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.

• IN THE US – Fed chief Jerome Powell said that there wouldn’t be any interest rate increases until 2022 (Thursday), adding that “We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates”
• IN EUROPE – Everyone is still debating who is going to get access to the coronavirus recovery fund (Monday) but some countries (the ones that won’t do so well out of it!) are arguing that a number of “outdated” economic measures to calculate who gets what
• IN OIL – Saudi Aramco says that it’s raising prices in every region (Tuesday) noting particularly strong demand from Asia, especially China. Some US shale producers are returning to the market (Monday), but then again BP announced it is to cut 14% of its global workforce (Tuesday) – and other oil majors are expected to follow suit

• ON THE CONSUMER SIDE OF THINGS, Americans have been spending a lot on beauty products in lockdown (Tuesday) and the latest data showed that the number of US new jobless claims is continuing to fall (Friday). In the UK, retail sales are improving (Tuesday) but consumers are still anxious about shopping (Wednesday) despite the government announcing that non-essential shops will be opening on Monday (Wednesday)
• IN THE US – Simon Property Group is trying to pull out of the $3.6bn acquisition of smaller rival Taubman Centres (Thursday) that it agreed before coronavirus hit. It says that it has a clause in the contract that covers this, Taubman (obviously) thinks differently. Expect lots of this sort of thing to happen as deals negotiated before coronavirus hit unravel as acquirors try to avoid massive outflows of cash and  acquirees try to make them stick to the agreement! Lawyers are going to have a field day in fees!
• IN THE UK – business secretary Alok Sharma announced the reopening of non-essential shops on Monday 15th (Wednesday), which I would have thought will be a mixed blessing for retailers because they’ll be allowed to trade (good), but footfall is likely to be lower (bad) and they won’t have an excuse not to pay rent any more (bad). On that front, retail landlords only expect to be paid 15% of the rent due on the June payment (Monday). The number of tenants will continue to dwindle as The Restaurant Group announced restaurant closures (Thursday), the Monsoon Accessorize founder bought virtually the whole company out of administration (Thursday) – but not the shops – putting at least 500 jobs in jeopardy (he’s negotiating rent with landlords currently and will decide closures based on that) and Mulberry cut 25% of its workforce (Tuesday)
• IN EUROPE – Inditex, the owner of Zara (among other brands) said it would close up to 1,200 shops over the next two years (Thursday) as it published its first ever quarterly loss. It is aiming to increase the percentage of online sales from 14% to 25%.

• Anything to do with air travel these days is having a nightmare. Airbus is trying to get some kind of aeroplane scrappage scheme off the ground (Monday) and France has decided to pour €15bn into rescuing the industry (Wednesday), particularly Airbus and Air France. Elsewhere, Cathay Pacific got a bailout from the Hong Kong government (Tuesday) and it looks like US airlines aren’t likely to return to profitability until 2022 at the earliest (Wednesday). Heathrow launched a redundancy programme (Friday) and Lufthansa announced 22,000 jobs cuts (Friday)
• The automotive industry has also been having a tough time. However, there were some interesting developments this week like electric truck start-up Nikola Corp overtaking Ford’s valuation (Wednesday) despite never having sold a vehicle (!) and investors going mad for Tesla when it announced it was ready to mass-produce an all-electric semitrailer truck (Thursday). Online car retailer Vroom had a successful IPO (Wednesday), probably benefiting from the hype created by last week’s IPOs of Warner Music and ZoomInfo

• Airbnb said that bookings were looking strong (Monday). I have been saying that I think Airbnb is going to be a “winner” from the coronavirus if it can get through this difficult period (which it has been doing thanks to cash injections from outside investors) because it is an attractive option for those wanting a holiday closer to – but not at – home. It offers less hassle than a hotel and more flexibility on location IMO
• Ocado raised £1bn to help it expand its internet sales capability and robot factories (Thursday)
• Just Eat Takeaway announced the acquisition of Grubhub (Thursday), which makes strategic sense given a business like this needs scale – and their business models are quite similar (although their geographies don’t overlap)
• Beyond Meat announced expansion of its European production capabilities (Friday), which should be a boon to its product distribution capability
• Snap announced a project called “Snap minis” (Friday) where developers provide them with cut-down versions of apps. This sounds like a good idea as it will give the platform more content and potentially broaden its appeal

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” story this week the tea abomination in Traumatised Brits say American woman’s cup of tea attempt should be ‘illegal’ (The Mirror, Paige Holland https://tinyurl.com/y9oag2t6) and some guidance on how to make amends in Doc Brown’s excellent My Proper Tea rap. This guy is a genius! Just to warn you, he does say some slightly naughty words…

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 THE US – Trump got aggressive regarding the George Floyd protests (Wednesday), threatening to send in the army to quell the protests, but his Defence Secretary Mark Esper publicly disagreed with him (Thursday) so I assume he will be for the chop in the near future…
• IN EUROPE – the ECB announced it would be putting €600bn more into the existing bond-buying programme (Friday) and an extension of the scheme until at least June 2021. Germany announced a €130bn economic stimulus (Thursday) which comprised of measures including the lowering of VAT, giving parents one-off payments of €300 per child and incentives to buy electric vehicles. German car makers weren’t chuffed (Friday) because the incentives didn’t cover petrol and diesel cars, which still make up the majority of vehicles
• IN THE UK – there was talk about chancellor Rishi Sunak unveiling an economic stimulus package in July (Monday), but the latest news says that he may announce a modest version then and delay the “big” package of tax cuts and spending commitments until the autumn. He says it’s because he wants to wait until the dust settles before making irreversible spending decisions
• IN AUSTRALIA – it looks like the country is set to fall into recession for the first time in 29 years (Thursday) as GDP for the first quarter contracted. Given that the coronavirus outbreak happened in the second quarter Australia is highly likely to fall into recession because the definition of a recession is two consecutive quarters of GDP contraction

• IN THE US – Retailers who had just been preparing to open after lockdown suffered in some protests (Monday) Target, Walmart and Nike – as well as many much smaller operators – have had to close their doors or are recovering from the looting. Adidas has closed all of its US stores and Amazon has altered delivery routes to protect employees. For the retailers who do open, it’s going to be extremely competitive as solvent retailers and troubled/insolvent retailers will be trying to attract customers with huge discounts (Tuesday)
• IN THE UK – Primark announced it would be opening all of its shops (Tuesday), which is important given that it doesn’t trade online! However, there’s still trouble on the high street as Monsoon Accessorize is on the verge of going into administration (Tuesday) while Pret a Manger is trying rent negotiations with landlords (Monday) and Frankie & Benny’s owner announced the permanent closure of 120 restaurants (Thursday)

• Interestingly, car sales in China were up (Thursday) and the UK’s fifth-biggest car dealer said it had seen strong demand for secondhand cars (Thursday). Some of this uptick has been down to more people not wanting to use public transport, but the UK car dealer said that exceptional bargains could be had in the new car market when production comes back in a meaningful way in order to tempt buyers back into the showrooms
• Unfortunately, jobs continue to be lost in the car industry as Aston Martin said it was cutting 20% of its staff (Friday) while car dealer Lookers said it was shedding 1,500 jobs and closing 12 of its sites

• The FCA is going to embark on a test case at the High Court (Tuesday) to see whether insurers should be paying out for “business interruption” during the coronavirus outbreak. It is thought that this will speed up the process for current and potential claimants and a ruling is expected by July. A lot hangs on this! This could open the compensation floodgates if it is found in favour of the claimants represented by the FCA. Alternatively, if the insurers win, it is highly likely that disgruntled claimants will start to go after insurance brokers!
• The UK looks like it might do a U-turn on Huawei re 5G (Tuesday). Previously, Boris Johnson had frustrated the Americans by ignoring their advice to cut Huawei out of the UK’s 5G network completely – but now it seems that ministers are considering the contribution of taxpayer cash towards an international scheme to standardise 5G network equipment. This could make it easier for rival suppliers to enter the market and compete with Huawei
• It looks like a lot of companies could be seeking out a secondary listing on the London Stock Exchange (Monday) as the NSYE and NASDAQ in America are looking to tighten their listing rules. This could be HUGE in terms of fees for advisers
• IPOs came back with a vengeance as Warner Music had a successful market debut (Thursday) as its share price shot up by 20% on its first day. Mind you, it wasn’t as good as ZoomInfo (NOT the Zoom you are thinking of – that’s Zoom Video Communications 😜), which saw its share price rise by a staggering 60% on its debut in its IPO on the same day (I bet their advisers are wishing they’d set a higher price!)

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” story this week was Two local teens grocery shopped for their grandparents. Soon it became a national volunteer effort (The Washington Post, Teddy Amenabar https://tinyurl.com/y7xtt9sq). Given what’s going on at the moment, something like this restores your faith a bit in humanity!

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.

• Beijing really stirred things up in Hong Kong by threatening to impose a new national security law (Tuesday). This caused an international outcry – the US said it would revoke special trading privileges for Hong Kong (Thursday) because it is not sufficiently independent from China and then the UK pledged to accelerate the path to citizenship for 300,000 HK citizens  (Friday) in a rather less dramatic response to the development. There’s no detail yet, but it seems that businesses in the territory are willing to submit to China in order to avoid the chaos of rioting that we saw last year
• The EU announced a coronavirus bailout response package (Thursday) comprising of a $750bn recovery plan and a €1.1tn budget over the next seven years. The idea here is to give a financial boost to countries that need it (particularly Italy, Spain and Greece) without adding too much to their existing debt burden. The Eurozone’s “frugal four” – Austria, Denmark, the Netherlands and Sweden – have already made objections so it’s going to be a tough few weeks of negotiation to get everyone to agree. I believe this could be make-or-break for Europe…

