in Russia won’t work outside Russia and those issued elsewhere won’t work in Russia, meaning that banks started to over over to the Chinese UnionPay system (Monday) in response.
• “Magic Circle” and Big Four accountants cut links with Russia (Tuesday) as investment banks Goldman Sachs and JPMorgan joined them (Friday), as did the world’s biggest insurer, Marsh McLennan. Putin warned companies pulling out that they could have their assets seized (Friday).
• Still, a growing list of companies continued to head for the exit (Friday), including Next (Monday), McDonald’s (Wednesday) and many luxury firms (Wednesday).
• The net continued to close in on oligarchs like Roman Abramovich (Friday) as assets were seized/frozen and there was talk of Russia defaulting on its debt (Friday).

In CONSEQUENCES…

• A food crisis is looming (Monday) as the wheat price keeps climbing due to the fact that the war is going to disrupt supply (Friday) as, combined, Russia and Ukraine account for 12% of total calories traded in the world. The fact that Ukrainian farmers won’t be able to plant now would imply that the shortage will continue for some time yet. Also, the price of fertiliser is going to rise with energy prices (Tuesday) as producers including CF Industries and Yara International look like they are going to double their prices. This will push food prices up as well.
• There’s a shortage of building materials (Monday) as rising energy costs are leading to an increase production costs, which is hitting small and medium-sized companies particularly hard.
• Russian airlines have been decimated due to sanctions (Monday) and Russian flag-carrier Aeroflot is seeing years of progress just evaporate (Friday). Talking about aviation, jet leasing firms are facing a massive $10bn hit (Friday) because they can’t get their planes out of Russia. The Russians are changing the law making it illegal to hand back any aircraft. More broadly, all airlines are facing difficulties (Thursday) as a combination of rising fuel prices and the inability to fly over Russian airspace (which makes routes longer) is going to make fares more expensive and/or reduce their margins.
• Russia’s second biggest bank, VTB, is preparing to pull out of Europe (Monday), not long after its larger rival Sberbank did the same. Mind you, domestic business is likely to suffer (Wednesday) as customers withdraw their savings.
• Nickel prices shot up (as I said above), which prompted concerns that electric cars are going to get more expensive (Tuesday), as nickel is important for batteries, which are generally the costliest part of an EV.

• House prices rose at the fastest rate for 15 years (Tuesday), according to the latest Halifax figures but many homeowners have decided to spend to extend (Tuesday) if the number of applications for extensions and home improvements were anything to go by. It’s going to cost you more to console yourself with a Greggs sausage roll because of rising wheat prices (Wednesday) and you won’t be able to binge-watch your blues away without shelling out more money as Netflix is increasing its subscription prices (Friday).
• Despite all the pressures, the latest Barclaycard data is showing that consumption increased last month (Tuesday) as offices opened up, but it is possible that we’re just spending on the same amount of stuff – but we’re just paying more for it!

• Orange and MasMovil are in exclusive talks to combine in a €19.6bn deal (Wednesday) which, if it went ahead, would leapfrog them over Vodafone into second biggest telecoms company in Spain behind Telefónica.
• Google bought cybersecurity company Mondiant for $5.4bn (Wednesday) in an all-cash acquisition that will really help Google close the gap with big rivals Microsoft’s Azure and Amazon’s AWS.
• China seems to be limbering up for some Russian bargains (Wednesday) as the rouble continues to plummet and more companies suffer with sanctions.
• Back home, it turns out that Stagecoach has ditched National Express’s all-shares offer (Thursday) for an all-cash offer from German investor DWS. Given the founders of Stagecoach are keen to leave, it’s hardly surprising that they are inclined to accept a higher all-cash offer. It will also get less regulatory hassle given that DWS isn’t a transport company! It was also interesting to hear that the prospects for M&A in the UK are looking up (Monday) according to a survey by UK broker Numis. This was especially interesting to hear given that Peel Hunt said only recently that deal flow had been slowing down.

• TikTok is having a tough time at the moment (Monday) because although the platform is very popular for sharing Ukrainian-related videos, there has been a huge proliferation of false/fake news. This will no doubt lead to more calls for increased content moderation.
• ESG investment may change due to the Russian invasion of Ukraine (Thursday) because a lot of ESG funds have shunned defence companies because they make weapons/fighter jets etc. but there is now a growing argument that they should be included – and that by avoiding investment, the companies themselves have lost out. Many governments have already committed to spend more on defence budgets because of Putin’s actions, so spending on defence-related equipment is bound to rise exponentially.
• Toyota’s truck arm, Hino, lied about emissions tests (Tuesday), which prompted an investigation. Its share price fell by a chunky 17%, its biggest one-day drop in 20 years!
• BMW shares took a dive despite it publishing its biggest profit in its history (Friday). Sometimes the journey is more exciting than arriving at the destination!
• China’s smartphone makers are having trouble in Russia (Thursday) because the weakening rouble means that companies like Huawei, Oppo and Xiaomi are having to raise their prices constantly. Shipments have been cut for now.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” stories of this week were the weirdly cheesy A self-driving car that delivers ramen is Nissan’s newest automotive innovation (SoraNews24, Casey Baseel) and, of course, the secret to fluffy towels in Mrs Hinch fans swear by £1.50 hack to get old towels feeling ‘softest they’ve ever been’ (The Mirror, Courtney Pochin).

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 DAY IN BRACKETS 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.

Russia invaded Ukraine. This is the biggest story. However, here are some more events/developments in world economies…

• Putin launched his attack and demanded Ukraine surrender (Thursday) in what could be the biggest conflict in Europe since WW2. Oil prices rose, stock markets fell and Moscow closed the stock exchange. Russia’s central bank supported the ruble. The invasion was widely condemned but world leaders were divided on whether to eject Russia from the SWIFT payment system (Friday).
• In the UK – business activity increased (Tuesday) and BoJo lifted Covid restrictions (Tuesday). He did it without putting any other guidance in place, meaning that there’s likely to be increased employer liability risk (Tuesday) further down the line regarding unfair treatment/putting workers at risk etc. A City “Big Bang” is being discussed in earnest (Tuesday) to “liberate” the UK from European rules post-Brexit. It sounds like this could free up capital that could be invested elsewhere, but we’ll have to wait for specifics. Meanwhile, a third consecutive UK interest rate rise could be on the cards (Tuesday), although I do wonder whether the situation in Ukraine could give cause to delay this.
• In COMMODITIES – oil prices have massively benefitted the oil supermajors (Monday) and, because of the current Russia/Ukraine situation they’ve breached $100 a barrel for the first time since 2014, which is also having a knock-on effect on petrol prices (Tuesday). High energy prices are having unusual effects on price comparison websites like MoneySupermarket and GoCompare (Monday) as there aren’t any cheap deals to offer!

• American consumers are increasingly seeking out experiences (Friday), meaning that things like theme parks are doing particularly well right now.
• In the UK – consumer confidence is draining away (Friday) and even the wealthy are showing signs of reining things in (Friday) as wealth manager St James’s Place is seeing a slowdown in funds inflow. For the rest of us, energy bills are heading towards epic levels (Friday) but we’re all having a beer (Friday), according to Anheuser-Busch InBev, the world’s biggest brewer. Residential property prices continue to rise (Monday) and it’s interesting to note that, in commercial property, Canary Wharf Group is offering a more flexible office service (Monday), which will just give the likes of WeWork etc. more competition in this space.

• Stellantis made a ton of money (Thursday) despite chip shortages, while flotations are being mooted by Porsche (Wednesday) and Lotus (Monday). Aston Martin is getting more optimistic (Thursday) but Mini has had to cut production (Thursday) as semiconductors were prioritised for more profitable vehicles.
• In terms of batteries, Tesla is reverting to old tech (Wednesday) due to the massive rise in raw materials prices. It’ll be using iron-based batteries that aren’t as powerful, although one advantage is that they’re less likely to catch fire.

• Klarna announced a reward programme (Tuesday), which is controversial because it is, effectively, rewarding people for getting into debt.
• Strong deal flow benefited Barclays hugely (Thursday) but small and mid-cap UK specialist broker Peel Hunt said it’s seeing a slowdown (Thursday) as corporates are holding back on flotations and M&A due to concerns about the economy and the Ukraine situation.

• Meta continues to push Reels (Wednesday) as short-form video continues to power engagement.
• Apple had mixed news this week as US lawmakers are looking at app store charges (Monday) on the one hand but there’s good news for hands-free fans as the company combined with Google, Apple and Samsung to have a common language for smart-home tech (Monday) called Matter. It’ll be rolling out this year and will mean that you will be able to speak across all devices, which could hasten development of the much-vaunted Internet Of Things, which hasn’t really taken off as much as the tech companies hoped in the past.
• Chinese edu-tech company New Oriental got hammered (Wednesday) as the online education company announced massive losses following the whole clampdown on edu-tech by Chinese authorities.
• Donald Trump’s Twitter alternative, Truth Social launched this week (Tuesday), but had a bumpy start as huge numbers of users tried to sign up.

• There’s potentially a massive scandal brewing at Peloton (Wednesday) as allegations have come to light that the company was selling rusty bikes at premium prices and offering a no-returns policy. It’s not a story that’s caught on particularly, but the FT has cited some pretty damning evidence…
• In PHARMACEUTICALS – AstraZeneca is a step closer to launching a new breast cancer treatment that could replace chemotherapy (Tuesday) and Moderna thinks that the pandemic will “end” this year (Friday), adding that its additional seasonal booster will be needed for the over-50s and vulnerable.
• In SIGNS OF RECOVERY – InterContinental Hotels Group is seeing business heading towards pre-pandemic levels (Wednesday), Heathrow is expecting a major pick-up in business in the summer (Thursday) and advertising giant WPP continues to see its business grow (Friday).
• In CRYPTO – Coinbase had a stellar Q4 (Friday) as crypto trading volumes boomed more than the market expected but I would have thought that current geopolitical events may have a negative impact in future quarters.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

In a very very terrible week, I thought that THIS VIDEO gives us welcome respite for a minute or so. If you’ve never seen a dog ordering a pizza before, click on the link and get involved 👍.

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 DAY IN BRACKETS 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.

The Russia/Ukraine drama got increasingly tetchy, Lithuania put China’s back up and consumers kept spending…

• One of Ukraine’s main airlines, SkyUp Airlines, suspended flight sales (Monday) because its insurers refused to cover aircraft flying in Ukrainian airspace. Other airlines have been cancelling as well, global markets wobbled as geopolitical tensions heightened and sentiment waxed and waned according to what Putin said. France weighed in, calling for a re-jig of Europe’s security framework (Thursday) to combat future incidents, which is ironic considering how it wasn’t so long ago that the French were trying to cosy up to the Russians. It was also interesting to see how China supported its ideological ally (Thursday) in its demands not to let NATO expand the number of members – but it stopped short of supporting an invasion of Ukraine. The threat of possible sanctions hung in the air and it would seem that Russian companies with a secondary listing on the London Stock Exchange might be decent targets (Friday). Rozneft, Gazprom and Lukoil could be targeted along with companies like Evraz and En+ Group, but this is all speculation at the moment.
• In the US – interest rates look even more likely to go up, according to the latest meeting minutes (Thursday) and rising producer prices put even more pressure on (Wednesday).
• In ASIA – Japan’s GDP grew at an annualised 5.4% (Wednesday) as a relaxation in Covid restrictions helped to boost consumer spending going into the end of 2021 but the economy did lose steam in December as Omicron hit. Consumer spending accounts for over 50% of Japan’s GDP.
• In EUROPE – we saw that the Eurozone’s trade deficit hit its highest level in 13 years (Wednesday) and, amazingly, the ECB’s chief economist changed his position on inflation (Friday), admitting for the first time that inflation was unlikely to dip below 2% for the next two years. It was also interesting to see China banning imports from Lithuania (Monday) in a fit of pique because Lithuania dared to recognise Taiwan as a country rather than a Chinese territory. It’s the first time China has imposed such a broad ban and the EU is taking a case against China to the WTO in protest. It will be interesting to see what the outcome is here and if this will be China’s policy going forward or whether it’s just rattling everyone’s cage.
• In the UK – economists now think that the rate of inflation could see a major rise (Thursday) from 5.5% in January to 7.8% in April! This is way higher than was predicted in the October budget.
• In COMMODITIES – Russia/Ukraine tensions pushed oil prices up (Monday) which is pushing up petrol prices (Tuesday). Prices of raw materials and food staples are continuing to rise (Monday) thanks to red-hot demand for things like metals, battery-grade lithium carbonate and coffee beans.
• In CRYPTO NEWS – America’s SEC slapped BlockFi with a $100m fine (Tuesday) for offering interest-bearing accounts linked to cryptocurrency without registering them as securities first and in the UK, HMRC seized three NFTs related to a fraud investigation (Monday). It was interesting to hear that the Financial Stability Board (FSB), which oversees financial authorities in 24 countries, is coming to the conclusion that crypto needs taming (Thursday) whilst VC fund Sequoia Capital, is going to allocate at least $500m in digital assets (Friday) as part of a restructure.

• In EMPLOYMENT/WAGES TRENDS – UK employers are looking to award pay rises of 3% this year (Monday), according to a survey conducted by YouGov for the Chartered Institute of Personnel and Development – the highest rise for ten years. Although this headline rate implies that wages are not keeping pace with inflation, it seems that “real” wages (wages taking into account inflation) are better than than they were pre-Covid (Wednesday). Workers are returning to their offices (Friday), although occupancy is obviously way lower than it was pre-Covid, but commuting into London is about to get more expensive (Tuesday) as London mayor Siddique Khan is going to hike bus and tube fares by record amounts.
• Consumers are facing major pressures on their household budgets. Buying a used car will now cost £20k (Wednesday) as demand has shot through the roof, prices for household items are going up (Thursday), something that is likely to continue according to Nestle and Reckitt (Friday) and there have been rumblings about the government imposing a new road pricing system (Friday) that could hit EV owners. In the meantime, rents are rising (Thursday) and lenders are pulling their cheapest mortgage rates (Thursday) in anticipation of more interest rate increases from the Bank of England.
• In CONSUMER TRENDS – Americans are primed to spend (Friday) as a number of companies do brisk business, Gucci is benefitting from luxury spending (Friday), DoorDash’s strong performance shows that demand for takeaways remains unabated (Thursday) and tourism is sparking demand for planes (Friday) and hopes for places like Australia (Friday), which is opening up next week (well, unless you are Novak Djokovic)!
• As for RETAILERS – Amazon made up with Visa (Friday), Walmart put in a solid performance (Friday) and Ocado expanded its deal with France’s Casino (Friday), in a rare bit of good news for the online retailer. It was also good to hear that John Lewis is getting back to profitability (Monday), with Waitrose being a major driver.

• Ericsson admitted to bribery (Thursday) where it may have “inadvertently” paid terrorists Islamic State to transport equipment through terrorist-controlled areas. Investors didn’t like this and the stock got sold off.
• The Texas Attorney-General filed a lawsuit against Facebook’s parent Meta (Tuesday) alleging that its face recognition tech violated the state’s privacy protections. It’s seeking civil damages in the hundreds of billions of dollars. Funnily enough Meta’s going to fight this vigorously.
• Google said it would be cutting ad-tracking (Thursday) quite some time after Apple did! It’s done well from ads since advertisers have switched from Apple but advertisers will no longer be able to track users across apps on Android smartphones.
• The UK Home Office is looking at ways to compel big internet companies to take more responsibility for content on their platforms (Wednesday). Home Secretary Priti Patel is looking to make changes in the upcoming Online Safety Bill.
• Meanwhile, cybersecurity rises up the priority list for companies as insurance premiums rise for cyberattacks (Monday) and a new dating app Fluttr launched on Valentine’s Day (Monday). It’s different from others in that it makes all users complete biometric ID verification before they can participate.

• In CAR NEWS – Chinese company Luxshare Precision Industry is looking to assemble EVs (Wednesday). It’s a competitor to Foxconn, and also an assembler for Apple. In the UK, the SMMT is pushing for a proper charging point “road map” with timings (Wednesday) to give more people confidence to go electric. Britishvolt also secured even more money to pour into its Northumberland gigafactory (Wednesday).
• Rolls-Royce made the headlines for some interesting things this week! It is on track to produce Britain’s first generation of zero-emissions hydrogen engines for trains (Monday), it’s also aiming to roll out an electric passenger plane by 2025 (Tuesday) and is on the lookout for sites for its SMRs (Thursday), starting with de-commissioned nuke sites.
• SUPPLY CHAIN problems are continuing. The chicken industry is bracing itself after some cases of bird ‘flu were found in the US (Tuesday), tough timing considering that meat prices are already going up. There could also be a shortage of paper (Monday) as European printing companies are warning that food and consumer goods industries could suffer particularly acutely.
• In other news bits, SPACs continue to fade in popularity (Tuesday), Wizz Air announced plans to go transatlantic with cargo (Tuesday) and US hotel group Hyatt seems to be turning a corner (Thursday), something confirmed by similarly solid performances from rivals Marriott and Hilton. Also, after all the recent hoo-hah, Peloton might not be sold after all (Tuesday) as the new CEO doesn’t seem to be keen on the idea.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

It was very easy to pick my favourite “alternative” story this week. I just had to be this: Puzzled dogs play whack-a-mole with sausages and get confused when they disappear (The Mirror, Nia Dalton). Absolutely hilarious!

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 DAY IN BRACKETS 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.

The Russia/Ukraine drama continued, talks about a potential windfall tax caused a kerfuffle, prices rise everywhere, Arm/Nvidia collapsed and Peloton saw its CEO step down. But apart from that is was quite quiet 🤣…

• With the Russia/Ukraine situation – US president Biden and Germany’s Olaf Scholz presented a disjointed view on Nord Stream 2 (Tuesday) and it looks like any sanctions that Europe takes against Russia will be messy (Thursday), especially given that Russia is Europe’s biggest energy supplier, a major commodities exporter and owe-er of money. Later in the week, western nations advised citizens to leave Ukraine as the situation worsened.
• In the US – inflation hit its highest level for 40 years (Friday), but inflation is rising pretty much everywhere you look (Friday) and it seems that it’s always the poorer citizens that get affected the most as they are the ones who spend the highest proportion of their income on the basics like bills and rent.
• In EUROPE – the ECB’s president backpedalled on recent statements (Tuesday) that the market interpreted as the central bank potentially looking at making an earlier-than-expected interest rate rise.
• In the UK – BoJo is mooting the brave/stupid move of ending requirements to self-isolate after a positive Covid test (Thursday) but we’ll have to see whether this does indeed come forward a month earlier than expected, as is being speculated.
• In COMMODITIES – aluminium prices hit their highest level since 2008 (Wednesday), which will put even more pressure on producer prices considering that the metal has so many applications. Aluminium also uses a huge amount of electricity to produce, which doesn’t bode well for the likelihood of prices coming down any time soon…
• In OIL AND GAS – there was a lot of talk this week about the UK government imposing a windfall tax on oil and gas companies. BP rejected the suggestion (Wednesday) despite having announced not only its best results for eight years, but also that they were going to give some of that money to shareholders and do a share buyback! The UK oil regulator also voiced its opposition to a windfall tax (Thursday). As if to reinforce just how well oil companies are doing right now, French rival Total announced massive quarterly profits (Friday) and its very own share buyback! US shale oil producers continue to hold back (Wednesday) despite sky-high oil prices because they are still smarting from over-investing too early in previous booms. There was a sobering bit of news in a report from the Oil and Gas Authority and Climate Change Committee (Friday) which predicted a huge uptick in gas imports as North Sea reserves run down.
• In SUPPLY CHAIN NEWS – the world’s #2 container shipping company Maersk predicted that supply chain woes will calm down in the second half (Thursday) but companies are finding things really difficult in the interim (Thursday).
• In CRYPTOCURRENCY NEWS – it turns out that January saw record outflow of tokens and cryptocurrency (Monday) but then again Bitcoin staged a recovery this week (Tuesday) and crypto exchange Binance put a large slug of money into Forbes (Friday).

• In the US – Tyson Foods, America’s biggest meat processor, said that rising meat prices have failed, so far, to phase consumers (Tuesday) while Chipotle raises prices in response to climbing raw ingredients prices (Wednesday). Ride-hailer Lyft also raised prices (Wednesday) and its results followed the success of Uber’s Q4 numbers (Thursday). Car insurers are also increasing premiums (Thursday) because repairs/parts prices are on the rise – yet another rising cost that consumers have to bear!
• In the UK – house prices continue to rise (Tuesday) but at a lower rate as Barratt booms (Thursday) while the north-south divide in terms of price rises continues (Thursday). Lenders are withdrawing their cheapest mortgages (Thursday) in anticipation of more interest rates rises from the Bank of England, food prices look like they will continue to rise (Monday), according to Tesco’s chairman and apparel retailer Joules increases its prices (Wednesday) to mitigate soaring costs and supply chain disruptions. No wonder that both Deloitte’s consumer confidence tracker (Monday) and Bank of America’s research (Wednesday) point to consumer wobbles about the cost of living and research from the British Retail Consortium pointed to more potential pressure on consumer spending in the coming months (Tuesday).
• In terms of SPENDING TRENDS – luxury continues to do well! Chanel is managing to put through price rises with ease (Monday), posh watches are selling well (Friday) and L’Oreal put in a decent performance as well (Thursday). At the “normal” end of things, Disney+ subscribers numbers continued to rise (Thursday), showing that there is still life left in the market, something that Netflix needs to be struggling with at the moment. UK shops are restaurants are seeing a recovery in footfall (Friday) after the Omicron dip we experienced at the end of last year and beginning of this.
• In GROCERY RETAIL NEWS – Ocado has lost all of its pandemic gains (Wednesday) and Amazon got classed as a supermarket (Thursday), which means it’ll have to obey tighter rules regarding suppliers. It was also interesting to see how supermarkets are trying to keep a lid on prices (Tuesday) via a mix of cutting staff costs, putting pressure on suppliers, shrinkflation and cutting less popular product lines, among other things.

• US budget airline Frontier put in an offer to buy rival Spirit for $6.6bn (Tuesday) in a move that will help them to compete against the “big four” airlines American, Delta, Southwest and United.
• Tata took the reins at Air India (Tuesday) in a bid to turn fortunes around at the national flag carrier that has had problems for the last twenty years.
• Nvidia’s proposed purchase of Arm fell through (Wednesday) and it looks like Arm’s next move will be to float in New York rather than London.

• Apple announced a new service (Wednesday) whereby you can use your iPhone to pay merchants by tapping their Apple device. It also turns out that Apple is prioritising iPhones over iPads, but given how important phones are to Apple this is hardly surprising!
• Google is being sued by PriceRunner (Tuesday) as the latter is being accused by the former of unfairly prioritising its own price comparison service over others.

• It was a dramatic week for Peloton as rumours of bidders emerged (Monday) – and that was closely followed by its CEO stepping down (Wednesday) and then activist investor Blackwells Capital reeling off a number of potential suitors (Friday)
• It was interesting to see parts maker Bosch earmarking €2bn to retrain some of its 400,000 employees (Thursday) to keep them relevant as carmakers switch to EVs.
• AstraZeneca announced record annual revenues (Monday) as it unveiled its first profits from its Covid vaccine. Will it be able to match the stellar profits at rivals who made money from their vaccines right from the start?

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

Given that I included quite a lot of stories about dogs this week it probably won’t surprise you that my favourite “alternative” story for this week was Talented Labrador performing yoga with his owner steals people’s hearts (The Mirror, Nia Dalton). Amazing!

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 DAY IN BRACKETS 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.

This week was dominated by inflation, tech ups and downs and Joe Rogan. What a week!