• French president Macron announced an €8bn bailout plan for the French car industry (Wednesday) in return for PSA and Renault bringing production to France. There were also grants for people to upgrade to environmentally-friendly vehicles. Funnily enough, research from the Brussels-based Transport & Environment campaign group said that investment by European car manufacturers into electric vehicles was actually greater than China’s – which itself is greater than that of the US! The new sense of urgency is all due to the new legislation that kicked in this year saying that manufacturers had to cut their fleet-wide carbon emissions to an average of 95g/km by 2021 or face massive fines
• IN EUROPE – VW lost a court case in Germany’s highest civil court (Tuesday), meaning that it will have to compensate the plaintiff for his purchase of a minivan which had been fitted with the emissions-cheating software. Whilst only having to pay €28,257.74 in compensation this time, it is expected that this will open the floodgates for other claimants. VW’s already paid out over €30bn in fines and compensation since the “dieselgate” scandal erupted in 2015 – and it looks like this is going to get bigger. Renault, Nissan and Mitsubishi said that they weren’t going to merge (Thursday) but they are going to divide up geographies and model expertise and try to be more efficient that way. This sounds like a recipe for disaster IMO (surely there will be a lot of squabbling going forward) and it certainly kills any ambitions to merge the three that the disgraced ex-head Carlos Ghosn previously had. Separately, Nissan announced that it was going to keep its Sunderland plant open and close the one in Barcelona (Friday). This now means that Nissan will have zero production capability in the EU 😱
• IN THE UK – McLaren announced that it would be cutting 1,200 of its 4,000 staff (Wednesday) due to the cancellation of sporting events and poor vehicle sales. Aston Martin announced the departure of its CEO Andy Palmer (Wednesday), which isn’t surprising given the company share price’s horrendous performance since its IPO. Although he did a good job of turning it around when he got the job in the first place the writing must have been on the wall when Lawrence Stroll and his investors rolled in recently

• Boeing axed 12,000 workers (Thursday) and then came more bad news from the airlines. Latam Airways, the biggest airline in Latin America, filed for bankruptcy protection (Wednesday), American Airlines cut 30% of its admin and managment staff (Thursday), Ryanair is going to be cutting up to 3,000 staff (Thursday) after earlier in the week announcing that it would be offering 1,000 flights a day from July 1st (Wednesday). Germany’s Lufhansa got a government bailout (Tuesday) but the EU got concerned that this would give them unfair advantages (Wednesday) and wanted to make them sell off lucrative slots in Frankfurt and Munich. Despite being weeks away from running out of cash, Lufthansa’s board refused to approve the bailout package. The drama continues…

• Under lockdown, I think everyone knows that online shopping activity has increased! Official figures showed that web grocery sales have doubled (Thursday), which probably explains why sales at Tesco and Sainsbury’s were greater than Aldi for the first time in ten years (Thursday)
• There was quite a kerfuffle about online apparel retailer Boohoo as a hedge fund published a damning report on the company (Wednesday) which was then rebutted by the company (Thursday). Boohoo then blew the hedge fund out of the water by buying the subject of the report (Friday) which will mean that the hedge fund concerned will have lost out as it has a short position on the stock. Hedge funds don’t like this and I think it’s unlikely that it will let this go. It’ll be interesting to see whether anything else comes out of this
• Monsoon Accessorize looks like it’ll be the next retailer to face bankruptcy on the UK high street (Friday) as it is on the verge of bringing in the administrators
• Cineworld calmed investors by telling them it had enough cash to last until the end of the year (Friday), adding that it would be opening all of its theatres (with appropriate social distancing measures in place) from July. Whether its proposed takeover of Canada’s Cineplex will go ahead on the current terms is another question, however (although no official comment on that has been made as yet)…

• Watson’s Yearly updates: Interest rates for South Korea and Nigeria fell and I’ve updated the relevant sections on the US (Trump delaying the G7 summit and calling for more countries to be invited), Hong Kong/China (re the national security law and threats on both sides) and Japan lifting its nationwide state of emergency

My favourite “AND FINALLY…” story this week was A McDonald’s in New Zealand lets diners eat inside a decommissioned airplane (Insider, Sophie-Claire Hoeller https://tinyurl.com/y8n4fxgu). This place looks great!

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 THE US – US Fed chief Jerome Powell warned that an economic recovery could take until the end of 2021 (Monday). I would say that he hasn’t got a clue and that the end of 2021 is close enough to be psychologically within reach but far enough out to sound plausible. The main point of what he said was that it’s going to take a while
• JAPAN fell into recession (Monday) after its second successive quarter of contraction and it doesn’t look like things are going to get better any time soon…
• Germany and France put on a united front to put forward a €500bn bailout package for Europe (Tuesday). This sounds great, but they will have to get the other 25 members of the eurozone to agree to the terms. It does show, however, a major step forward for a Europe that has so far been dragged down by discord in the face of the coronavirus. Meanwhile, the Bundesbank highlighted signs of economic improvement (Tuesday) as stronger performance in construction mitigated difficulties in the manufacturing and services sectors
• IN THE UK, the Bank of England discussed the possibility of introducing negative interest rates (Thursday) and Chancellor Rishi Sunak extended the mortgage holiday (Thursday), which will come as a relief to many people who are uncertain as to their current and future income

• IN THE US – troubled department store JC Penney filed for bankruptcy protection (Tuesday) following on from similar moves from Nieman Marcus and J.Crew. On the other hand, Apple started opening some of its American stores (Tuesday) while Walmart (Wednesday), Target (Thursday) and Home Depot (Wednesday) all seem to be doing well (although I do wonder how sustainable that is with Home Depot if the housing market doesn’t fire up soon). In signs of a tentative return back to normality, US retailers are phasing out hazard pay (Wednesday) which isn’t going down well with employees or their unions as they argue that nothing has really changed in terms of being exposed to risk. Amazon, Kroger and Rite Aid are among those to go down this road, but in fairness to them they all said that the pay rises and one-off bonuses were for a limited time only and the deadlines have been extended more than once
• IN THE UK – Things are still looking pretty tricky for retailers and anything related to them. Retail landlord Intu is asking for a “standstill agreement” with its lenders (Tuesday) and French Connection is looking wobblier by the day (Wednesday) as it said that it will run out of cash in the next few months. Marks & Spencer’s nightmare continues (Thursday) as clothing sales have been decimated by the lockdown. Food has done OK but has been has been held back by the fact that many of its outlets are close to offices (which are closed) and transport hubs (like railway stations, which are also closed). Hopefully, its fortunes will improve from September when its partnership with Ocado is due to start
• It is worth highlighting that Shopify unveiled more services for retailers (Thursday) and an expansion into groceries and its own logistics network. It’s behind Amazon in this, but it seems like it has ambition. It’s also going to be part of Facebook’s new service that I’ll mention in the next section…

• Facebook announced a new service on its platform called Facebook Shops (Wednesday) which aims to create a digital store front for retailers, taking Amazon on at its own game. Given Facebook has 2.6bn current users, this could be an attractive alternative proposition – especially given allegations from third party sellers that Amazon users “their” data to make competing products at lower prices. Separately, Facebook’s Mark Zuckerburg said that he expects half of his employees to be working from home within ten years (Friday) as people get used to working like this during the outbreak
• Spotify announced a big deal to get Joe Rogan’s podcast exclusively on its platform (Wednesday). It is said that this deal was worth in the region of $100m, but there was no official confirmation. It fits in well with Spotify’s recently stated strategy of moving into engaging content outside of music

• Two UK battery makers, AMTE Power and Britishvolt, are looking to join forces (Thursday) to make batteries for carmakers and energy storage groups. There’s talk of a £4bn project between the two that could be funded by an IPO further down the line. This could be an exciting development as car making in the UK continues to decline
• The world’s biggest catering company, Compass, decided to raise a chunky £2bn from investors (Wednesday) in order to help it survive the sudden lack of business that the sudden closure of canteens and educational establishments (their bread and butter!) has led to. This would seem like a prudent move from the company and should give them some breathing room
• AstraZeneca is ramping up production capability for a prototype coronavirus vaccine (Friday), which sounds exciting but means nothing unless the drug manages to pass all the tests! Still, a move in the right direction…

• Watson’s Yearly updates: Not so many updates this week. India, Turkey and South Africa cut their respective interest rates by around 0.5% each this week in an ongoing response to the coronavirus outbreak

My favourite “AND FINALLY” stories of this week were the brilliant Man’s awkward error on personalised glass for fiancee’s 30th birthday (The Mirror, Paige Holland https://tinyurl.com/yd3q5fmc) and news on two coronavirus-inspired inventions. Firstly, there’s the rather ridiculous Mask in a restaurant? This one can gobble like Pac-Man (Reuters, Eli Berzlon https://tinyurl.com/ycfayj52) and then the actually quite practical Japan has a Reassuring Door Opener to soothe coronavirus fears, so let’s try it out (SoraNews24, Casey Baseel https://tinyurl.com/y93aet7o).

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 THE US AND CHINA – increased tensions between the two sides made markets wobble (Wednesday) as the January phase one agreement looks increasingly vulnerable and fears rise of a “second wave” of infections
• INDIA got a $266bn stimulus (Wednesday) to get the country through the coronavirus. This is equivalent to about 10% of India’s GDP and could be PM Modi’s chance to reform India’s land, labour and liquidity laws for the future
• RUSSIA’S got a bit of a leadership issue at the moment (Tuesday) because the guy that Putin picked to be his “new” PM at the beginning of this year, Mikhail Mishustin, is laid low with the coronavirus and has a stand-in who is now responsible not only for containing the spread of the virus, but also how to lift lockdown. What a job to come into! Andrei Belousov will clearly be Putin’s fall guy if anything goes wrong…
• EUROPE is having ongoing issues following the recent ruling of Germany’s constitutional court (Monday, Thursday) as some of the populist European countries are seeing it as an opportunity to put pressure on the EU. If this doesn’t get solved, there could be serious consequences – potentially even meaning the break-up of Europe. Surely it won’t be allowed to go that far, but I don’t think it’ll be a smooth ride to any kind of accord…
• There was confusion in the UK as some lockdown restrictions were lifted (Monday), but there was a lot of relief when chancellor Rishi Sunak extended furlough until October (Wednesday)
• IN OIL NEWS – the weak oil price continues to have repercussions. Saudi Aramco announced a 25% fall in profits due to the weak oil price (Wednesday) but both Brent and WTI have been rising as Saudi Arabia and other allies have committed to additional cuts from next month. If things are bad for Saudi Aramco, you know they are going to be bad for everyone else. According to Rystad Energy, 140 US oil and gas companies will file for bankruptcy protection this year and US shale producer Chesapeake Energy has hired in consultants to advise over its future (Tuesday) – with bankruptcy being a possibility
• IN ECONOMIC INDICATORS – there were some concerning bits of news regarding the US and UK consumer this week. In America, many people will lose their health insurance as almost 50% of Americans get it through their jobs (Tuesday) and although the government has said it will cover the costs for 28m uninsured, many are saying this won’t be enough. Presumably, the number of people losing their health insurance will increase over time as unemployment numbers rise. This is surely going to play on the minds of many a consumer and dampen any extraneous spending. In the UK, two separate surveys showed a fall in consumer spending. A survey conducted by the London Business School showed spending falling by 40% in April (Tuesday). This is shocking when you consider that the Bank of England’s recent forecasts of Britain’s worst recession for 300 years was based on consumer spending falling by “only” 30%! Another survey by the British Retail Consortium (BRC) said that sales were down by 20% in April versus the same quarter last year (Wednesday) – the biggest drop since records began in 1995. Whichever one you believe, the trend is the same! Also, the world’s biggest shipping container company, Maersk, painted a bleak picture of global trade (Thursday) and said that the coronavirus would lead to more protectionism and therefore less shipping around the world. Maersk is seen as a bellwether for global trade given its size, so this is not great news…