• Eurozone growth weakened (Tuesday) as the latest figures from Eurostat showed that the bloc’s output grew by a pretty sluggish 0.3% in Q4 on Omicron impact and rising energy prices, with particular weakness in Germany being offset by stronger performances from France, Italy and Spain. It’s possible that this could improve once tourist-centric countries like Spain start to pick up the pace as travel restrictions are lifted. Meanwhile, we saw inflation in Germany and Spain remaining high (Tuesday), something that was also reflected in the latest figure for the Eurozone hitting a new high (Thursday) – with rising energy and food prices being the main drivers. Markets were predicting at least two 0.1% interest rate rises this year for the Eurozone (Wednesday), but although the ECB admitted concerns about the current situation regarding inflation (Friday) it continued to do nothing!
• In Italy, Sergio Mattarella was re-elected as president of Italy for another term (Monday), something that he didn’t really felt that he wanted to do, but something he felt duty-bound to continue. Investors breathed a collective sigh of relief because they thought that the popular Mario Draghi would not be able to be replaced with a decent PM, so this created a new status quo.
• In Turkey, we saw inflation getting further out of control (Friday) as President Erdogan’s “unique” way of dealing with inflation doesn’t seem to be working just yet as it climbed from an eye-watering 36.1% in December to 48.7% in January! This puts our fears of the prospect of 7.5% inflation into perspective, though…
• In the UK, Rishi Sunak announced measures to help people pay higher utility bills (Friday), the Bank of England raised the interest rate from 0.25% to 0.5% (Friday) and markets are indicating that there is a 91.5% chance that there will be another 0.25% interest rate rise in March (Friday), followed by another one in May – although Alistair Bailey said that the market shouldn’t get too carried away. Whatevs. I don’t think anyone cares what he says at the moment considering his uselessness last year. He needs to build back some credibility if he wants to keep his job IMO.
• In oil news, oil supermajor Exxon posted its highest profits since 2014 (Wednesday) due to stronger-for-longer oil and gas prices just one week after rival Chevron said something similar. It is also interesting to note that US oil frackers are slowing down production (Friday), which is interesting considering the current strength in the oil price.

• The US job market remained tight (Wednesday) while consumer confidence waned (Wednesday) and it seems that consumer spending is shifting away from goods to more services (Thursday).
• In the UK, house prices were off to a strong start in 2022 (Wednesday), powered in part by a surge in demand for 10-year fixed rate mortgages (Wednesday), but lenders started to pull their cheapest mortgage deals (Thursday) in anticipation of more interest rate rises. Still, research from Savills showed that homeowners made big gains on their properties last year (Monday) due to this aforementioned strong market.
• UK consumers are facing a number of challenges. Food and drink prices are set to rise (Tuesday) and many will face a stark choice between eating or heating (Tuesday) as bills are set to rise by a huge amount.
• In RETAIL, French supermarket operator Casino had a profit warning (Tuesday) as demand for its city-centric formats waned due to the Omicron outbreak. Meanwhile, UK retailers faced a shaky start to 2022 (Friday) as shopper numbers and footfall went lower. However, further out, they are hoping for a boost thanks to Jubilee celebrations this year (Monday). Tesco ditched its discount “Jack’s” brand (Tuesday) and cut the nightshift in some stores (Wednesday) in order to bring costs down. Apparel retailer Joules had a shocking profit warning (Wednesday) which sent its share price down by over 40% (!) and private equity firms lined up to buy Boots (Monday) from current owner Walgreens Boots Alliance.

• Spotify had a nightmare due to a backlash against podcaster Joe Rogan (Monday) and had to hurriedly put in place content warnings after Neil Young and Joni Mitchell took their music off the platform in protest. It also called into question Hipgnosis’ business model (Tuesday) because, despite paying Neil Young $150m for his back catalogue it was powerless to stop him from removing his music from Spotify. Joe Rogan even apologised and said he’d work on making a more balanced offering, although I have to say that this sounds like it won’t work because I suspect that controversy is why his podcast got so popular in the first place! Spotify did say that it reported a rise in the number of users (Thursday) but that wouldn’t have included the latest developments with Joe Rogan etc.
• Meta had a bad week and saw its share price crater (Thursday) due to a downbeat assessment of its prospects in advertising and the fact that it continues to lose the younger demographic on Facebook (Friday), although I think it is hanging on in there with Instagram.
• On the other hand, Google saw stellar Q4 results due to a boom in advertising (Wednesday) and announced a 20-for-1 stock split.
• Snap announced its first quarterly profit (Friday) and its CFO said that its advertising business recovered faster than expected in the wake of Apple’s new privacy rules.
• Amazon announced an increase in Prime prices in the US (Friday) as well as bumper Q4 profits.
• Staying with the tech space, Vista Equity Partners and Evergreen Coast Capital got together to conduct a leveraged buyout of Citrix for $16.5bn (Tuesday) and Sony bought Bungie for $3.6bn (Tuesday), which will make it the third big acquisition in the sector this year after Microsoft’s purchase of Activision Blizzard and Take Two Interactive’s purchase of Zynga.

• Aston Martin committed to a more electric future (Wednesday) by outlining intentions to sell only electric or hybrid cars within four years! It said that it wants to launch plug-in hybrid models in two years and fully electric cars by 2026. Ferrari put in a solid performance (Thursday) as it managed to avoid the semiconductor shortage suffered by volume manufacturers amid continued strong demand for its vehicles. It delivered over 20% more cars last year and profits leapt by 37%. Meanwhile, GM announced strong earnings for 2021 (Wednesday) but it wasn’t such a good week for Tesla as it announced a recall (Wednesday), but it could have been way worse as this just involved an update delivered over the internet.
• Constellation Automotive (which owns brands including Webuyanycar and Cinch) bought 20% of UK dealership Lookers (Tuesday), which probably makes sense right now as sales of used cars are still pretty hot right now.
• In BATTERIES, Britishvolt and its backer, Glencore, announced plans to build a lithium-ion battery recycling plant in Northfleet, Kent (Thursday) that can recycle lithium-ion batteries used in cars and electronic devices. The plant is expected to be up and running in 2023 and capable of recycling at least 10,000 tons of lithium-ion batteries per year, which roughly equates to about 50,000 electric car batteries. It will also be processing scrap from Britishvolt’s “gigafactory” in Northumberland.
• In SEMICONDUCTORS, Infineon is looking forward to another year of chip shortages (Friday) and the global chip industry is continuing to expand (Monday) as Intel, Samsung, TSMC and GlobalFoundries are all investing money in production to keep up with demand.

• Ryanair has hit turbulence in terms of bookings (Tuesday) and is going to offer flight discounts to boost demand after Omicron dented its prospects at the end of last year. Like other rivals, it is hoping for a strong second half of the year and is in a better financial position than competitors such as Wizz, EasyJet and Jet2.
• PayPal had a shocker after it slashed 2022 profit forecasts (Thursday) due to a slowdown in growth of online spending. Its former parent, eBay, is also continuing to push its own payments system and take some of PayPal’s market share.
• Restaurant chains in the US – such as Burger King, Denny’s and Domino’s – are cutting the number of discounted items on the menu (Monday) and/or reducing portion sizes in order to preserve margins while raw ingredients prices, wage bills and running costs all continue to climb. I suspect that if this isn’t already happening over here, it will!

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. I have also added to the “Themes for 2022” section. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

I didn’t find quite so many great “alternative” stories this week, but the lady in this article sounds hilarious: Woman leaves table gobsmacked after challenging them to Rock Paper Scissors (The Mirror, Paige Holland). 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 DAY IN BRACKETS 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.

This week was dominated by news about Russia/Ukraine, BoJo’s partying and some major Facebook developments.

• The IMF cut economic growth forecasts (Wednesday) in its latest World Economic Outlook report. It blamed the impact of supply chain issues and pandemic restrictions for the cuts but said that it thought fuel prices would “moderate during 2022-3” while supply chain issues and the effects of Covid would lessen as time goes on. Not particularly insightful, but there you go…
• The Russia/Ukraine situation continued to develop as the week wore on. Russian state media continued to up the ante with the broadcast of accusations against Ukraine (Thursday), the ECB asked the 115 banks it overseas in the Eurozone about contingency plans for an invasion and China threw its weight behind its Russian comrade (Friday).
• In the US, the Fed made clear signs that it would be raising interest rates very soon (Thursday), a move that got all the more pressing with the release of its latest GDP growth figure (Friday), which beat expectations.
• In the UK, the whole Boris Johnson/partygate scandal continued to escalate (Tuesday) with the “imminent” release of the Sue Gray report, which didn’t actually get released as expected. No-one seems to be emerging as a leading candidate for the PM’s position at the moment, but you would have thought that Liz Truss’s star got tarnished by revelations about the use of the government’s private jet to fly to Australia which would have cost the taxpayer about £500,000.
• In Europe, the latest IHS Markit PMI showed that Eurozone businesses had a weaker-than-forecast start to 2022 (Tuesday) but it looks like the Omicron effect isn’t going to be as bad as first feared.
• In cryptocurrency news, Bitcoin continued to weaken (Monday). Some said it was due to the “de-risking of portfolios” but I think it’s more to do with the threat of Russia potentially banning it (although it sounded like that assumption may have softened a bit towards the end of the week).

Meanwhile, there were some pretty notable developments in the world of energy and oil.

• Gas prices continued to climb as tensions rose as the week progressed with Russia/Ukraine/NATO/EU/US (Tuesday). Europe gets around 40% of its gas from Russia, most of which goes via Ukraine, and so prices are rising because it is feared that supplies could be interrupted by potential conflict. Analysts at Goldman Sachs think that gas prices will stay higher for three more years (Tuesday) on the assumption that energy shortages in Europe will continue.
• Oil prices hit $90 a barrel (Thursday) and many think they’ll hit $100 before long. Again, some of this is being driven by fears that a Russia/Ukraine conflict could hit supplies.

• Renault, Nissan and Mitsubishi committed to putting £17bn into EVs over the next five years (Monday) in an initiative dubbed “Alliance to 2030”. They will be pooling R&D costs and production facilities in France, Britain, China and Japan.
• Tesla announced a great set of results (Thursday) thanks to the major surge in demand for EVs. Its Model 3 became the second most popular vehicle in the UK and Europe’s most popular car.
• GM continued to commit to EVs and announced more detail on its plans to electrify (Wednesday) but supply chain problems forced Ford to stop taking any more orders for its popular $20,000 Maverick pickup truck (Tuesday) to give it time to catch up on its order book.
• In batteries news, Britishvolt signed a deal to start producing its first batteries (Monday) in the UK’s first ever gigafactory, LG Energy Solution continues to garner excitement (Wednesday) one week on from its flotation – which was South Korea’s biggest ever – as investors bet on it becoming a beneficiary of the ongoing US-China tensions.
• In charging news, the UK’s charging network came in for criticism from the MD of VW UK (Thursday) and a study conducted on behalf of British Gas showed that charging prices were highly variable (Wednesday) depending on your geographic location.

• Apple had a brilliant week this week! Not only did it regain its #1 spot in China for the first time in six years (Thursday), it also announced record sales and profits (Friday) thanks to booming demand for its iPhones and growing services business.
• Facebook had a mixed one as it admitted defeat in crypto (Thursday) on the one hand, but announced that it was developing the world’s most powerful AI-dedicated supercomputer (Tuesday) on the other.
• Microsoft took a bit of a battering this week (Wednesday), despite announcing a 20% increase in quarterly revenues, as the wider tech sector seems to be losing its lustre at the moment.
• Nvidia got a bit downbeat this week (Wednesday) as it looks like it won’t be able to buy Arm Holdings as it had originally hoped. None of the world’s regulators have approved it, so it looks increasingly like it’ll lose its $1.25bn security deposit to SoftBank.
• Ocado announced new lighter robots (Thursday) that can pick and pack groceries more quickly than current models.

• So although Ocado is benefiting from consumers doing “dry January” (Tuesday), UK consumers are still spending money on property as TSB returned to pre-Covid levels of profitability on record mortgage demand (Friday). The travel industry is hoping for a second half boom (Friday) with the likes of EasyJet, Saga and Wizz Air talking a good game, but the luxury sector also reported strong performances (Friday) as LVMH did particularly well in Asia and the US, something we’ve seen recently with Burberry reporting similarly.
• Amex is seeing rising card usage (Wednesday) as Americans are building up debt once more and Mastercard is also likely benefit from the spending boom (Friday) while Barclaycard’s latest figures highlight the increasing use of contactless (Wednesday).

• M&S is launching a new teleshopping service (Friday) by using influencers on a livestream. Shoppers can interact with them and “buy the look” in real time and I think that this could really catch on as it has already shown its popularity in China. M&S is the first major British retailer to do this, which is pretty surprising given its usually bland reputation.
• A report by EY said that almost 90% of major financial services firms plan to expand or set up UK operations (Wednesday), contrary to many predictions made pre-Brexit.
• The advertising industry is staging a big turnaround, according to the Advertising Association and WARC (Thursday). Inflation could limit upside but most areas of advertising are expected to continue to do well.

• In supply chain news, American chip inventory is running very low at the moment (Wednesday), which means that there is absolutely zero room for production shocks. Despite this, Intel announced a fall in earnings (Thursday), but that was because it is playing catch-up with rivals and investing in new facilities. Carmakers continue to see a shortage in chips.
• Chinese authorities are now turning their attention to vaping (Tuesday), more specifically at Huabao International Holdings, which makes flavours and fragrances used by tobacco manufacturers, and is looking at allegations of corruption.
• Calls are increasing for the chief of Peloton to be axed (Monday), with activist investor Blackwells Capital pushing for his removal in order to scale the business. It thinks that Peloton could be a decent target for a fitness-focused or tech company.
• The National Express/Stagecoach deal hit a bump in the road as the CMA said it would be investigating the proposed £1.9bn merger (Thursday).

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. I have also added to the “Themes for 2022” section. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

There was another easy “alternative story” winner this week with Olympic gold medalist skateboarder wears a kimono on the half-pipe (SoraNews24, Oona McGee). You don’t see a skateboarder wearing a kimono very often, now do you!

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 DAY IN BRACKETS 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.

This week was dominated by news about Boris Johnson’s survival, China challenges and Microsoft’s biggest ever acquisition. However, before we get into that, let’s tuck into a bit of macro:

• President Biden made an almost Trump-esque gaffe regarding the Russia/Ukraine situation (Friday) when he said that a “minor incursion” by Russian forces into Ukraine would not provoke a full response from the Allies. He had to retract this rather hastily given how offensive this was to Ukraine, but Putin is sitting pretty at the moment as he’s managed to split the newly-minted German coalition government (Tuesday) and NATO whilst giving away no concessions!
• Meanwhile, China is having a tough time as its GDP growth rate slowed to 4% year-on-year (Monday), its slowest pace for 18 months. It has been exercising extreme caution ahead of next month’s Winter Olympics and shut roads and suspended plane, train and bus services, which has been terrible for the economy. China cut its policy interest rate this week (Tuesday) in order to jolt it back on track.
• In ITALY, investors had a bit of a wobble as they worried about Mario Draghi becoming President in next week’s elections (Monday) because they thought he would leave a vacuum behind that would create a real void and potentially plunge the country back into the very turmoil he was brought in to tame! Maybe that wily old dog Silvio “bunga bunga” Berlusconi could save Italy from this and keep Draghi in the PM spot as he has, at the tender age of 85, thrown his hat into the ring as a Presidential candidate (but no-one really thinks he stands a chance)…
• In the UK, inflation hit a near-30 year high of 5.4% (Thursday). Raw materials price rises have been causing small and medium-sized builders to go out of business (Monday) because they just can’t make any money and road freight rates shot up by almost a third last year (Monday), which all add up to higher prices that are then being passed on to customers. On the plus side, recent moves by the Baltic Dry Index (which measures the prices of shipping bulk materials around the world and is widely regarded as a proxy of world trade) suggest that supply chain problems have gone past their worst point. BoJo managed to hang on to being PM thanks to Operation Save Big Dog (Monday) and the subsequent announcement that Plan B restrictions would be lifted (Wednesday), which was welcomed by businesses (Thursday). It sounds like the signatures are building up to the 54 needed to prompt a vote of no-confidence in the PM. I think he’s a dead man walking, but maybe everyone is waiting to see the contents of a report into the whole shebang that is due out next week.
• In ENERGY, Together Energy became the latest UK power company to go bust (Wednesday), plans to build offshore wind power plants off Scotland caused controversy (Tuesday) and Serica Energy continues to benefit from high gas prices (Friday), although it might have to be careful not to do too well as the government might ask it to pay a windfall tax!
• In CRYPTO, things got quite interesting this week what with regulators in Spain (Tuesday) and the UK (Wednesday) cracking down on dodgy crypto ads while the FCA is also considering additional moves to limit crypto investment incentives (Thursday). Russia is actually considering an outright ban on all crypto operations (Friday) given that crypto-mining’s thirst for electricity will severely hamper the country’s bid to cut carbon emissions. On the other hand, Turkish people are turning to crypto investment in larger numbers (Friday) due to the lira going bananas because of President Erdogan’s penchant for doing crazy things to the economy. Meanwhile, Facebook is making plans for the metaverse (Wednesday) and looking into increasing activity in NFTs (Friday), as is Twitter.

• Microsoft made its biggest ever acquisition in the form of Activision Blizzard for $75bn (Wednesday), which hit the share price of Sony (Thursday) because investors feared the impact the deal could have. It’s not a done deal yet, though, because Activision has been facing allegations of sexual harassment and dodgy work practices (which could yet prove to be expensive) and regulators could see it as a way to challenge Big Tech (Friday) while investors were trying to guess what the next target might be (Friday). EA looks like a possible acquisition target, although this is obviously just speculation.
• In the UK, THG suffered a sell-off (Wednesday) as it issued a profit warning. The share price is now at less than half its flotation price as it just doesn’t seem to be doing anything right at the moment.

• Although the cost of living is rising faster than wages in the UK (Wednesday), we’re losing confidence about our finances (Friday) and companies like P&G are saying that prices will continue to rise (Thursday), pubs are recovering (Friday) and will probably get a further boost as workers are ordered back into the office. We’re already shopping in Covent Garden, to the extent that retailers there are now more able to pay rent (Tuesday) and richer consumers are pushing luxury brands like Burberry to new highs (Thursday) and buying posh cars (Tuesday). It was also interesting to see that Amazon and Visa have decided to bury the hatchet for the moment (Tuesday) regarding processing charges.
• In other retailer news, Boots is attracting bidders (Monday) while Aldi unveiled a cashierless shop (Wednesday) but ditched Deliveroo for grocery deliveries to concentrate on click-and-collect (Friday).

• In EUROPE, EV sales overtook diesel sales (Monday) but carmakers protested against new rules in France (Wednesday) that would compel them to insert phrases like “for short journeys, walk or take a bike when possible”, “consider carpooling” and “take public transport for your daily journeys” in adverts.
• In the UK, it turns out that EV sales are exceeding the number of chargers being installed (Friday), but on the positive side, Britishvolt’s Northumberland factory got another load of cash from investors (Friday). It expects to begin construction near Blyth in April, with battery production slated to start by 2024!

• Evergrande continues to die a slow death (Wednesday) and TikTok owner ByteDance disbanded its investment team (Thursday), not long after it did a structural overhaul. Ant Group got caught up in allegations of corruption (Friday) in the latest setback for the former fintech titan (well it’s still a titan – just a tamed one!).
• On a positive note, Chinese casino stocks like Sands China, MGM China and Wynn Macao all got a boost (Tuesday) as Chinese officials decided to keep the number of gaming operator licences unchanged. There had been fears that their number would be cut as part of an overall clampdown.

• Netflix saw its share price absolutely crater (Friday) due to disappointing new subscriber numbers in Q4. I guess that lockdown momentum was never going to last forever. They need Squid Game 2 to come out asap!
• Peloton also saw its share price bomb (Friday) as it has decided to temporarily pause production of its connected fitness products due to weakening demand. This is extremely concerning IMO. Given the competitive environment, inflationary pressures on consumers and the fact that more people are going to gyms at the moment the immediate future is not looking good.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. I have also added to the “Themes for 2022” section. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

My favourite “alternative” story this week was, without a shadow of a doubt Meet the Japanese grandma who manually operates vending machines in the countryside (SoraNews24, Oona McGee). What a fantastic place and wonderful woman!

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 DAY IN BRACKETS 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.

This week was dominated by news about INFLATION, NATO vs Russia and, of course, BoJo’s highly inappropriate partying. So, without further ado:

• The US Labor Department announced that inflation had increased by a whopping annual rate of 7% in December (Thursday), which was the biggest 12-month increase since June 1982! It was the seventh consecutive month for the rate of inflation being more than 5%! Fed chief Jay Powell sounds like he’s softening everyone up for an interest rate increase (Wednesday) because, in order to power labour markets higher for longer “we are going to need price stability”.
• Meanwhile, the European Central Bank continued to do nothing despite the incoming new Bundesbank chief Joachim Nagel pushing for them to do something about rampant inflation levels in Europe (Wednesday).
• With regard to the UK, chief European economist at Goldman Sachs, Jari Stein, thinks the UK’s got worse to come in inflation (Wednesday) and that the bank is going to make more interest rate increases to bring us to 1% by year end.

In terms of all the NATO vs Russia chat that kicked off this week,

• There were meetings (Monday) to try to de-escalate the heat between NATO and Russia regarding Russia’s build-up of troops along Ukraine’s border. Russia argued that NATO is going against a 1997 agreement that it would not permanently station military forces in former members of the Soviet bloc and limit the number of troops and equipment there. This all changed when Russia annexed Crimea from Ukraine in 2014 and NATO increased its presence in Poland and the Baltics. The US and Russia extended talks (Tuesday), but didn’t achieve anything and, by the end of the week, the Kremlin concluded that the talks proved to be “unsuccessful”. President Putin said he’d be open to more talks but to give it a few days before resuming.

Then it all started to kick off in the UK for Prime Minister Boris Johnson as a more serious “partygate” scandal broke (Thursday) than the one that weakened his credibility last year, all because he was actually in attendance. I don’t see how he can survive this and think that the official investigation that is going on at the moment will be used as cover to give potential replacements time to formulate plans (but that’s just my opinion and not the official line). “Fortunately” for BoJo, it looks likely that he will be out of the public eye as a member of his immediate family tested positive for Covid. Hmmm. Interesting timing.

• UK companies are feeling optimistic (Monday) according to surveys from Deloitte and Make UK although the one from BDO was more downbeat due to the effect of Omicron.
• UK companies will be facing more difficulties as food import costs look set to rise (Monday) following the introduction of new post-Brexit checks that will entail more admin. Also, SMEs are struggling with dramatically higher utility bills (Monday) which could prove to be fatal for some.
• It seems that buying in instalments is spreading. A start-up called Fly Now Pay Later just raised £55m in funding to expand in the US (Tuesday) and it helps users to split payments for holidays over 12 months with a sliding scale of interest rates from 0-40%. Over 250 companies currently use its services.
• Funnily enough, Heathrow passenger numbers hit a record low in 2021 (Wednesday). This was its lowest number of passengers since 1972!

• Volume recruiter Hays is raking in the placement fees (Friday) while rival Robert Walters highlighted wage inflation (Wednesday) and another recruiter, Morgan McKinley, said that almost three-quarters of employees said they’d quit if they could do at least some home working (Wednesday). Meanwhile, major London law firms are facing hiring difficulties (Monday) because everyone is chasing the same candidate pool, something that is also forcing Pret a Manger to raise its wages (Thursday).
• There was a bit of controversy this week as both Ikea (Monday) and Next (Friday) joined a growing band of employers who are limiting sick pay for the unvaccinated in certain circumstances. Will this catch on??

• In tech hardware, Apple got investors excited about its potential involvement in the metaverse (Thursday) despite the company not saying anything about it in particular! Philips saw its shares fall sharply on worries about a major product recall (Thursday) and profits warning and the future’s looking bright for semiconductor maker TSMC (Friday) as demand for chips generally continues to be strong and because they are also one of only two suppliers (the other being Samsung) who make advanced chips using 5nm technology.
• In software, payments platform Checkout.com managed to raise $1bn in its latest funding round (Thursday) that gave it an implied valuation of $40bn, making it the UK’s most valuable private tech company. Also, restaurant tech company Flipdish, became a unicorn (Thursday). Its software provides tech to create food ordering apps and just got a slug of money from its latest funding round that tipped its implied valuation to $1.25bn

• Figures from the China Passenger Car Association showed car sales rising for the first time in three years (Wednesday). This was powered by strong sales of EVs despite the ongoing global chip shortage and Covid outbreaks hitting production. Chinese brands including XPeng and NIO put in a strong performance but it was mixed for the foreigners as Tesla did well but VW didn’t (Wednesday).
• Beyond Meat is one of the biggest shorts in America (Friday) as investors are more inclined to doubt the hype.
• Private equity firm TPG had a great IPO (Friday). It was the latest in a line of private equity firms deciding to crystallise value in their businesses and getting currency to hire and keep future and existing talent.
• The Grand Theft Auto maker Take-Two decided to buy FarmVille maker Zynga in a $13bn punt on the future of mobile gaming (Tuesday). This should be interesting as they specialise in different platforms.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” story this week was Why are cats scared of cucumbers? (Metro, Nicole Vassell). Well I never!