• Landsec cut the value of its retail property portfolio by almost 9% (Wednesday), reflecting ongoing losses in the retail sector and lower rent payments. The property landlord expects more business failures and higher vacancy rates and doesn’t expect activity to reach 2019 levels until 2022 at the earliest
• On the plus side, Superdry and Primark are benefiting from their European stores reopening (Monday) and some online retailers are doing a roaring trade. AO.com’s chief exec said that trading is like “Black Friday every day” (Wednesday) and Boohoo is actually building up money to make acquisitions (Friday)

• Richard Branson is trying to help Virgin Atlantic survive by selling off a stake in Virgin Galactic (Tuesday) and raising money from investors (Friday) amid carnage in the whole of the travel industry as Qatar Airlines and British Airways announce more job losses (Friday)
• Elsewhere, car rental companies continue to suffer (Monday) as they are highly exposed to the airline industry and because, over the years, they have been owning a higher proportion of their fleets. This will potentially leave them nursing more losses as falling secondhand car prices mean their resale value will be lower

• On the plus side, China car sales are going up (Monday), confirming what VW said last week BUT the company said that it would be stopping the manufacture of four models (Thursday) because of lack of demand in Europe. Pickup truck sales are doing well in America (Monday), but Toyota paints a downbeat picture (Wednesday) for its profits

• Watson’s Yearly updates: Not so many updates this week. Mexico cut its interest rate and there were a few other changes, but nothing too major.

My favourite “AND FINALLY” stories of this week were the hilarious Dog sees himself on the news and has priceless reaction to his TV appearance (The Mirror, Paige Holland https://tinyurl.com/yc7lqmy7) and the very touching Mum comes up with heartwarming idea so kids can hug grandparents in lockdown (The Mirror, Paige Holland https://tinyurl.com/y8n3xdpo). What a week!

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 THE US – President Trump has been ratcheting up the anti-Chinese rhetoric (Tuesday, Thursday) and threatening to impose more taxes if President Xi decides to pull out of the agreement they reached in January
• IN CHINA – Exports are actually rising (Friday), although doubters say this is a one-off as China catches up with the backlog. Domestic tourism is also starting to pick up (Monday) and consumers are spending as Lego and Dominos Pizza are among those seeing a sales uptick (Monday). Even VW is seeing car sales being not far off what they were this time last year (Thursday)
• IN EUROPE – more countries are talking about or lifting restrictions (Tuesday, Friday) BUT there are going to be difficult balances to be struck between workers and unions on one side wanting safety guarantees and businesses and politicians on the other trying to get the economy going. There’s trouble brewing between Germany and the ECB (Wednesday) as the country’s highest court ruled that if they don’t get a proper explanation as to specific objectives of the ECB’s massive bond purchasing programme, they won’t let the Bundesbank (Germany’s central bank) pay into it. This would be a problem given that Germany is Europe’s biggest economy. ECB President Christine Lagarde batted this away (Friday), but I think there could be potential trouble if this dents investor confidence. Cracks in Europe, perhaps?
• IN THE UK – the government decided to delay a planned business rates review by one year until 2022 (Thursday), something that will be particularly painful for retailers looking to conserve as much cash as possible. The Bank of England did nothing to lighten the mood as it said that the UK is facing the worst recession for 300 years (Friday). Thanks for that 👍

• Well we heard from the aircraft makers last week but this week got off to a bad start as Warren Buffett revealed that he’d sold all of his airline stocks (Monday) at a shareholders’ meeting. He sold chunky stakes in Delta, American, Southwest and United Airlines
• Aeroplane engine makers are feeling the pinch. Rolls-Royce is going to make cuts (Monday) but there are no details as yet, but GE cut 25% of its workforce (Tuesday) as it sped up pre-coronavirus cost-cutting plans
• Airlines hit more turbulence as Virgin Atlantic cut about 1/3 of its staff and quit Gatwick (Wednesday), although Gatwick was probably relieved that Norwegian Air got a state bailout (Tuesday)
• When the airlines suffer, they don’t do it in isolation – car rental companies are having a nightmare as 2/3 of their business comes from airlines. Avis Budget, Enterprise and Hertz are all having major problems (Tuesday) although Hertz managed to avoid bankruptcy by agreeing a deal with lenders to extend a payment deadline
• Airbnb sacked 25% of its workforce (Wednesday) on the one hand, but then said that European bookings were up on the other

• Social distancing gadgets are garnering a lot of interest (Monday) as companies like Fitbit (watches), Salesforce (CRM software) and Midlands-based company called Wearable Technologies (“smart” hi-viz jackets) offer their products as workable solutions to the social distancing problem
• Demand for PPE is keeping companies like Gompels Healthcare, ICL Tech, Doncaster Plastics busy (Tuesday), but problems will no doubt emerge as to how to prioritise orders due to higher demand when people start going back to work
• Apps helping healthcare professionals are seeing a spike in usage (Wednesday) e.g. eConsult and accuRx
• Nintendo has benefited from lockdown (Friday) with strong software and Switch console sales. However, can this be sustained as we enter the end of the traditional console cycle? Sony and Microsoft will be bringing out their new consoles this year, so gamers may seek out something new…
• Halfords is benefiting from the renewed interest in cycling (Thursday) as people try to commute without using public transport and Peloton is benefiting from strong demand for solo online workouts (Thursday) as gyms remain closed and people continue to be nervous about exerting themselves in close proximity to strangers

• Netflix is starting to crank up content production again (Wednesday) with filming restarting already in South Korea, Japan and Iceland. Sweden will restart this month and Norway will be next month. This will be of immense relief to all concerned as people have been binge-watching so much content that the cupboard for new stuff is looking rather bare! This will put pressure on other studios to follow suit but it will no doubt present all sorts of logistical problems…
• California is going for the jugular of Uber and Lyft (Wednesday) by suing them for misclassifying their drivers as contractors rather than employees. If Uber and Lyft lose, they will face a massive increase in employment costs but they also announced big job cuts (Thursday). Mind you, Uber finished the week on a high by announcing the purchase of a big stake in e-scooter company Lime (Friday) and will fold its existing e-scooter business, Jump, into it
• The US meat shortage is continuing (Thursday), so plant-based protein alternatives like Beyond Meat should try to take full advantage of this opportunity! They have the ability to flex margins, so can make prices more competitive
• Liberty Global and Telefonica agreed to merge their UK-based Virgin Media and O2 businesses (Friday). This will give BT a proper competitor! It’ll probably be subject to all the usual regulatory approval bits and bobs so won’t complete for a while yet…

• Watson’s Yearly updates: This week, I have made a few updates including Trump getting feisty with China, the highest US unemployment rate since WW2, Brazil’s interest rate cut, Argentina approaching debt default, India lifting a ban on alcohol, the success of the UK’s “bounce back” loans, Germany taking on the ECB, Spain’s “phase one” easing of lockdown restrictions, Putin’s lowest approval ratings for 20 years and Iran cutting four zeros off its currency!

My favourite “AND FINALLY” stories of this week were the rather ridiculous Woman in hysterics after receiving fake AirPods that were bigger than her head (The Mirror, Paige Holland https://tinyurl.com/y9o47avb) and the superb A British nurse is the chosen superhero in new Banksy artwork (MSN, Paul Sandle https://tinyurl.com/yadhfqc3). Have a great weekend out there!

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.

• France and Germany are tightening regulations to stop foreigners from taking advantage of current circumstances (Thursday) and buying up important assets on the cheap. Spain has already made moves in this regard and it seems that they are all heading advice from the EU to protect their own companies. This is because everyone is getting wary of cashed-up investors, like Gulf-state sovereign wealth funds, going on a bargain hunt. The Qatar Investment Authority said it was looking to scoop up assets in the health and tech sectors (Monday)
• Countries are starting to change their lockdown statuses. Although Russia is extending its lockdown (Wednesday), Spain, France, Italy and Germany are all relaxing conditions to some extent (Monday) as well as some parts of the US
• UK companies are in various states of lockdown lifting mode – Travis Perkins says that 70% of its shops are now open (Wednesday), Nando’s and Burger King are making plans to return (Wednesday) and will join the likes of McDonald’s and KFC while Wetherspoons and Dixons are also looking at how they might return (Thursday). Interestingly, Tesco’s has started to cut some of the people it hired when things were getting a bit crazy (Tuesday)

• Facebook (Thursday) and Google (Wednesday) said they were seeing a bottoming out in ad revenues although Twitter wasn’t as bullish (Friday). Still I think their prospects are better than WPP, the traditional ad agency, which is having a nightmare (Thursday)
• Microsoft continues to benefit from working from home and videoconferencing (Thursday) while Zoom had to make the embarrassing admission that it had exaggerated its success (Friday)
• In hardware, Apple said it would delay the production of its new iPhones (Tuesday) that were originally due to launch in mid-September and they announced reasonable numbers for the quarter (Friday) but remained tight-lipped about prospects for the current quarter

• UBS, Santander, HSBC (Wednesday) and Lloyds Bank (Friday) announced their quarterly numbers. Their performance was mostly OK for the quarter but they took a massive hit on loan loss provisions as they readied themselves for the potential storm to come when individuals and companies will inevitably start to default. The real test will be how the banks perform in the second quarter IMO