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 DAY IN BRACKETS 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.

This week was dominated by news on inflation as well as the effects and spread of the Omicron variant.

• In the US, the Fed saw its steepest rise in inflation in almost 40 years (Tuesday), which prompted Fed chief Jerome Powell to hasten the scaling back of monetary policy and then the subsequent signalling of rate rises to come in 2022 (Thursday).
• In EUROPE, the ECB chickened out of raising interest rates (Friday) but the pressure got too much in the UK as the Bank of England surprised the market by raising interest rates (Friday) to curb inflation that had, yet again, hit new highs (Thursday) with all sorts of pressures coming to bear, including rising wages (Thursday) as UK employment levels continued to rise (Wednesday). The IMF had earlier urged the Bank of England to get a grip on inflation (Wednesday). Meanwhile, Turkey’s currency fell (Tuesday) on concerns that president Erdogan would continue to insist on going against all economic theory – a concern that proved to be well-founded as he did indeed cut interest rates to combat inflation (Friday) – the exact opposite of what everyone else thinks he should do – whilst simultaneously hiking the minimum wage by 50%! It seems to me like he’s buying himself time and potentially favour with poorer people. This is all pretty incredible, considering that the country’s current inflation rate is running north of 21%! Given that he just gets rid of opponents and installs yes-men into key positions I can’t see anyone standing up against him as things stand currently.
• Talking about “strong” leaders doing weird things, Brazil has kicked the IMF out of the country (Friday) because it doesn’t like the unflattering forecasts that it is making about its economy. Seems pretty petulant to me as this isn’t going to stop them!

Meanwhile, the effect of the spread of Omicron is just multiplying by the minute.

• BoJo felt a strong backlash from businesses in response to “Plan B” restrictions (Tuesday) and saw serious rebellion from his own parties on the measures (Wednesday), which only got voted through because of support from the Labour Party. The economy has taken a hit (Friday) and some measures were hastily brought in like Harrods starting its sale earlier (Friday) and the Congestion Charge was eased (Friday) to encourage people into the West End and other areas of London. Hospitality is suffering so much that there are calls for an industry-wide reintroduction of furlough (Friday). Virgin Atlantic got a much-needed cash injection (Tuesday) and among all the chaos, BA decided to announce plans to launch a new budget short-haul airline operating from Gatwick (Wednesday)!

Elsewhere, in ENERGY…

• A giant battery storage site is planned for Teeside (Tuesday), which will be real boon in the pursuit of a smoother delivery of power.
• Gas prices are continuing to rise (Tuesday) and Gazprom is loving it.
• EDF has suffered a major setback as faults were discovered at one of its nuclear power plants (Friday), which led to them shutting down four reactors. Given that Macron recently committed to more nuclear in the power mix, this is tricky timing.

…and in CRYPTOCURRENCY DEVELOPMENTS…

• The Bank of England, once again, warned against cryptocurrency (Wednesday) but the Advertising Standards Authority took matters into its own hands and warned seven crypto businesses for breaking standards (Thursday). So in reality, criticism still pretty much amounts to hot air at this stage but it seems that the powers that be are getting really really cross now and perhaps stamping their feet in frustration 🤣. Maybe they’ll actually do something at some stage…

• In UK REAL ESTATE NEWS, the number of new homes for sale hits a new low (Monday) but Rightmove reckons that the frenzy will subside in 2022 (Monday). Meanwhile, central London residential rents are rising (Monday) as people head back to city centres.
• US RETAILERS are getting a Christmas uplift (Thursday), while in EUROPE Inditex posted record results (Thursday). Frasers Group was so confident about its performance that it launched a share buyback (Tuesday), Screwfix is planning on surfing the DIY wave and expanding the number of outlets (Tuesday) and Ocado saw its share price rise (Wednesday) because its legal battle against rival AutoStore seems to be going its way at the moment. On the downside, Currys complained of supply chain problems causing shortages of popular products (Thursday) and Boohoo suffered not only from this (Friday), but also the increasing expense of processing returns as well as rising costs.

• Microsoft’s proposed acquisition of British AI company Nuance Communications is attracting closer scrutiny of the CMA (Monday) as part of the current trend of the CMA looking into foreign takeovers of key British assets (Monday). Private equity firm KKR made a big investment in PureGym (Wednesday) while another American private equity firm Fortress bought Punch Pubs (Thursday). Hard Rock bought Mirage Casino in Las Vegas (Wednesday) and Nike bought virtual trainer designer RTFKT (Wednesday). Meanwhile, Rentokil announced plans of its biggest-ever deal in buying US rival Terminix (Wednesday) and National Express announced plans to buy Stagecoach (Wednesday). On the other hand, Cineworld reeled from getting slapped with a massive fine (Thursday) because it walked away from its proposed purchase of Canadian cinema operator Cineplex.
• Funnily enough, bankers and other advisers have been raking in the fees on all these deals (Monday). I suspect this will keep the top end of the housing market stoked up for some time yet!

• In BATTERIES, Volvo Cars and Northvolt pursue a major battery venture (Tuesday) as they look to expand both within Europe and further afield. Galp and Northvolt are teaming up to build Europe’s biggest lithium processing plant (Wednesday) and the joint venture will be called Aurora and located in Portugal.
• In VEHICLES, British EV start-up Arrival is now making a special vehicle for Uber (Friday) and Harley-Davidson wants to spin off its electric bike division (Wednesday), LiveWire. Toyota committed even more money to EVs (Wednesday) and Tesla shares fell as Musk sold more (Wednesday). The company also announced it would accept Dogecoin as payment for its branded merchandise. Elsewhere, the government said it is going to cut EV subsidies (Thursday) while the EV charging network still leaves a lot to be desired (Wednesday). 

• There were a couple of interesting SPAC prospects that came up this week. Indian online education start-up Byju is in talks about a SPAC-backed IPO in the US (Friday) and British online cycling retailer Wiggle looks set to take on the world (Wednesday) with the help of its new SPAC sugar-daddy.
• Streaming (and the need to produce new content for it) is providing a major boost for the UK film industry (Monday).
• Jaguar and Porsche buy into BNPL (Monday) for repairs – so rather than having to pay a massive bill on credit card, car owners will be able to split the payments via a start-up called Bumper.
• Adobe introduced a new design software package (Tuesday) that will put it in direct competition with Australian success story Canva. I think this sounds pretty compelling and could prove to be a useful “on-ramp” for Adobe’s more established professional design software.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” story this week was the misheard Christmas songs by comedian Bec Hill. She really is superb! Wouldn’t it be great if you could present like this in business meetings 😁!

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 DAY IN BRACKETS 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 MACRO NEWS…

• US made a Nord Stream threat (Wednesday) in an attempt to stop Russia from invading Ukraine.
• BoJo announced Plan B (Thursday) in an effort to limit the spread of the Omicron variant. The CBI downgraded UK GDP growth forecasts for this year and next (Monday) although the latest ONS data suggests that the new curbs will only have a limited impact on the economy overall (Friday) – but try telling that to the leisure industry! Pubs and restaurants have already been hit by cancellations etc., jobsite Adzuna has seen a meaningful drop-off of job vacancies in the sector (Wednesday) and the whole industry is calling for more help from the government (Thursday), but it looks like they’re not going to get it (Friday). Tui, Europe’s biggest travel and tourism business, has decided to cut winter capacity as a result (Thursday), but is hanging onto hopes for a better summer.

In CRYPTO NEWS…

• Bitcoin had a wild weekend as it weakened significantly (Monday) and it seems that Bitcoin mining has not suffered since the Chinese clamp down on activities (Friday) as other countries have taken up the slack.

• Black Friday prompted shoppers to go out and buy more (Tuesday), according to a report published by KPMG and the BRC and it showed that clothing, toys and jewellery were the most popular items. Bars and restaurants also saw a lot of action. Some customers are doing very well, though as Watches of Switzerland said it had run out of Rolexes (Friday) and had to restock between August and the end of October! Meanwhile, most of the rest of us are facing rising energy bills next year (Thursday) and we can’t even console ourselves with a cheap-and-cheerful cup of coffee as coffee bean prices have skyrocketed (Thursday) for various reasons!
• It was an eventful week for some retailers as well! Tesco has decided to use the vast trove of data it has collected over the years via its Clubcard to diversify into advertising (Thursday). Meanwhile, Frasers says that it’ll swing into chunky profit for the full year (Friday) as long as there aren’t many major lockdowns.
• On the high street, it was interesting to see that posh bakery Gail’s is keen to take on Pret (Monday) and that Franco Manca owner Fulham Shore announced it had exceeded targets (Tuesday).
• It was an important week for employees this week as a group of Starbucks employees voted to get unionised (Friday), something that could spread, IMO, not only within Starbucks itself but also beyond. In the UK, Tesco workers looked like they might strike (Tuesday) but in the end, Tesco caved and offered them a pay rise and some extras (Thursday) so as not to disrupt Christmas. Still, their pay rise was nowhere near as good as the one Harrods restaurant employees managed to extract (Wednesday) from their employers, but then if your company is ultimately owned by a Qatari sovereign wealth fund there’s not really much the employers can do to say they can’t afford it given the recent state of the oil price! There was another very important development that happened this week – the European Commission decided that gig company workers will, by default, be treated as employees (Friday) rather than contractors and legislation to this effect will apply to all such companies who operate in the European Union.

• Evergrande continued to suffer this week as its stock cratered (Tuesday) while the government moved in to take increasing control (Wednesday), leading its share price to record lows (Thursday) before ratings agency Fitch officially declared it as being in default (Friday). Concerns increased about the Chinese real estate sector generally as the shares of Kaisa Group Holdings were suspended on the Hong Kong stock exchange (Thursday).
• In EUROPE, there are rising concerns about the ongoing inflation of Germany’s property bubble (Tuesday) as prices have doubled relative to incomes in Frankfurt over the last ten years, for instance. Meanwhile, the ECB continues to sit on its hands regarding raising interest rates…and in the UK, property prices keep rising (Thursday), mainly because supply of new properties just isn’t satisfying demand and so companies like posh paint company Farrow & Ball are prospering (Wednesday) as new owners insist on “putting their stamp on the property”, existing owners spruce up their abodes to maximise selling prices or decide that prices are rising too quickly and want to just say put and upgrade where they already are.

• EV sales are booming (Tuesday) and are now making up a higher proportion of new car sales (Monday), so Halfords has warned that the government needs to help train specialist mechanics (Monday) to cope with their increased uptake otherwise there will be problems! Meanwhile, Gridserve has committed to rolling out a big upgrade in the motorway charging network (Thursday).

• In FINANCIALS, Lloyds Bank announced major growth plans (Monday) after years of “meh” under the old boss. He’s going to move into more racy stuff like property, wealth and commercial and investment banking, so it should be a wild ride 🤠 yee-hah.
• In PROFESSIONAL SERVICES, the Big Four accountancy firms posted their best financial performance since the collapse of Enron in 2002 (Thursday), mainly thanks to the advisory business.
• In M&A NEWS this week, we saw that Nestlé offloaded a massive stake in L’Oréal (Thursday) to L’Oréal, although it’s still got a fair chunk left over while CMA CGM did a $3bn logistics deal (Thursday) as it bought a load of warehouses in the US and Europe along with cloud-based digital platform Shipwire from US tech group Ingram Micro.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” stories this week were about the culinary abomination in People left divided over dad’s bizarre Yorkshire pudding pies filled with KFC (The Mirror, Emma Rosemurgey) and the brilliantly talented flipchart lady. Do they inspire you??

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 DAY IN BRACKETS 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 MACRO NEWS…

• The US – Fed chief Jerome Powell said that he was more minded to accelerate the central bank’s monetary tightening programme (Wednesday) to curb inflation, prompting speculation that interest rates could go up.