• Airlines are having a nightmare. Norwegian Air, Virgin Atlantic, EasyJet, Lufthansa, Air France-KLM and US carriers are all at various stages of trying to borrow large amounts of cash (Tuesday) but BA announced big job losses and mooted the possibility that they wouldn’t be using Gatwick
• If it’s a nightmare for the airlines, I would argue that it’s even worse for the aeroplane makers because airlines can try to pull out of purchases etc. plus thousands of cheaper planes could suddenly be available (Tuesday) as airlines around the world go bust and the aircraft they have been leasing become available. Both Boeing and Airbus are cutting costs (Tuesday) and they don’t see a return to “normality” for a few years yet

• The US meat supply chain is breaking down. Tyson Foods had to shut three slaughterhouses (Tuesday) and now, around 30% of US pork processing capacity and 14% of beef capacity has been shut down. Trump hit back by invoking the Defense Production Act (Wednesday), forcing the companies to stay open. The DPA is legislation that was used during the Korean War era to compel companies to remain open for the national interest. The problem is that employees don’t want to work in an environment where they could catch the coronavirus (understandable!), but if the government forces them to go to work, they will not be able to sue companies for failing to provide the right protection
• On the other hand, plant-based meat substitutes have been seeing a major uptick in sales (Monday). OK, so it’s from a low base, but for future reference it is interesting to note that production of meat substitutes involves fewer staff and is therefore more sustainable under social distancing restrictions

• Watson’s Yearly updates: Not tremendous amounts this week. A few minor sporty event updates, interest rate cuts for Mexico, China, Turkey and Russia plus a few extra comments on the increasing popularity of meat-alternatives, cannabis trends and streaming content  

My favourite “alternative” stories of this week were the amazing Massive coronavirus-themed grass graffiti is unveiled in Swiss Alps (Reuters https://tinyurl.com/y9vvkt23) and the quite frankly completely bonkers Japan’s latest work-from-home innovation: The wearable video conference background (SoraNews24, Casey Baseel https://tinyurl.com/ycqzpr2f). Enjoy!

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 THE US, the number of Americans claiming unemployment benefits rose again, but by slightly less than analysts were expecting. There was some cheer, though, towards the end of the week as investors started to think about lockdown easing and news that Gilead’s Ebola drug seemed to be working well against the coronavirus (Friday)
• IN ASIA, China announced terrible GDP figures for the first quarter (Friday), Japan declared a “state of emergency” on Thursday this week and PM Abe announced that the government would be distributing $1,000 to every citizen (Friday) to help them through the crisis
• IN EUROPE, it seems that the “agreement” reached by European finance ministers last week to bail Europe out did not go down well with the poorer southern European countries and Italy complained loudly (Tuesday), President of the European Commission Ursula Von der Leyen sounded a more concessionary tone and President Macron called for more understanding by the richer countries (Friday) or risk Europe falling apart. Meanwhile, some European countries are preparing a tentative exit from lockdown (Friday). Incidentally, the UK said it would refuse an offer for a Brexit extension (Friday). A timetable for further Brexit talks was decided this week, but it sounds like exit is still supposed to be for the end of this year
• IN OIL, the production cuts that were announced last week didn’t really do much to boost the oil price, despite the 10m barrels a day cut equating to about 10% of the world’s oil supply. Even Trump’s attempts to talk up the price failed (Tuesday) but I think that major problems remain. Demand has evaporated and oil inventory has built up so much that there isn’t much space left to store it – even on tankers anchored out to sea! Demand will need to pick up and help run inventories down before these production cuts will have any effect

• This week saw loads of US BANKS reporting their results. Big losses on loans were announced by the likes of Wells Fargo, JP Morgan, Bank of America, Citigroup and Goldman Sachs, but it seems that Morgan Stanley did the least badly (Friday). Trading revenues for all of them were up as investors got involved in market volatility, but on the flipside, lucrative fee income from investment banking was way down. It’s impressive that they still managed to churn out a profit for the quarter, but I think it’ll be even more impressive if they manage to do it for the next one!
• There was a lot of chat about AIRLINES this week. US airlines including American, Delta, United, Southwest, Alaska and JetBlue agreed to a $25bn bailout deal with the US Treasury (Wednesday) but that won’t be much help if there aren’t any passengers (Thursday). Wizz Air and Norwegian Airlines were the latest European airlines to get in trouble (Wednesday) and EasyJet is starting to think of how to fly whilst social distancing (Friday)
• CAR MAKERS featured in this week’s news, what with Renault deciding to pull out of its China JV (Wednesday) because it just wasn’t working. They were late to the China party anyway, but will still maintain a presence by concentrating on electric vehicles and light commercial vehicles. Also, Toyota, Renault and VW were talking about phasing in production (Wednesday) in their European plants. Nice news, but I wonder where all the customers are going to come from!

• Facebook decided to rein in its ambitions for Libra (Friday), which is not surprising given the hatred thrown its way by politicians, central bankers and the financial industry in general. It will still exist, but in a much more limited form
• Airbnb managed to raise yet another $1bn (Thursday) as it seems that it still has “pulling power” with investors. I think that it has a decent business model and should stand to benefit greatly once lockdown restrictions are lifted. Although international travel may take some time to normalise, I would have thought at least some of the slack would be taken up by people travelling domestically
• Verizon bought videoconferencing company BlueJeans Network for an undisclosed sum (Friday), which is probably a good purchase from a strategic point of view but I am sure that they wish they’d closed it down earlier because the two sides have been in talks for a year! No doubt they could have bought it for a more reasonable price had they closed it off before the coronavirus outbreak! Still, I think that videoconferencing will continue to grow even once this lockdown is eased as people will have had ample time to get used to it

• I have added a number of updates to Watson’s Yearly this week. There’s a load of cancellations of sporting events, movie releases and the postponement of the Democratic National Convention from July the week of August 17th. Also, I’ve added stories about the US swiping a big order of facemasks from Germany and other things. You really should have a read of Watson’s Yearly as it has LOADS of information in it that will be useful to you – especially if you want to see things from a global perspective. It’s pretty long, so you may not be able to read it all in one sitting, but you should revisit it from time to time!

It was all looking pretty quiet for much of this week on the “alternative story” front, but then Friday happened. Two cracking stories that were my favourite this week were All the wonderfully British things that won’t be happening this May (Metro, Jen Mills https://tinyurl.com/y7yb9mya) which highlights some uniquely British events that we need to support when things get back to normal! However, my favourite story for quite some time is this one: Dog steals set of false teeth and wears them perfectly leaving owner in stitches (The Mirror, Luke Matthews https://tinyurl.com/yclbclmq). This is something that you can’t unsee and I still find myself laughing when I think of it.

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 THE US, social distancing measures were extended (Monday) and Trump even had to admit things are getting bad (Thursday) saying that Americans faced a “very, very painful two weeks” and that deaths could number between 100,000 and 240,000. There was also a massive leap in unemployment (Friday) as the coronavirus outbreak continues to bite. It is worth noting that the US approach puts more emphasis on boosting unemployment benefits whereas the UK and European approach is more about underwriting a large proportion of furloughed workers’ wages
• IN CHINA, it sounds like things are cautiously edging towards normality (Wednesday) as factory activity is picking up, but I think recovery is far from being a given as there is always risk of a “second wave” as immigrant workers and students return to work
• REGARDING MARKETS, I think that no-one knows what is going on at the moment. I don’t think we’ll get a handle on things until we have a proper idea of the magnitude and duration of the shock, how quickly businesses and individuals can get their hands on the money promised to them by their respective governments and what the post-coronavirus world might look like. Clearly, not all investors can or want to get out of the market at the moment, but share prices are all over the place and I hear that trading is very difficult as a result

• Global pharmaceuticals companies are now working together and pooling data and resources (Tuesday) in order to combat the coronavirus. They have also made moves to make any potential treatments more accessible. AbbVie (which makes a potential treatment called Kaletra) has given up its global intellectual property rights for the treatment, Johnson & Johnson said it was going to make its vaccine available on a not-for-profit basis and even Gilead Sciences, which faced massive crititism from activists, decided to give up its “orphan drug” designation for its potential treatment remdesivir. For an absolutely brilliant graphic which gives you an overview of what stages each drugs are at, you should definitely have a look at https://www.visualcapitalist.com/every-vaccine-treatment-covid-19-so-far/
• Everyone is trying to advance contact tracing (Tuesday) which involves the use of bluetooth on phones to track the potential spread of infection. It worked really well in Singapore with an app called TraceTogether and such things have worked in China, but there will probably be more concern here over potential privacy/human rights issues re the implementation
• British engineers are getting together to produce ventilators (Tuesday) as VentilatorChallengeUK brought together a consortium of aerospace, automotive and other engineering companies from companies including Airbus, Ford and McClaren. The engineers are from industries that have been in decline over the years and I do wonder whether this repurposing will potentially give these companies an interesting alternative direction when this whole thing dies down
• A number of problems have been highlighted this week, though, as masks coming from China have been rejected by medical staff (Monday) for being of poor quality and medical gloves could be the next thing to run out (Tuesday) as around two-thirds of the world’s supply is made in Malaysia and the country is struggling with a recent influx of global orders. Malaysia is in lockdown for at least one month and the factories that are open are running at less than 50% capacity. There is an order backlog of four months

• In the UK, home sales of beer shot up exponentially (Monday) – not surprising since off-licences have been deemed “essential” and that this is one of the only
• Restaurants that have “drive-in” facilities are keeping sales alive (Monday) because of their contactless nature. Burger King (owned by Restaurant Brands International), KFC (owned by Yum Brands) and McDonald’s are managing to keep things ticking over. Interestingly, Wendy’s “drive-thru” business now represents about 90% of its US business (versus about two-thirds before the coronavirus)
• Zoom, which has been seeing a massive uptick in usage, has been subject to an increasing amount of criticism. There were general grumbles about lax security (Monday) which then resulted in the New York state attorney-general, Letitia James, getting involved (Wednesday). Zoom subscribers have since been informed by the company of tightened security. It’s good that the company has addressed the issues quickly because if this drags on, all the gains they have made will just slip through their fingers
• Gaming companies, content streamers and various other apps have all benefited from people being trapped at home (Friday). This is obviously great for those benefiting right now, but I think that the real test will come with keeping the gains that they’ve made as everyone’s lifestyle returns to normal – especially if people start to rein in extraneous expenditure.

• I have added a number of updates to Watson’s Yearly this week. There’s a load of cancellations of sporting events, movie releases and the postponement of the Democratic National Convention from July the week of August 17th. Also, I’ve added stories about the US swiping a big order of facemasks from Germany and other things. You really should have a read of Watson’s Yearly as it has LOADS of information in it that will be useful to you – especially if you want to see things from a global perspective. It’s pretty long, so you may not be able to read it all in one sitting, but you should revisit it from time to time!