…but really this week was all about Omicron and inflation…

• There was initial panic as news of Omicron hit the travel industry and markets (Monday) as many countries immediately shut down borders and imposed movement restrictions. The OECD warned about the effects of  Omicron (Thursday), but said that it could go either way in that supply chain problems could get worse as movement restrictions are re-imposed, which would cause inflation to rise further. On the other hand, tighter restrictions could harm demand for goods and services, leading to economic slowdown, leading to weaker inflation. A Bank of England policymaker said Omicron could mean higher-for-longer inflation (Wednesday). In the meantime, Moderna and Pfizer/BioNTech’s respective share prices were particularly strong (Tuesday) because it is thought that their mRNA-based vaccines are more adaptable to variants.
• Inflation in the Eurozone hit new highs (Wednesday) as the rate hit 4.9% in November, which was way higher than forecasts, putting even more pressure on the ECB, but Germany’s rate was even higher! It hit 6% – its highest rate since 1992 (Tuesday)!!! ECB board member Isabel Schnabel said in TV interview that “November will prove to be the peak” for inflation, saying that a lot of the drivers behind this figure – rising energy prices, supply chain problems – will fizzle out next year.

There were some interesting developments in OIL…

• Gazprom made a lot of money amid all the gas shortages (Tuesday). It is the world’s biggest producer of gas and announced RECORD quarterly earnings, with even better results expected for Q4! The company says it fulfilled all contractual obligations in supplying Europe but Europe is still grumbling. It’s like AstraZeneca all over again!
• OPEC+ stuck with agreed oil supply increase (Friday) rather than retaliate for last week’s mini-assault with reserves.
  Shell walked away from the Cambo project (Friday) in the North Sea as, ostensibly, it was getting impatient about waiting to get the go-ahead to drill in this oilfield.

In ENERGY developments…

• We saw the world’s first floating nuclear power plant (Thursday) – made by Russia – on northern coast of Siberia and it’s being used to power Russian efforts to carve a new shipping lane through the Atlantic called the Northern Sea Route. Reliance on the Suez Canal was highlighted earlier this year by that whole blockage nightmare and it is thought that this new route could shave serious amounts of time off some routes e.g. South Korea’s Busan to Rotterdam – 27-28 days via NSR versus 40 days via Suez Canal…
• We also saw Commonwealth Fusion Systems being backed by Tiger Global Management and Bill Gates (Thursday) to look at fusion, not fission, to generate nuclear power. Fission splits atoms, fusion brings them together. Advantages include it being cheaper (it uses widely available elements like hydrogen), waste from process stays radioactive for a shorter time and there is no risk of meltdown.
• Drax is moving to biomass (Thursday). The UK power company wants to double the production and sale of wood pellets to burn for fuel. The company reckons it could remove 12m tonnes of carbon from atmosphere each year. Critics think this is not commercially viable.
• Nissan is building a solar farm (Thursday) at its Sunderland plant to power production of its Leaf as part of company’s £13bn push into decarbonisation. It’s due to complete by May next year and will mean the plant will meet 20% of its energy needs on its own! In the meantime, Nissan reiterated its overall commitment to EVs (Tuesday).

• Clara became the first approved pension superfund (Wednesday) and it will give companies who want to exit pensions a possible way out.
• A new UK clearing bank prepared to launch (Wednesday) and is aimed at providing services to business customers.
• Wise, formerly called Transferwise, is confident about the full-year (Wednesday) but was held back by development costs. It’s now targeting rapid growth.
• Brazilian fintech company Nubank had to rein in the pricing expectations for its IPO (Wednesday) to make it more attractive to investors.
• AJ Bell announced plans to launch its own trading app (Tuesday) in order to attract younger clientele with a commission-free trading platform called Dodl.
• Abrdn bought Interactive Investor (Thursday) in order to enhance its retail investor offering.

• The CMA told Meta to sell Giphy (Wednesday). Although this isn’t what I’d call a key acquisition I think that both sides will want to win this on appeal more as a point of principle than anything else! Meta also lost its crypto chief (Thursday), although this thing was going down the toilet anyway. He’s saying that it was to pursue his own interests, but…really??
• Founder Jack Dorsey quit Twitter (Tuesday) to concentrate on being CEO of Square, which is probably best for both companies.
• The Nvidia/Arm Holdings deal looks increasingly likely to collapse (Friday) as the US regulator is now weighing in with others to side against Nvidia. I just wonder, if it does collapse, what could be next for Arm?

In the US – Cyber Monday wasn’t that impressive (Tuesday) according to the latest figures from Adobe Digital Economy, but Black Friday saw consumers return to shops (Monday) and supermarket Kroger also did brisk trade (Friday).

In the UK – real estate demand keeps rising (Monday) and prices rise (Thursday) while household bills look set to increase by £1,700 on average next year (Thursday). Fortunately, household wealth reached all-time highs (Friday)! Amid all of this it seems that we’re all still buying cars as dealership Pendragon had to raise its full-year guidance for the third time in five months (Thursday)! There was a bit of good news for retailers as footfall in the West End has been recovering (Wednesday) and Selfridges got a new owner (Thursday), which should give some feeling of stability.

• Pressure from Chinese authorities has now led to Didi saying it will delist in New York (Wednesday) after only having listed there on June 30th!

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” story this week just had to be this: Defiant baby pays no attention to mum as she insists on sharing highchair snack with dog (The Mirror, Catherine Swan). The expression on this little girl’s face is priceless!

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 DAY IN BRACKETS 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 MACRO NEWS…

• US – incumbent Jerome Powell got the nod for another four year term (Tuesday), but the pressure is going to be on because inflation continues to go wild!
• EUROPE – it all started off badly with anti-lockdown protests in Rotterdam, Brussels, Vienna about new movement restrictions. There are worries that a fourth wave could send the fragile European economic recovery into reverse (Tuesday) and the Euro fell to new lows. This was all exacerbated by the Bundesbank warning that inflation could go higher, tricky for the Eurozone because Germany accounts for 29.6% of the EU’s GDP. Talking about GERMANY, Olaf Scholz is one step closer to succeeding Angela Merkel as Chancellor as he announced a three-way coalition comprising of the Social Democrats, Greens and Liberals (Thursday) against the backdrop of ongoing subdued business confidence (Thursday) and consumer confidence (Friday). In the UK, UK factories are struggling (Thursday) and although they are scraping by with existing inventory, that won’t last forever. The majority of companies are likely to be raising prices in the next few months, which is likely to impact on inflation. In the meantime, Spain managed to pass its biggest ever budget (Friday), no mean feat considering the perilous state of the government.

…which brings me on to the subject of INFLATION. Yes, I know it’s kind of boring but it IS very important at the moment!

• New Zealand raised its interest rate for the second time in two months (Wednesday) in order to tame inflation – so it’s now 0.75%. On the other hand, Turkey’s president Erdogan remains defiant and maintains his stance of cutting interest rates to curb inflation (Wednesday), which goes against all collective conventional wisdom, which is why investors sold off the lira in horror, which could lead to citizens taking a number of dramatic courses of action (Thursday). Meanwhile, Bank of England governor Andrew Bailey threatened not to give the market any policy guidance (Wednesday) given the flak he took recently for not doing anything to curb market expectations of a rate rise. He just needs to put his big boy pants on and do his job IMO rather than just going off in a sulk 🤣.

Things got quite dramatic THIS WEEK IN OIL because…

…the US, China, India, Japan, South Korea and the UK got together this week to release 70m barrels of oil onto the market to try to push oil prices down (Wednesday). However, this is tiny in the scheme of things. Americans consume 50m barrels in 2.5 days, OPEC+ countries produce 40m barrels of oil per day – so this does seem like a token effort! The IEA appealed for Russia in particular to pump out more oil (Thursday), but it seems that Russia and Saudi Arabia were annoyed by other countries ganging up, so they might punish this uprising by not opening up the taps as they were due to do next month. This sounds terrible to say, but markets plunged and oil prices fell on news of a new Covid variant on Friday, so oil prices may get/stay weaker anyway…

• KKR made a massive €33bn buyout offer for Telecom Italia (Monday), which could prove to be one of the biggest ever private equity buyouts of a European company.
• The private equity bods are at it again as Hellman & Friedman and Bain Capital clubbed together to buy health-tech company Athenahealth for $17bn (Tuesday). Private equity funds have a lot of money sloshing around right now so I think there is going to be plenty more of this kind of activity going on!
• Ericsson bought Vonage (Tuesday) to broaden its service offering.
• Netflix bought Scanline (Tuesday) in a deal that will enhance its content going forward given Scanline’s experience with visual effects on productions including Game of Thrones, Zack Snyder’s Justice League and Stranger Things.
• Commodities trading house Vitol agreed to buy petrol stations operator Vivo for $2.3bn (Friday).

• HP is benefiting from workers returning to the office (Wednesday), as is Pret (Wednesday) although Compass is trying to evolve by developing “dark kitchens” (Wednesday) to service companies who can’t justify a full canteen service.
• Companies are trying to evolve with customer behaviour that changed under lockdown. Twitter is teaming up with Walmart to experiment with online selling (Tuesday) and Macy’s is selling NFTs (Tuesday)!
• It’s also interesting to see that advertising agency M&C Saatchi is bouncing back strongly (Wednesday) from a disastrous time under lockdown. All the advertisers seem to be saying the same thing, so it’s clearly not a one-off.

• US consumers are very downbeat on their own finances, but jobless claims are at their lowest since 1969 (Thursday) and crowds are expected to return in force at malls and stores over Thanksgiving weekend (Friday). UK consumers are facing increasingly unaffordable house prices (Thursday) and the prospect of more expensive coffee (Monday) but they continue to spend (Tuesday). British shoppers are buying early this year (Friday), according to the latest figures from the CBI. This stands in stark contrast to how German consumers are feeling right now (Friday).
• US retailers are having mixed fortunes as Best Buy and Dick’s Sporting Goods report slowing online sales (Wednesday), Gap faces supply chain issues (Wednesday) and Dollar Tree has to raise prices (Wednesday) because of higher costs and inflation generally. In the UK, M&S continues to revamp its clothing offering by buying into Nobody’s Child (Wednesday) and supermarket Lidl is pretty confident going into Christmas (Thursday) although online-only electrical goods retailer AO World announced another profit warning (Wednesday) citing supply chain problems, higher costs etc.
• In LEISURE, Nando’s drew a line under a disastrous year (Thursday) and reckons that it’ll return to pre-Covid profitability levels in February 2022. The choice of fast-food joints in the UK is about to get broader as Wendy’s announced a European expansion (Thursday).

• British luxury accessories brand Mulberry announced plans to expand production in the UK (Thursday), a trend I expect to see more of as Brexit and supply chain problems mean that it makes increasing sense to keep production closer to home.
• In REAL ESTATE, prospects for the office market are mixed as prime property is seeing strong demand (Monday) but landlords are facing increased costs (in terms of upgrading properties to meet tightening climate regulations) and competition for tenants given the amount of space flooding the market currently. It was really interesting to see Britain’s first 40-year mortgage this week (Monday), something that sounds sensible given longer life expectancy and higher housing prices. I also wonder whether this will mean that it will be easier for older people to get mortgages. It may well encourage other providers to offer alternatives products.
• London attracted its first SPAC this week (Wednesday), so the clock will start on it finding a suitable asset to get excited about.
• Energy provider Bulb went into administration this week (Tuesday), but it’s so big that rivals can’t take it on, hence it is being kept alive by the taxpayer until something can be done about it. Its demise was followed by Entice Energy and Orbit Energy (Friday) later in the week.
• The travel industry is bracing itself for more turbulence (Friday) as concerns about another Covid wave threaten bookings for flights and holidays.
• Autonomous taxis got approval to operate fare-charging services in Beijing (Friday) and it will be the first capital city in the world to do so.
• Tencent was dealt another blow this week (Friday) as a number of Chinese state-run companies were told to stop using (or limit their usage of) Weixin/WeChat messaging app, citing security concerns. The Great Clampdown of China continues…

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” story this week was Optical illusion has internet baffled – even after woman explains the trick (The Mirror, Paige Holland) as it is just so darn clever!

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 DAY IN BRACKETS 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 MACRO NEWS…

The presidents of both the US and China held talks about nuclear arsenals (Wednesday) after tensions have been mounting over the last few months in particular.