My favourite “alternative” stories this week all have to do with things that people are doing to get themselves through the current situation. Woman’s recipe for Greggs-inspired bakes you can make at home for just 37p (The Mirror, Paige Holland https://tinyurl.com/ukf74qo) is great for people who yearn for familiar tastes they used to take for granted and People around the world are playing bingo with neighbors from their balconies (Insider, Monica Humphries https://tinyurl.com/t7kc9kt) makes your heart sing at the way we are seeing outbreaks of community spirit breaking out all over the world! However, I absolutely love what the parents in this story did for their son on a very important birthday: Parents convert garage into ‘Club Quarantine’ for their son’s 21st birthday bash (The Mirror, Paige Holland https://tinyurl.com/ukdu88h). What absolute legends!

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 THE US, Trump talked about “reopening” the economy by April 12th (Wednesday)! Meanwhile, the Fed committed to buying unlimited amounts of government debt (Tuesday) and then the Senate passed a $2.2tn stimulus package (Thursday) which was then voted through by the House of Representatives on Friday. Markets shot up on anticipation of the package, which includes all sorts of measures for individuals and companies, and then relaxed ahead of the next stage – the implementation
• IN RUSSIA, the mayor of Moscow questioned Vladimir Putin’s relatively relaxed stance on the coronavirus (Wednesday) but then the President changed his stance (Thursday) and said that he would postpone the vote scheduled for April 22nd that would have given him the right to continue his reign of power for another 12 years. He also announced a mini-lockdown and that he’d finance anti-coronavirus measures by taxing interest from deposits of over around $13,000 (Friday). He implied this would be taking from the rich, but one data source said that over 55% of deposits have more than that amount! Many individuals spend years building up a nest egg in order to boost a meagre state pension, so this pain will be felt by many
• IN CHINA, it seems that things may be edging slowly towards reality as restrictions in and out of Hubei province are being relaxed (Wednesday), but Wuhan will still have restrictions until April 8th
• IN JAPAN, Tokyo’s governor, Yuriko Koike, warned that the world’s biggest city could be facing an “explosive spike” in new cases (Friday) – in a statement made only 24 hours after the Olympics were officially cancelled! She appealed for residents to work from home and stop going out in the evenings as well as suggesting that universities should delay the start of the school year in April. Supermarket shelves emptied virtually straight away
• IN INDIA, large areas of the country went into lockdown (Monday) after PM Modi eased Indians into the idea with a “people’s curfew” where everyone was asked to stay in for a day. The main problem at the moment in the country is lack of testing
• IN SOUTH AFRICA, President Ramaphosa ordered a 3-week lockdown (Tuesday). People were told to stay at home and all non-essential businesses had to shut down. Sound familiar??
• IN EUROPE, Germany announced big grants, loans and credit guarantees (Tuesday) for companies and individuals and IN THE UK, Rishi Sunak announced a bailout package for the self-employed (Friday) following his recent promise to underwrite 80% of employee wages. Nice promises, but the key will be how this is all executed (speed being particularly of the essence)

• Supermarkets are just selling product like crazy. In the US, Target is seeing its sales climb (Thursday) but profitability fall as its big margin items (particularly apparel) aren’t selling so well. UK supermarkets are on a hiring spree (Wednesday) because they can’t restock the shelves and fulfil the online orders fast enough, but there’s a risk that the hiring will have to keep going as more workers fall ill. Interestingly, off-licences have been deemed to be “essential” (Thursday), but many of them have been suffering like the supermarkets in terms of the deluge of online orders! Majestic had to take its website offline for one day this week in order to give staff in their shops a chance to catch up with online orders and they are likely to take two weeks to be delivered rather than the usual two-to-three days they normally take. Naked wines, Oddbins and Laithwaite’s also suspended online orders. Meanwhile, independent shops (i.e. corner/convenience-type shops) are also doing pretty well (Monday)
• Apps that entertain and help people keep in touch with colleagues and friends have seen a huge surge in popularity. Houseparty and Zoom are among those seeing particularly strong growth (Wednesday)
• At the higher end of the socio-economic scale, luxury yachts and private jets are seeing a major boost in demand (Monday)

• Boris Johnson tested positive for the coronavirus, Virgin Atlantic is looking to ask for state aid and Sports Direct indulged in a bit of price gouging by raising prices of some sports equipment by 50% (Wednesday) while online retailers were shut down one-by one. Next, Yoox, Net-A-Porter and Paul Smith were among those to close their operations as they bowed to increasing pressure from employees

• I have added a number of updates to Watson’s Yearly this week. Many of them are already included in THIS report, but stuff I’ve included for the YEARLY are interest rate cuts in Canada and India and developments in Brazil as Bolsonaro’s rather casual treatment of the coronavirus has prompted drug gangs and paramilitary groups to enforce social distancing with violence. I’ve also mentioned Angela Merkel’s comeback as the calm leader needed by Germany and Europe in the current crisis. Other than that, there have been more sporting events cancelled – including the Olympics – and fixtures like Wimbledon are looking pretty shaky at the moment. For a full list of events that have been cancelled, please have a look at Watson’s Yearly. I do all the updates in blue – and it is a SEA of blue unfortunately.

I had no less than THREE favourite “alternative” stories this week! Woman suffers mortifying fail on video chat with colleagues while working from home (The Mirror, Luke Matthews https://tinyurl.com/tqx28tw) just sounds like a nightmare 😂 and there are shocking visions of the near future in People are cutting their own hair during lockdown – and it’s not going well (The Mirror, Paige Holland https://tinyurl.com/vvmbbf5). Yikes! However, I will end this week on what I think must be the greatest cat video ever made in Japan’s Cats and Dominos video warms the heart, makes us want to home and watch it all day (SoraNews24, Casey Baseel https://tinyurl.com/v6ow5ws)

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 world’s central banks have been very active cutting interest rates. The US kicked off the week by knocking off another 0.5% off its interest rates (Monday) to take them to the 0-0.25% range, the Bank of England cut interest rates yet again (after cutting them by 0.5% last week) from 0.25% to 0.1% (Friday)– the lowest interest rate it has ever had in its 325-year history – and the ECB is buying a ton of bonds (Friday). UK chancellor Rishi Sunak made some dramatic announcements at the end of the week saying that the state would pay companies to stop sacking their workers by paying 80% of each employee’s salary. Pressure continues to build re what to do about the self-employed who are not covered by measures so far

• Airlines and airports are crying out for state help (Monday, Tuesday) as flight cancellations and travel restrictions continue to hit hard, restaurants and pubs in the UK close down and the number of retailers closing their shops continues to increase (Monday) including places like Lululemon, Under Armour, Urban Outfitters, Abercrombie & Fitch, Nike and Apple. Halfords closed down its Cycling Republic stores (Tuesday), Carphone Warehouse shut down all of its stand-alone outlets (Wednesday) and Laura Ashley went into administration (Wednesday). With so many sports events being cancelled around the world, bookmakers are looking at potentially massive losses (Tuesday) and UK property funds have stopped withdrawals (Thursday) as too many investors tried to get their money out at the same time and the funds could sell the underlying property assets fast enough. LSL and Countrywide also abandoned merger talks (Tuesday) amid turbulent market conditions

• Grocery and online retailers are doing very well indeed as they try to keep up with a massive upswing in demand. Amazon announced plans to increase its workforce (Tuesday), as did Walmart (Friday) and the Co-Op (Friday), among others. In the UK, I think that the incumbent supermarkets who have been seeing market share leach away to Aldi and Lidl over the last few years are going to see a massive boost because, unlike the German discounters, they have a fully-functional grocery delivery service. I would even argue that they will also benefit when the outbreak calms down because I think that they could win new customers who have never shopped online. These people may become accustomed to the advantages of online shopping and continue to do so – and they will be customers who would potentially have taken years to win over.
• If things get even tighter on the high street, it is possible that only “core” shops will be able to remain open. Supermarkets, M&S and convenience store/newsagents McColl’s, B&M, Pets at Home could be OK (Friday) according to some,  given that they supply basic needs. Companies that stream content are also doing very well as people need to be entertained and stimulated! Music revenues are up via Apple Music and Spotify (Tuesday), Netflix is doing so well that Brussels has asked it to lower picture quality to make sure there’s enough broadband capacity (Friday), Fitness apps are also seeing a boom (Thursday) as are companies who provide online learning (Thursday). In addition to this, companies involved in helping the sudden rise in those working from home are also doing well. For more in-depth comment on this, please see Watson’s Weekly – Working-From-Home Edition 😁

• Once again, there are too many changes to list here regarding cancellations of events etc. but I’ve updated the “Themes for 2020” section regarding streaming and updated interest rates

My favourite “alternative” story this week was, by far, Dad takes matters into own hands with quarantine maths lesson – and it’s epic (The Mirror, Courtney Pochin https://tinyurl.com/t9xdprn). A good use of mathematical skills 😂…

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.

• ITALY announced a big stimulus at the beginning of the week of €3.6bn (Monday), which is addition to the €900m it has already allocated to the hardest-hit regions in the North of Italy
• Markets have been very volatile this week and the US central bank cuts its interest rates by 0.5% (Wednesday) to a 1-1.25% range in an effort to slow the market slide. Many – including President Trump – said that this wasn’t enough, but to be fair to Jay he’s raised rates in the past which means that he now has some leeway to address the current situation. If he’d caved to Trump’s constant pressure to cut rates he would have had far less wiggle room. As it is, there’s already talk of another cut in the offing
• CHINA is showing some signs of returning back to normality as Foxconn is aiming to return to normal levels of production by the end of this month (Wednesday), which is particularly impressive when you consider that staff levels are just above 50% of normal levels currently. Also its seems that levels of pollution are heading towards their normal levels (Thursday) according to satellite data from the Centre for Research on Energy and Clean Air which monitors levels of nitrogen oxide in China’s atmosphere. Economists tend to use seemingly random information from places like this in order to compare it with officially sanctioned data because the latter is often viewed with heavy scepticism given the centralised nature of the economy
• Airlines continue to suffer with more route cuts and booking cancellations due to the coronavirus(Tuesday) so the industry’s trade body, IATA, is trying to get normal rules suspended for take-off and landing slots. Under normal circumstances, if the airlines don’t use their allocation at least 80% of the time, they lose them – but given the havoc caused IATA is saying that it would be unfair to penalise airlines. Talking about airlines, Flybe fell into administration (Thursday) but given its tricky past and its dodgy financials being made even worse by the coronavirus impact, the government just decided it wasn’t worth bailing them out.