Brazil’s inflation is going crazy right now (Wednesday) as it edged above the 10% mark for the first time in over five years. There are concerns that President Bolsonaro is going to fritter away money to spend on an aid package on the poorer in society in order to buy their votes in next year’s election. Mind you, if you think Bolsonaro is bonkers, Turkey’s President Erdogan is faring even worse on the inflation front (Friday) with an eye-watering rate of 20% and he is cutting rates and not increasing them because he is one of the only leaders in the world that believes cutting interest rates helps to curb inflation!

Japan’s GDP has contracted way more than had been expected (Tuesday) and industrial production is down for the third straight month. The country is to launch a stimulus (Thursday) that will give families with kids ¥100,000 ($872) as part of a $350bn stimulus package, but it’s not widely seen as something that will be of huge benefit.

In the UK, Andrew Bailey has been yapping on about inflation concerns (Tuesday), but after last month’s fiasco of letting everyone believe that an interest rate rise was coming and then it not happening, if the Bank doesn’t raise interest rates at the next meeting his credibility will go down the toilet. As if to prove the point, UK inflation hit 4.2% in October (Thursday) – up from 3.1% in September and above market expectations – and the Institute of Fiscal Studies said that workers would have to get a 7% pay rise from now in order to merely maintain their current spending power.

In ENERGY,

Shell shifted its tax domicile to the UK (Tuesday), like Unilever and Relx before it while Brexiteers revelled in the news and the Dutch were frustrated by it. Peak power prices hit a new high (Tuesday) as low wind speeds hit renewable power generation and gas prices shot up because Germany decided to delay Nord Stream certification (Wednesday). Rising power prices have also helped National Grid’s revenues boom (Friday). Meanwhile, Qatar invested in Rolls-Royce’s Small Modular Reactor nuclear power generation venture (Wednesday) as interest in nuclear continues to gather pace.

• Chip shortages are forcing manufacturers to improvise, adapt, overcome (Monday) so they are supplying older chip-less models or modifying the design of existing ones and Tesla is supplying unfinished cars (Tuesday) because of the shortage, promising to retrofit them when the parts become available while GM and Ford have decided to get more directly involved in chip manufacture (Friday). High-end bicycle manufacturers are warning of longer disruption (Monday) due to parts shortages, Greggs is running low on vegan sausage rolls and bean and cheese melts (Thursday), Oatly is having production and distribution issues (Tuesday) and America’s Tyson Foods is increasing meat prices (Tuesday) due to rising costs and the expectation that this will continue for a while yet.

• UK employment is going up (Wednesday) and consumer confidence is rising again (Friday), according to GfK’s consumer confidence index. Consumers are spending money on stocking their wine cellars (Monday), buying board games (Monday) and going to watch the Bond movie at Cineworld (Tuesday). On the other hand, Alibaba has observed a weakening in Chinese consumer spending (Friday).
• In retail, Walmart and Home Depot continue to win (Wednesday) and Target and TJX are upbeat about Christmas (Thursday) while in the UK, House of Fraser got served notice from the landlord to move out of its flagship store in January (Thursday) while M&S has decided to rent out dresses (Wednesday).
• In leisure, US REIT Sun Communities bought Park Holidays for almost £1bn (Monday), international restaurants are looking to buy London premises (Monday) and while Wagamama’s parent upgrades earnings on a strong performance (Wednesday), Revolution Bars is hit by higher costs for employing bouncers (Wednesday).

• In commercial property, WeWork has benefited from the return of office workers (Tuesday), while Landsec (Wednesday) and British Land (Thursday) are staging a recovery.
• In residential property, house price growth is weakening (Monday) while rents are rising (Tuesday) and mortgage lenders are fighting for customers (Wednesday).

• In aviation, budget airline Wizz Air decided to put in a hefty order of new planes with Airbus (Monday) as Airbus is facing huge demand (Monday) and it won its first new freight plane order (Tuesday).
• In some surprising developments this week, Rivian became bigger than Europe’s biggest carmaker VW (Wednesday), Peloton announced plans to raise $1bn in cash in a stock offering (Wednesday) and Redefine Meat announced an amazing new development in alt-meat (Wednesday).
• In demergers/mergers/acquisitions news, Johnson & Johnson became the latest conglomerate to announce a split (Monday) after the likes of Toshiba and General Electric. On the subject of GE, it is seeing intense interest from PE firms (Tuesday) as they all salivate over what they could do with its businesses and in acquisition news, Nvidia’s proposed purchase of Britain’s Arm Holdings is going to get a thorough investigation (Wednesday). Separately, Nvidia announced record quarterly results (Thursday). There was disappointing news as Carlyle decided to walk away from its bid for Metro Bank (Friday) and Unilever decided to sell its tea business (Friday) to slim down its offering.
• Elsewhere, India’s biggest IPO failed (Friday) as fintech company Paytm saw its share price fall by 27% on its market debut.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” story this week was Three minutes of golden retriever madness that will make your day (The Mirror, Bethan Shufflebotham), which I think will make anyone’s day!

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 DAY IN BRACKETS 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 MACRO NEWS…

US inflation has now reached its highest level since 1990! (Thursday) and President Biden is telling his top economic advisers at the National Economic Council and competition regulator, the FTC, to do something about it! Interestingly, current Fed chief Jerome Powell is up for election at the end of his four-year term and there is only one candidate, Lael Brainard, going up against him. It’s thought to be unlikely that he’ll be pushed out, but if he was a new face might not find it so difficult to raise interest rates IMO…

In China – factory gate inflation (= prices charged my manufacturers to wholesalers) rose at the fastest rate for 26 years (Thursday) due to major power shortages and skyrocketing commodity prices at a time where it looks like President Xi Jinping is going to get the go-ahead to stay in power until 2028 (Friday) thanks to a special “historical resolution” bestowed on previous leaders Mao Zedong and Deng Xiaoping.

In Europe, the German Council of Economic Experts, which advises the government, says that Germany could become the eurozone’s economic laggard (Thursday) as higher rates of Covid will stunt consumer activity and exacerbate existing supply chain problems. Neighbouring Poland faces increasing pressure from the east and the west (Thursday) as the country faces difficulties with the EU over judicial matters on the one hand and chaos on its border with Belarus on the other.

In COMMODITIES,

There was a record surge in gas prices (Tuesday) as Russia didn’t pump gas to Europe at beginning of the week, but then it did (Thursday), causing relief all round.

Rising gas prices and the failure of renewables to deliver consistently enough has boosted talk of nuclear power generation. Mini nuclear power reactors got funding (Tuesday) from France’s BNF and America’s Exelon Generation for Rolls-Royce led SMR venture. Meanwhile, France’s EDF is getting ready to build more nuclear reactors (Thursday) as France aims to rely more on nuclear power in the future.

In CRYPTO NEWS,

Bicoin hit record levels (Wednesday), Apple said it is “looking at” crypto (Wednesday) but didn’t really go into any specifics and Twitter is actually hiring a crypto team (Thursday) that is being tasked with setting “the strategy for the future of crypto at (and on) Twitter”.

• It was interesting to see that automakers did not back a COP26 pledge to end sales of emissions-producing cars (Wednesday) in “leading markets” by 2035 and globally by 2040, although VW did announce it was building a new EV gigafactory (Wednesday). Semiconductor maker Infineon doubled its profits in the latest quarter (Thursday) due to continued strong demand from the automotive industry but it was interesting to hear from one of the world’s biggest supplier of car parts, Continental, that it thought the chip shortage had “likely reached its peak”.
• In electric vehicle news, the US charging network got a major boost from President Biden’s new infrastructure bill (Monday). Rivian Automotive was the hot topic this week as the company went for the top end of its price range (Wednesday) and then boomed on its market debut (Thursday) but it’s still got a tough task ahead of it (Monday) both in terms of production and increased competition. While all this was going on, Elon Musk asked his Twitter followers whether he should sell some of his shares to pay a tax bill (Monday) and then duly sold some (Thursday).
• In EV battery news, Savills came up with the earth-shattering statement of the bleedin’ obvious that UK gigafactories are going to require more space (Monday) – the clue’s in the name 🤣 – and EV battery prices are going to rise (Monday) after years of falling. However, British company Johnson Matthey has decided to withdraw from making battery materials for EVs (Friday), which is disappointing because there were high hopes.

• UK consumer confidence continues to wane (Tuesday) although high street spending is actually going up (Tuesday) as we are returning to offices in our suits (Friday), buying James Bond watches (Wednesday) and buying second hand cars to such a great extent (Friday) that insurance premiums are rising (Thursday)! While Primark outlined its US expansion plans (Wednesday) and Asos stated a similar plan to expand overseas (Thursday) we saw that in the domestic UK market that Tesco has rebounded (Wednesday), M&S is staging a comeback (Thursday), WH Smith expected to be profitable again next year (Friday) and Halfords has benefited from more drivers on the road (Thursday) over the course of the pandemic.

• In food delivery news, American fast food delivery specialist GoPuff is focusing efforts on the UK (Wednesday) to potentially become a consolidator in a fragmented market and DoorDash announced intentions to buy European food delivery company Wolt Enterprises (Wednesday) for $8bn as part of its strategy to broaden its horizons beyond its domestic market.
• In M&A news, America’s Viasat made a $7.3bn offer to buy UK satellite firm Inmarsat (Tuesday) in the latest example of a US firm buying a strategic British asset and McAfee is now being bought out by a consortium of private equity firms (Tuesday) only a year after it returned to the stock market in October 2020.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” stories of the week were the one about the skateboarding bulldogs in Meet Chowder and Maddie – skateboarding bulldogs who can’t get enough of their wheels (The Mirror, Edward Kay) and the rather more educational video from the BBC about the actual impact of planting trees, which I found quite surprising!

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 DAY IN BRACKETS 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 MACRO NEWS…

There was a lot of comment on CLIMATE as the COP26 conference kicked off in Glasgow…

• India PM Narendra Modi’s commitment to an emissions target (Tuesday) to cut emissions to net zero by 2070 was applauded but, let’s face it, it’s laughable given that it is so far away! India is the world’s third worst polluter but did add that it aims to get half of its energy from renewables by the end of this decade. Notably, US and China made ZERO promises!
• The UK government faces a North Sea dilemma (Wednesday) as the government’s Oil and Gas Authority is going to have to rule on whether Shell and Siccar Point Energy will be allowed to start drilling in the Cambo oilfield 80 miles north-west of the Shetland Islands. The decision is expected to be made by the end of the year. If it allows the drilling, it will look like BoJo made empty promises on the environment, but if it doesn’t, the UK’s energy situation could potentially get worse…
• Banks came under scrutiny about their green promises (Wednesday) given that they talk about being kind to the environment on the one hand and then lend to the fossil fuel industry on the other. Scrutiny over lending has increased ahead of COP26 leaving the likes of Barclays, Deutsche and BNY Mellon open to criticism for having such double standards.
• Industry is calling for commitment to energy storage (Thursday) as some of the world’s biggest energy and engineering companies got together to form the Long Duration Energy Storage Council this week. They were calling for up to $3tn of investment into long duration energy storage, which will clearly be able to go some way towards smoothing out the volatility of renewable energy supply.
• Indonesia threw a spanner in the works by having second thoughts about the agreement it signed up to (Friday), which had been signed this week by over 100 world leaders to stop cutting down forests by 2030. Also, the IEA warned that the goals of the Paris accord on global warming were potentially unattainable (Friday) as the US and China both countries swerved the UK’s flagship coal pact
• Meanwhile, Coal miners are doing very well at the moment (Thursday) as rising coal prices have resulted in miners like Thungela Resources (a Johannesburg-based miner which demerged from FTSE100 company Anglo American in June) seeing their share prices skyrocket. Glencore, Peabody Energy, Whitehaven Coal and Exxaro Resources are among the thermal coal miners to have benefited from strong demand for their product, especially from Asia.