• Oil prices weakened – and things got worse on Friday as the meeting between Opec and Russia concluded without agreement on production cuts that would help to stabilise the oil price. Russia was uncomfortable with the additional cuts being proposed by Opec and they could not find common ground. This could be a problem for President Putin who needs to finance a major $60bn economic stimulus package (Tuesday) as Russia’s break-even price for oil is $42 a barrel but it is also a nightmare for US shale producers (Wednesday) whose production costs are higher than those for “traditional” producers
• There were some really interesting car-related developments this week. VW talked about its plans to spend €33bn on producing emission-free cars over the next 9 years to overtake Tesla (Monday) and, crucially, that they were going to make money on the cars from day-one (unlike Tesla who went through years of losses). General Motors announced a breakthrough in battery technology (Thursday) and its new batteries are cheaper to make, quicker to charge and have a better range! In driverless cars, Waymo attracted outside investment for the first time (Tuesday) to the tune of $2.25bn. It’s the first time that someone other than parent company Alphabet has financed them

• Recent UK floods mean that food prices are likely to rise (Monday) as the rain just isn’t draining away fast enough for farmers to start spring planting
• Impossible Foods decided to cut wholesale prices by 15% (Wednesday) as the competition continues to hot up in the meatless market. When you’ve got giants like Nestlé, Cargill and Tyson Foods itching to take your business you are going to want to try to protect the gains you have already won. Impossible Foods is much smaller, which means that production costs are higher – but it is imperative that it at least defends what it already has

• In the “Themes for 2020” section, short-form video streamer Quibi, which specialises in video series that run for ten minutes or less per installment, has just completed a second round of financing worth $750m. This is in addition to the $1bn it has already raised one month before the product’s launch. This is interesting because it is new and different from all the rest! It will launch with over 50 shows and charge subscribers between $4.99 and $7.99 per month for access. In meat-alternatives, Impossible Foods announced that it would be cutting its wholesale prices by 15%. Given the intensifying competition from food giants, this is a necessary move IMO. In the “Country-by-country overview for 2020” section, Brazil decided to cut its growth estimates due to concerns that the coronavirus outbreak would hurt exports; South Africa fell into recession for the second time in two years as the figures from Statistics South Africa were even worse that the already pessimistic forecasts. Ramaphosa blamed power cuts, lack of business confidence and drought.

My favourite stories this week were the rather unusual Japan goes beyond gaming desks with the gaming bed (SoraNews24, Casey Baseel https://tinyurl.com/vpays3s) and the hilarious Mum brands kids’ book explaining reproduction ‘child-friendly kama sutra’ (The Mirror, Luke Matthews https://tinyurl.com/tyrovvf). 

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 week kicked off with the IMF’s Managing Director Kristalina Georgieva warning that the coronavirus would endanger a fragile global recovery (Monday) and the markets fell sharply as the week went on (Friday)
• In CHINA, the quality of data came into question (Wednesday) and President Xi is now under increasing pressure to decide whether to relax quarantine restrictions to help the economy and risk further spreading of the virus or to just stick to the current protocols. Chinese authorities are doling out “Force Majeure” certificates (Friday) allowing Chinese companies to break contracts with foreign firms, effectively gifting them a get-out clause. Overseas companies won’t like it but ultimately I think objections will fall on deaf ears
• In the US, Trump seems to be in denial about the coronavirus (Thursday) and said that it is “very much under control”, that a vaccine is close and that “the stock market is starting to look very good”. The problem is that Trump has cut funding to a number of groups that could help in controlling the outbreak, so if he is wrong the electorate may swing against him and effectively gift someone like Bernie Sanders the keys to the White House. However, Trump has appointed vice president Mike Pence to be in charge of the response to the coronavirus – so effectively he now has a ready-made fall-guy! If the coronavirus does not take hold in America, he can say “I told you so” – and if it all goes wrong he can blame it all on Mike Pence!
• Italy has had a tough week as its Northern cities have suffered from the outbreak. The Venice Carnival was closed down early, football fixtures and the 6 Nations rugby fixtures were also postponed. Italy’s economy is already suffering and it is trying to manage down expectations on budgets (Wednesday). The fact is it was already teetering on the edge of recession – but that looks like a near certainty now! You do wonder how much leeway Europe will give the Italians, though, because it’s not as if the rest of Europe is firing on all cylinders (look at Germany!)
• The UK says that the March 11th Budget will go ahead as planned (Wednesday) – but some of the key decisions may be booted later on into the year to wait until the dust settles
• Iran continued to face difficulties in terms of public distrust (Monday) as it became the country with the most coronavirus-related deaths after China (Tuesday). This could be very damaging for the region given that the effectiveness of governments and their their respective healthcare capabilities can vary from country to country
• Elsewhere in Asia, South Korea had to quarantine 7,000 soldiers (Tuesday) and Japan decided to shut all of its schools from Monday onwards (Friday)

• Revolut managed to raise $500m (Tuesday) in its latest funding round, which made it the most valuable fintech in Europe (Thursday)
• However, there were a lot of job losses announced elsewhere in the sector (Thursday) at Lloyds Bank, Virgin Money and Direct Line as the impact of changing consumer tastes continues to hit
• Klarna posted its first ever loss (Thursday) due to the cost of expansion and higher default rates

• Amazon opened its first cashierless supermarket this week (Wednesday) after the success of its Amazon Go format but a reporter managed to fool its technology (Friday). Still, Amazon is considering licensing out the technology, but I’m not sure how many takers it will have at this time
• Meatless alternatives came to the fore again this week as corporate giant Cargill announced its entry into the meatless market (Tuesday) and Beyond Meat announced it would be pouring more money into marketing (Friday) to combat criticism that its products are over-processed

• In the “Themes for 2020” section, music streaming continues to gain momentum as the latest report from the Recording Industry Association of America (RIAA) says that US recorded music sales increased by 13% last year. Streamers such as Spotify and Apple accounted for 80% of revenues last year in the US and they are now gaining ground on those at the peak of 1999, when CD sales represented 90% of overall revenues. In meat-alternatives, Cargill indicated that it is planning an April launch of meatless patties and other non-meat minced products made from soya and plant-based proteins. The competition is hotting up! In packaging, glassmakers are seeing an opportunity to regain ground that has been taken by plastics as a sustainable option. Arglass Yamamura is building a $123m facility in Georgia and is the US’s first new glass container factory in 12 years. Interestingly, glass is the only common packaging material that the FDA classifies as “generally recognised as safe” and makers are making concerted efforts to make it more recyclable. In the “Country-by-country overview for 2020” section, the government in Spain won an important parliamentary vote that backs its deficit proposals meaning that it is getting closer to approving a new budget. This is a major step forward for a country that has been in political deadlock for the last to years. The leftwing government wants to make higher earners pay more tax in order to finance increased spending; in Russia, there is going to be a nationwide vote on March 10th on Vladimir Putin’s proposed changes to the constitution – which also give him a backdoor way of extending his rule; in Japan, the ongoing spread of the coronavirus puts the Tokyo Olympics in jeopardy – and a final decision of whether they are to go ahead as planned will be made by the end of May; problems continue in Iran as dissatisfaction increases over the regime’s clumsy attempts to contain the coronavirus given that it is now the country with the most coronavirus deaths outside China; in South Africa, the government has announced plans to cut back on its public sector wage bill as part of a desperate effort to reduce the biggest ever fiscal deficit in the post-apartheid era. Finance minister Tito Mboweni, outlined plans to cut civil servant pay over the next three years. Moody’s is looking to downgrade the country to junk status next month. Eskom and South African Airways continue to suck up state spending. Over a third of South Africa’s state spending goes on wages.

My two favourite stories this week were the incredible Former Marine planks for over 8 hours, setting Guinness record (USA Today, Joel Shannon https://tinyurl.com/ufj3pe4) and the highly entertaining The 15 Greatest Movie Car Chases (Mental Floss, Matthew Jackson https://tinyurl.com/toeraoe)

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.

• Economists continue to be busy cutting GDP forecasts for China. Nomura believes that China’s Q1 GDP growth forecast will be its weakest since the Tianamen Square protests of 1989 (Tuesday). China has decided to try to ease financial pressure on property developers by allowing them to delay payments on land and taxes (Monday) and Chinese banks cut the one-year loan prime rate – a key lending rate used across China’s financial system – in order to ease lending conditions (Friday). I would have thought you will be seeing more of this as time goes on in order to mitigate the financial pain that many companies will be feeling
• Germany continues to struggle as Merkel faces increasing pressure to quit before her term ends in autumn next year (Wednesday) and the number of profit warnings from German companies hits new highs (Wednesday)
• There was a lot going on in the UK as well as it turns out that new Chancellor Rishi Sunak will be delivering the Budget on time on March 11th (Wednesday) and he faced more calls to reform (i.e. cut) stamp duty (Friday). UK inflation hit 1.8%, so it looks like there’ll be no need for the Bank of England to cut interest rates at the next meeting (Thursday).  UK immigration criteria changed to a points-based system (Thursday) so at the moment, it looks like social care, agriculture, retail and hospitality will have a particularly hard time if things stay as they are

• After having gone through a huge pig cull due to an outbreak of African swine fever, it seems that China is now having to face a huge chicken cull (Tuesday) because of two things. Firstly, there’s been a shortage of animal feed due to a lack of corn and soya beans, which means that as many as 30,000 chickens are dying of starvation per day. Secondly, the domestic shipment of live birds has become very restricted due to coronavirus cross-contamination concerns, which has led to older birds trampling chicks to death and burying them alive. The restriction on live chicken imports from the US has been lifted to make up for some of the shortfall, but I suspect that meat prices will continue to stay high for some time to come. Separately, I would have thought that now would be the time for “meatless” companies such as Beyond Meat and Impossible foods to make serious inroads into the Chinese market given the shortage of “real” meat
• Apple became the first US company to say it won’t hit first quarter revenue targets (Tuesday) due to the coronavirus impact (but I don’t think anyone will be very surprised by that). I suspect that there will be many more to follow.
• Airlines are going to take a big revenue hit (Friday) according to IATA while Maersk (Friday) and Jaguar Land Rover (Wednesday) also warned of negative impact. FWIW, I think that there could be an M&A bonanza when the coronavirus passes because there will be a lot of good (and probably smaller) companies who won’t have been able to take such a big financial hit from the coronavirus – meaning that larger companies with deeper pockets could pick up good quality smaller companies on the cheap
• On the other hand, companies that are doing quite well from the coronavirus include Slack, Zoom, Alibaba’s DingTalk and ByteDance’s Lark (Wednesday) who all make software that enables working from home. However, it’s not all work and no play – Smartphone users have downloaded record numbers of games and other apps since the spread of the outbreak (Friday). According to analytics provider AppAnnie, average weekly downloads for the first two weeks of February, shot up by 40% versus the average taken across the whole of 2019! Share prices of listed game-makers have shot up accordingly – Tencent’s share price is now at a 20-month high. Education apps have also done well as schools remain closed and shares in New Oriental Education, which provides online education in China, have shot up by 17% this year

• The European Commission put forward proposals to force big tech companies to make their data available to smaller rivals (Thursday). The document, entitled European Strategy for Data, pushes for more pooling of data. Whether users themselves will be all that keen is another question, however!
• Recent figures showed that the pace of customers abandoning traditional pay-TV packages accelerated by over 70% last year in the US (Thursday) as the number of cheaper streaming services continued to proliferate. Cable TV providers such as Comcast, Charter Communications and Altice lost around 1m pay-TV customers in 2019 while satellite providers did even worse as AT&T’s DirecTV lost 3.4m customers and Rival Dish Network lost 500,000. I would have thought this is going to continue for the next few years while they all offer low prices to attract new subscribers
• The cruise industry continues to suffer the longer the coronavirus continues (Thursday). Carnival Corp, Royal Caribbean and Norwegian Cruise Line are all suffering and will probably continue to do so. It will cost them a lot of money to get customers back onside in terms of PR, advertising and having to offer reduced prices for the short-to-medium term

• In the “Themes for 2020” section, cord-cutting accelerates in the US with figures showing cable and satellite TV companies losing subscribers. In the UK, BT has decided to to scrap its traditional pay-TV packages and let customers pay for prime content (e.g. Premier League football) on a monthly subscription – like the competition. In the “Country-by-country overview for 2020” section, Turkey has cut its interest rate for the sixth time in a row by 0.5% to 10.75% in a bid to stimulate the economy; in Germany, pressure continues to mount for Merkel to step down early as the search for a new CDU party leader begins in earnest

My two favourite stories this week were the hilarious Breastfeeding mum regrets fake-tanning every part of her body (Metro, Richard Hartley-Parkinson https://tinyurl.com/ro9mtdz) and the strangely compelling Cool automated Rubik’s cube found at Maker’s Faire floats, solves itself, blows our minds (SoraNews24, Dale Roll https://tinyurl.com/u8ls4ro).

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.

• President Trump announced his final budget before the November election (Tuesday). Basically, he wants more spending on defence and infrastructure and less spending on social welfare
• China’s inflation shot up from 4.5% in December to 5.4% in January (Tuesday), which isn’t really surprising considering that food prices have shot up by around 20% in the last 12 months due in large part to the African Swine Flu-induced pork shortage
• Eurostat was downbeat about the outlook for the Eurozone (Thursday) with particular weakness from Germany, France and Italy – the Eurozone’s biggest countries! It had looked like things were turning a corner on the manufacturing front but that will be out of the window  now given the effect of the coronavirus
• In France, Macron’s popularity is taking a dive (Thursday) as he continues his attempts to introduce difficult policies, Germany’s Annegret Kramp-Karrenbauer (AKK) shocked everyone by announcing that she’d be stepping down as leader of the CDU (Tuesday) and won’t be running for Germany’s Chancellor at the next election (she was Angela Merkel’s annointed successor). Britain’s Chancellor of the Exchequer Sajid Javid was replaced by Rishi Sunak (Friday) in a dramatic Cabinet reshuffle, so it is possible that the Budget could be postponed from March 11th – the original plan

• China encouraged factories to restart after the Lunar New Year holiday (Monday) but many are struggling with lack of workers and even when they are getting there, product is difficult to transports as there are massive delays on the roads, flights are very hard to come by and shipping is also heavily restricted
• There was a big spike in reported coronavirus cases (Friday) as Chinese authorities are now reporting confirmed cases “based on clinical diagnosis of symptoms” rather than confirming them “only after positive laboratory tests”
• Mobile phone production will take a big hit in the first quarter (Tuesday) as research by TrendForce forecasts that smartphone production will fall by 12% in the first quarter versus last year due to factory shutdowns and lack of workers
• Economists are saying that global growth could slow down in the first quarter for the first time since 2009 (Tuesday) as they all continue to trim their forecasts
• Trump could actually end up benefiting from the coronavirus (Friday) because although he managed to get a phase one deal with the Chinese, it’ll be the coronavirus that does what he actually set out to do – smash supply chains that are overly reliant on China

• Car makers continue to suffer as Daimler had its worst profits for ten years (Wednesday) due to rising legal and R&D costs. It already announced big job cuts last year but things aren’t improving. Nissan had its first quarterly loss in ten years (Friday) and it looks like it could get worse as this doesn’t take into account any coronavirus effects!
• Uber was dealt a blow as a judge upheld AB5 (Wednesday) despite its protests. This is all about the classification of workers as either employees (which means they get benefits etc.) or contractors (the current situation, where workers don’t get any benefits). The company argues that classifying them as employees will raise costs by 20%
• Tesla made more waves this week as it did a surprise $2bn fund raising (Friday) in order to take advantage of its incredibly strong share price performance particularly in the last six weeks. This came at the same time that the SEC announced another investigation into the company and that it was seeking “information concerning certain financial data and contracts including Tesla’s regular financing arrangements”

• In the “Preview of 2020” section, the Mobile World Congress in Barcelona has been cancelled (February 13th). Potential attendees who are concerned about whether the the World Banknote Summit will still be on will no doubt be on tenterhooks…In the “Themes for 2020” section, Nestlé this week (Friday 14th) announced that its plant-based alternative protein business – which is only a tiny part of the overall business – achieved double-digit organic sales growth via brands such as Garden Gourmet. It also announced the launch of a plant-based “tuna salad” – impressive because seafood alternatives have lagged those of their “meat” cousins. In the “Country-by-country overview for 2020” section, Germany‘s potential successor to Angela Merkel – Annegret Kramp-Karrenbauer – stepped down from the leadership of the CDU and said she would not stand for election as Chancellor, leaving the door open to other candidates; Italy‘s Salvini courts more controversy as he loses immunity and faces trial for blocking a migrant boat while in office (February 13th) and India‘s PM Narendra Modi suffered a big defeat in Delhi’s city election as his BJP party was thrashed by Arvind Kejriwal’s Aam Aadmi (Common Man aka “AAP”) party as divisions between the haves and have-nots widens

My absolute favourite story this week involved a little guy kicking the *ss of a big guy 👊 in The bigger they are… Smallest top sumo wrestler takes on yokozuna with amazing result (SoraNews24, Casey Baseel https://tinyurl.com/vrer2bu)! If you can’t see the video in the story, click on this to see it. Impressive!

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 doctor who initially raised the alarm over the coronavirus, Li Wenliang, died (Friday). He had initially been accused by Chinese authorities of “rumour-mongering” and they forced him to retract his statement, but unfortunately he was proved to be right after all. In the meantime, Hong Kong closed access to China (Tuesday) and travelers around the world faced more restrictions
• China poured £130bn into the market in order to stop a complete rout (Monday) on the first day of trading since the lunar new year holiday and although markets rallied on hopes of a vaccine (Thursday), oil prices fell (Tuesday) on fears that China demand would fall through the floor. OPEC’s advisory body, which met for three days this week in Vienna, recommended that oil production should be cut by a chunky 2.7m barrels a day for the first half of 2020 to avert prolonged major oil price weakness in the aftermath of the coronavirus. The OPEC+ alliance (which comprises of OPEC members plus another group, led by Russia) had already agreed to make cuts of 1.7m barrels per day for the first three months of this year, but clearly those plans were made pre-virus. Companies also examined their insurance policies (Monday) to see whether they were covered for epidemics
• Other than that, this exposed the reliance of supply chains on China (Tuesday) as car manufacturers and tech companies suffered in particular and some US and European car makers warned of plant closures (Wednesday) due to lack of China-made parts

• Tesla’s share price shot up (Wednesday) and fell off a cliff (Thursday) as investors continud to put their hopes in Elon Musk (and take profits). The Panasonic/Tesla joint venture became profitable (Tuesday) after six years of not being!
• It looks like it may be a good time to buy a hybrid (Monday) as manufacturers need to sell more of them to avoid EU fines on carbon emissions. Those most likely to fall short of these  include Mercedes-Benz, Renault, Fiat Chrysler and Jaguar Land Rover. Mind you, Boris Johnson brought forward the deadline for sales of petrol and diesel-powered cars from 2040 to 2035 (Wednesday) and – controversially – included hybrids. Online interest in electric vehicles increased as searches were up by 162% (Thursday) versus the average
• Elsewhere, there’s speculation that Nissan has an interesting hard Brexit plan (Monday). It is allegedly going to go completely against the flow and increase production in the UK and close its facilities in Barcelona and France in a move to increase its market share from 4% to 20%! The company has, however, denied the existence of such a plan – but it does sound quite interesting, no?