There was also a lot of speculation on interest rates given ongoing inflation around the world…

• The US and Europe dismissed interest rate speculation (Thursday) and the UK looked like it was on the cusp of increasing interest rates (Thursday), but it didn’t pull the trigger in the end (Friday). Mind you, ONS stats say furlough has only resulted in 6% of staff leaving their jobs and the latest figures from the Recruitment and Employment Confederation and KPMG show that starting pay is seeing its steepest increase since the survey began in 1997! This will continue to keep the pressure on the Bank of England to raise rates…

In Asia…

• China manufacturing slowed down (Monday) for the second consecutive month. The National Bureau of Statistics’ Purchasing Managers Index figures just reflect the cumulative effect of the property sector clampdown and energy shortages against a backdrop of rising commodity prices
• What’s currently going on at HNA presents a potential template for an Evergrande restructure (Tuesday). HNA used to be China’s most aggressive offshore dealmaker but investigations into its heavily-leveraged acquisitions and opaque ownership structure struck alarm bells with the state, which is now going to implement a streamlining of its structure and take more control. Something similar could be used to “rehabilitate” Evergrande.
• We also saw Japan’s LDP wins the election (Monday), which isn’t exactly a surprise as the party has been in power pretty much continuously since WWII.

There were also some interesting developments in oil and crypto…

• Saudi Aramco’s valuation climbed above $2tn (Monday), thanks to ongoing strong demand for oil.
• …and in crypto, Bitcoin’s rise has prompted increased hiring activity in crypto-related jobs (Tuesday) as companies seem to be desperate to recruit staff with the requisite crypto know-how!

• Maersk warned that supply chain problems will persist (Wednesday) whilst also announcing its best ever quarterly results (!). Ongoing labour shortages and skyrocketing freight rates don’t look like ending any time soon. In the meantime, US warehouses are running out of space (Monday), exacerbating the whole thing!
• Qualcomm is benefitting from chip shortages (Thursday) and posted record quarterly sales.
• Apple is having delays and having to prioritise iPhones over iPads (Wednesday) due to chip shortages.
• Ikea and Next are warning that supply chain restrictions mean they can’t take full advantage of underlying demand (Thursday) and Next announced a downbeat outlook for the final quarter.
• Meanwhile, some secondhand cars in the UK are selling for more than new (Monday), so for example a Dacia Sandero with 10,000 miles on the clock will set you back £11,700 on average despite the fact that it costs about £1,901 more than it would cost you to buy it new! How amazing is this??

• TikTok’s owner, ByteDance, restructured into six divisions (Wednesday) making the business lines clearer.
• It turns out that Snap/Facebook/Twitter lost $10bn in ad revenues thanks to iPhone’s new privacy rules (Monday). Facebook has been particularly badly affected by the changes, but Alphabet and Twitter have not suffered quite as much while Apple, funnily enough, recently posted a “record” quarter for its advertising business!
• Facebook announced that it was ditching facial recognition (Wednesday) but Facebook and Instagram had yet another outage (Thursday) – the third in a month 😱.

• First class air travel is making a return (Monday), according to the latest IATA data, although it’s recovering more slowly than economy class travel.
• Lufthansa returned to profit (Thursday) for the first time since pandemic lows.
• Budget airlines are facing headwinds (Friday) after posting profitable quarters, with Wizz Air lowering fares to tempt passengers in what is usually a quiet quarter and Ryanair cutting its earnings forecasts.

• Franklin Templeton made a bolt-on acquisition (Tuesday) of private equity firm Lexington Partners to broaden its offering.
• Barclays is having leadership turmoil (Tuesday) after the abrupt departure of Jes Staley, following allegations of links with Epstein.
• Brazilian lender Nubank is aiming for a $50bn valuation (Tuesday) in its upcoming IPO, which would make it one of Latin America’s biggest companies!
• SocGen’s investment bank comes up trumps (Friday) as it profited from a major uptick in deals in Q3.
• Metro Bank got a takeover approach (Friday) from US private equity firm Carlyle, which got everyone very excited.
• Klarna bought Pricerunner (Wednesday), enhancing its functionality with the price comparison site.

• Allbirds had a strong debut (Thursday), with its share price booming by 95% on its first day on the NASDAQ!
• Polish locker specialist InPost is to take on Amazon in the UK (Monday) via a major expansion of its parcel locker service.
• Coke bought the 70% of Body Armor it didn’t already own (Monday), in its ongoing battle with fierce rival in the space, Gatorade.
• BlackRock offloaded a hefty chunk if its THG holdings (Wednesday), which isn’t great for sentiment in THG.
• It looks like the UK poultry industry will only use half of the emergency visas allocated to it (Thursday) because farmers have nurtured fewer birds and employed more locals.
• BTS NFTs are going to be a thing (Friday) as Hybe, BTS’s music label, has agreed a deal to use South Korea’s biggest crypto exchange Upbit, to sell NFTs related to the band, giving them another revenue stream.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” stories of the week were the scary mushroom in Woman finds terrifying ‘zombie-like’ mushroom with ‘eyes and mouth’ on woodland walk (The Mirror, Alahna Kindred) – but its scariness paled in comparison to this: Our nine male Japanese reporters turn into lovely young ladies with magic of A.I. photo editing (SoraNews24) 😱😱😱.

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 DAY IN BRACKETS 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 MACRO NEWS…

• So Rishi Sunak unveiled the least Conservative-like Budget a Conservative government has come up with in living memory (Thursday), as it was a high tax, high-touch state plan not normally associated with the “Big Society”, low tax hallmarks of a Conservative government under more “normal” circumstances.
• Inflation continues to be a hot topic of conversation as speculation increased about a sooner-than-expected interest rate rise to clip the wings of inflation. Markets are already pricing in a hike next week (Friday) but it was interesting to see that there are also winners from higher interest rates for a change (Thursday) because most commentary tends to concentrate on who will lose out! Many members of the MPC (including the governor of the Bank of England) seem to be leaning towards an earlier interest rate rise but there is at least one member who wants to take a wait-and-see approach (Tuesday).
• Although it’s not strictly “macroeconomic”, I thought I’d include some commentary about what’s going on in advertising as is often seen as being a lead economic indicator (it reflects the direction of the wider economy). Research from the Advertising Association shows that advertisers are willing to splash the cash going into the end of the year (Thursday) and this bullishness seemed to be reflected later on in the week as WPP lifted its sales forecasts for 3^rd time (Friday). Spotify benefited from ad revenues over the quarter as well (Thursday).

• Major US banks believe that Americans are likely to hit the credit cards again (Tuesday). Meanwhile, in the UK, consumers are spending more on BNPL (Wednesday) according to Credit Karma – and this will probably be enhanced by the new Klarna/Stripe tie-up (Wednesday), which will enable more retailers in the US, UK and Europe to add Klarna as a payment option more easily.
• UK consumers are facing stronger headwinds at the moment and their confidence continues to weaken (Monday) as they get increasingly concerned about inflation (Wednesday). House sales and prices are continuing to rise (Tuesday), which usually implies consumer confidence, but I think this may be supply-led than demand-led. Mortgage rates are now on the rise (Friday) as banks expect interest rates to increase and many Londoners are also facing additional costs as the ULEZ was expanded considerably this week (Monday). On the plus side, the majority of employers are aiming to hire over the next 12 months (Monday).
• In terms of UK consumer trends, we are spending at restaurants (Monday) giving chains like Giggling Squid and Las Iguanas more confidence to expand (despite ongoing difficulties of hiring staff), picking up our online shopping in-store (Monday) and going mad for frozen food (Monday). Meanwhile, Ikea bought Topshop’s former flagship store (Wednesday) for an eye-watering sum. It’s all part of the company’s strategy to have more presence in city centres, but I think it just makes them like any other furniture store…

• Facebook is facing various issues in the wake of the Facebook Papers revelations (Tuesday) but it outlined a new future and brand (Friday) emphasising the shiny new things to come rather than the rather murkier practices that have brought them to this current stage. The company is now under investigation by the FTC (Thursday).
• Google and Microsoft posted solid results (Wednesday) thanks to advertising and cloud services respectively, but Apple and Amazon were more downbeat (Friday) on supply chain problems and increased costs.
• In tech hardware, Samsung announced strong figures (Thursday) thanks largely to semiconductor demand.

• BP/Daimler announced new hydrogen plans (Thursday) as part of the journey to be carbon neutral. Lorries are more difficult to power on electricity alone, so it’s good to see alternative avenues being explored.
• The UK’s only Gigafactory, owned by Chinese company Envision, is planning a massive expansion (Tuesday) that will make the facility one of the biggest in Europe.
• Tesla became a $1tn company (Tuesday) powered by various reasons (Wednesday), including the fact that it sold 100,000 cars to Hertz , who then announced that it was supplying half of the new order to Uber (Thursday).
• In “traditional” carmakers, Volvo had to reel in its expectations for its IPO (Tuesday), GM and Ford moaned about chip shortages lasting into next year (Thursday) and UK car production hit new lows (Thursday).

• In IPO and M&A news, online petcare retailer Zooplus had a joint bid from two private equity firms (Tuesday) but two big potential M&A deals fell by the wayside as PayPal abandoned its bid for Pinterest (Tuesday) and DraftKings pulled out of the proposed Entain takeover (Wednesday).
• In banks news, Deutsche Bank benefited from advisory fees on deals (Thursday), Santander benefited from mortgages (Thursday) and Lloyds Bank’s profits doubled (Friday), also because of its exposure to the red-hot housing market. Further afield, Brazilian “challenger bank” Nubank filed for an IPO in the US (Thursday) as it continues to benefit from having less baggage than the incumbents.
• Then Evergrande started work again in Southern China (Monday) to give the impression of some sort of normality but it looks like the state is leaving it to its own devices (Wednesday).

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” item this week was, of course, the drumming granny! What an inspiration to us all!

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 DAY IN BRACKETS 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 MACRO NEWS…

• China’s GDP growth is slowing down (Monday), according to official figures from the National Bureau of Statistics. It still grew by 4.9% in Q3 though, but the slowdown was due to a cooldown in the property market and ongoing energy shortages. China’s energy crisis looks like it’ll continue for a while yet (Monday) as Xi Jinping is sticking to his aim to wean his country off its current reliance on coal. There was also some interesting news about China continuing to block beef imports from Brazil (Monday), which is a nightmare for Brazil because the country is the world’s biggest exporter of beef. China stopped imports initially because of a few cases of mad cow disease, but although Brazil later gave the all clear, the Chinese kept the ban in place. This might work in China’s favour because they’ve got an oversupply of pigs and I believe that Chinese people generally prefer pork to beef anyway. This is clearly bad for Brazil though – but maybe that will mean beef prices elsewhere will go down. Meanwhile, Brazil saw 4 economic ministers resign (Friday) because Bolsonaro looks like he’ll breach spending caps to boost welfare payments to poor families, which critics say is doing to buy votes given next year’s election!
• In the UK, the Bank of England dropped more hints about an earlier-than-expected rate rise (Monday) and speculation of a rate rise in the November meeting continued to gain traction (Tuesday). The new chief economist, Huw Pill, said inflation could hit 5% early next year (Friday), reinforcing that perception. Mind you, the inflation rate cooled off slightly from last month (Thursday) but given that wages are rising, and consumers are looking at higher paint prices and utility bills (Thursday), the pressure is still on! Sunak is also considering an online sales tax (Tuesday), which sounds good in theory but could slow down the digitisation of the economy, target startups and will be another burden on companies who are just emerging from the pandemic. Some believe that it would be better to increase VAT or income tax because the burden will be spread more widely.

In ENERGY NEWS…

• Russia kept gas prices up (Tuesday) but offered to boost gas supplies to Europe as soon as the new Nord Stream 2 pipeline is approved by Germany. In the UK, Goto Energy went bust (Tuesday) and the government announced an offer of £5k incentives for households to get heat pumps (Tuesday) but subsequent reports pointed out that there aren’t many people qualified to install them and it’s also not a given that they will be appropriate for all properties. Renewables (or lack of them) have been partly to blame for the current shortage of power and so SMRs continue to be pushed as the future of nuclear power (Thursday).

In CRYPTOCURRENCY NEWS…

• A bitcoin ETF, called the ProShares Bitcoin Strategy ETF, started trading (Wednesday). The market saw this as another move towards the mainstream, which led to Bitcoin breaking through $65k (Thursday) and Facebook launched a digital currency wallet (Wednesday). There was also an interesting article on Worldcoin (Friday) being given out for free in exchange for personal details via the use of iris-scanning orbs.