• Sports brands seem to be getting more powerful than retailers (Monday) as some of the big sports brands are tending to use their own websites and stores to distribute their product to the public in preference to traditional retailers. Talking about sportswear companies, Nike’s Vaporfly wonder-shoe got the thumbs up from World Athletics (Thursday) and it also got approval for the Air Zoom Alphafly, a prototype of which was the shoe used by Eliud Kipchoge to to beat the 2-hour marathon mark. All the other companies will be racing to provide their athletes with something similar (although that’s going to be difficult time-wise because they need to make the shoe available on the open market by April 30th to be eligible for use in the Olympics)
• Ghost kitchens are taking up empty retail space (Monday) as real estate is repurposed to adapt to changing consumer tastes
• More retailers announced stores announced closures this week. Macy’s said it would be cutting about 20% of its outlets over the next five years (Wednesday) in an effort to move with the times and Ikea said it would shut its Coventry store in the UK (Wednesday) as part of its overall plans to change its model from “big box” out-of-town stores to having smaller ones in city centres
• Spotify continued in its efforts to broaden its offering (Thursday) buy buying another podcast specialist, The Ringer, for an undisclosed sum. This follows on from last year’s purchases of Gimlet and Anchor, as Spotify wants to attract more and retain existing users in the face of continued competition from Apple and Amazon’s music apps
• The latest stats from Kantar show some interesting trends as sales of no-alcohol and low-alcohol beer surged by 37% in January (Wednesday), with demand for adult soft drinks rose by 3%. Euromonitor analysts have pointed out that UK sales of no-alcohol and low-alcohol beer have doubled over the last four years. On the food front, Veganuary has also grown in popularity and helped sales of meat substitutes like soya mince and veggie burgers. The meatless revolution continues!

• In the “Country-by-country” section, in the US, the Senate acquitted President Trump over allegations that he pressured Ukraine into digging up dirt on a political opponent, effectively ending the process that has dragged on for the last few months. The two charges were on his abuse of power and the obstruction of Congress. Fun fact: Trump has become the first ever president to run for re-election having been impeached. In Russia, new PM Mikhail Mishustin has promised to bring in changes to the country’s 2020 budget to increase government spending by up to 10% in order to boost economic growth. In Brazil, Bolsonaro’s government said it will present a bill to Congress that would open up indigenous land to hydroelectric and mining projects, arguing that an opening up of the Amazon is key to tackling poverty. This will no doubt cause uproar both at home and abroad, but Bolsonaro argues that a lot of the currently protected land has a huge amount of mineral resources.In Turkey, President Erdogan has promised revenge on Syria following the death of eight Turkish soldiers and accused Russia (Syria’s most important ally) of turning a blind eye. Turkey’s relationship with Russia has been a tricky one given that they are on opposing sides in Syria, but they need Russia more than Russia needs Turkey, so they will probably sort things out. In the UK, Brexit has strengthened Scotland’s claim for independence on the one hand, but exposed its stark financial weaknesses on the other. Donald Tusk, former EC president, stirred things up by saying that Brussels would be keen for Scotland applying to join the EU but it isn’t a given and it’s also not clear as to whether the sums would actually add up, especially when you consider that Scottish exports to the rest of the UK are over triple those that go to the EU. In 2018, 60% of Scottish exports went to the rest of the UK, over 19% to the EU and over 20% to the rest of the world. Separation negotiations are likely to be highly complicated. Elsewhere, property prices continue to climb post last year’s General Election in a “Boris bounce”, especially in London…

My absolute favourite “alternative” story this week featured the seriously spooky talents of this South Korean lady: Makeup artist blends into backgrounds by painting mind-bending optical illusions onto her FACE (Daily Mail, https://tinyurl.com/qp6aomt). Mind-bendingly good!

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.

• China’s health commissioner, Ma Xiaowei, warned that the coronavirus may actually have spread more widely than originally thought (Monday) because it may be passed on by people who show no symptoms and President Xi Jinping promised to defeat it (Wednesday) saying that “We have complete confidence and ability to win this defensive battle against the epidemic”. Although China was praised in some quarters for being swifter to publicise the outbreak than it was with SARS, the mayor of Wuhan, Zhou Xianwang, said in an interview this week that he had to wait for authorisation before going public (Friday)! Markets wobbled on worries about the spread (Friday) while companies including Cathay Pacific and Starbucks curtailed Chinese operations (Wednesday). Foreign companies including Microsoft and Dell donated money to help the cause (Wednesday), although the amounts were dwarfed by Chinese donations and drug companies including AbbVie, Johnson & Johnnson and Gilead Sciences donated antiviral drugs (Tuesday) to see if they could help at all (a specific anti-coronavirus drug does not currently exist – but there’s hope that an existing treatment may be able to help). In the meantime, companies are struggling to keep up with demand for face masks (Friday)
• US GDP growth appears to be slowing down (Friday), Germany’s economy is still in a rut (Tuesday) but the European unemployment rate reached new lows (Friday) and the Bank of England left interest rates unchanged (Friday)

• The landscape for retailers continues to be tough. US restaurants and retailers continue to go out of business (Tuesday), UK retail job numbers continue to fall (Monday) along with retail sales (Wednesday). The retailer landlords are also suffering as Intu and Land Securities suffered falls in their property values (Thursday) as fellow landlord British Land predicted more carnage in the sector (Tuesday)
• With the retailers themselves, Amazon had a great Christmas (Friday), Space NK had a good one but its investments in new stores upped costs (Monday), Reiss did well (Monday) but the struggling John Lewis decided to take some of the pressure off itself (Wednesday) by announcing that it would publish trade updates twice per year rather than on a weekly basis

• Apple had great results (Wednesday), mainly because the company benefited from strong sales of its iPhone 11, Samsung had disappointing results (Thursday) but also predicted that this would be the year that the chip market recovered from its current slump (something that rivals TSMC and Intel have also said) and Huawei managed to hang on to playing some part in Britain’s 5G rollout (Wednesday, Friday). On the other hand, Facebook unveiled its slowest ever revenue growth (Thursday) due to higher costs. This was despite user numbers on Facebook, Instagram, WhatsApp and Facebook Messenger reaching all-time highs and revenues from advertising shooting up by 25%

• In vehicle-related news, Tesla posted fourth-quarter profits on record deliveries (Thursday) and promised to boost sales by almost one third this year. Then there was the encouraging news that UPS ordered 20,000 vehicles from British electric-van maker Arrival (Thursday)
• Altria announced a big write-down of the valuation of its stake in Juul (Friday) heralding the latest development in the demise of vaping
• The Indian government decided to have another go at selling Air India (Tuesday), with the key difference this time being that they’re selling it ALL this time, rather than hanging onto a small stake
• In the UK, Amigo Holdings has been put up for sale (Tuesday)

• In the “Country-by-country” section, the UK leaves Europe, Marine Le Pen looks like she’s making a comeback as President Macron’s popularity suffers, Catalonia stirs things up again for Spain as it looks to hold early elections, Matteo Salvini fails in his bid to get back into power as Italy’s regional elections don’t go his way, India unveils an important new budget and Nigeria promises to do better in cracking down on corruption

This week’s “banter” section is, once again, mainly animal-focused! My favourite stories this week were And now, a spot of everyone’s favorite winter sport: Japanese cat curling (SoraNews24, Katy Kelly https://tinyurl.com/sagq86g) – which is hilarious as the cat seems to love it – and Dog rides bus to and from dog park every day to play for two hours by herself (The Mirror, Luke Matthews https://tinyurl.com/rpzrf7n) which shows brilliant independence and teamwork with the local community! I would also say that 2 Brothers Created a Stop-Motion Remake of Toy Story 3 Using Real Toys and People (Popsugar, Victoria Messina https://tinyurl.com/r9csxr7) is particularly impressive!

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.

• Sainsbury’s announced big management job cuts (Wednesday), which included that of chief exec Mike Coupe (Thursday) who was clearly the fall guy for the failed merger with Asda last year. Morrisons followed suit with more job cuts (Friday) while Aldi became the best payer of all the supermarkets (Wednesday)
• In fashion retailing, it turns out that Ted Baker’s accounting error is much bigger than initially thought (Thursday) but, on a brighter note, Asos had a decent Christmas (Friday), putting a tricky year that included two profit warnings behind it
• Elsewhere on the UK high street, Hotel Chocolat had a good Christmas (Friday), but warned that overseas expansion would cost more than expected

• On the commercial real estate front, and particularly in retail property, it turns out that US retail landlords are suffering like their UK counterparts (Tuesday) because high profile retailer failures are forcing them to make a difficult choice between rent reductions (which force down property values) and leaving spaces vacant (to preserve property values, at least for the short term). Sound familiar?? British retail property landlord Intu announced it was in talks to raise money from investors (Tuesday) but the £1bn figure being bandied around sounds rather low when you consider that it has £5bn in debt
• On the residential property side of things, Rightmove says that house prices have been going up since the UK general election (Monday), something that seems to be confirmed by the latest figures from estate agent Knight Frank (Tuesday) which show that the number of new buyers registered with it hit its highest level for mid-January for over 15 years!

• Daimler announced its announced its third profit warning in only nine months (Thursday), with profits almost 50% down on last year. Although Daimler, BMW and VW are still seeing rising sales, they are making less in terms of profit and losing market share following a string of legal scandals, weaker global sales generally and the increased costs involved in developing EVs – plus, of course, increased competition in the “luxury” segment of EVs from the likes of Tesla etc.
• Tesla’s valuation breached the $100bn mark (Thursday) making it the world’s second most valuable carmaker (Toyota is #1). Breaching this barrier also triggers a potential $346m bonus for the founder if the company’s valuation can stay above $100bn on average for the next six months!

• The Marston’s pub and restaurant chain became the first in its industry to install electric car chargers across its entire estate (Monday). Although I like the idea in the short term because of the lack of infrastructure, I think that there will be limited benefit longer term as EV batteries become more efficient in terms of faster charging times and charge retention
• BAE Systems bought the Military Global Positioning Systems business from United Technologies for $1.93bn (Tuesday) in its biggest acquisition for over ten years. It added that it was also going to buy Raytheon’s Airborne Tactical Radios business for $275m. It looks like United and Raytheon made these disposals in anticipation of their own merger that they announced last year
• Fevertree shocked everyone with a profit warning (Tuesday) after a poor Christmas. I wonder whether we have reached “peak gin”. If so, the company will have to rely even more on overseas expansion for future growth
• Just Eat and Takeaway.com got a nasty surprise (Friday) as the UK’s Competition and Markets Authority decided right at the last minute to investigate their proposed £10bn merger
• The coronavirus outbreak spooked markets (Friday) but things are getting worse as time goes on with more deaths being reported as it continues to spread around the US, Europe and Asia. China has now shut down 10 cities around Wuhan and put major restrictions on transportation. Researchers at the University of Queensland in Australia think they can have a vaccine in six months. It is one of three teams being funded by the Coalition for Epidemic Preparedness Innovations, which is a global non-profit that develops vaccines against new infectious diseases. The two other teams are Inovio Pharmaceuticals (which is listed on NASDAQ) and Moderna

• In the “Cars” section of “Themes for 2020”: Subaru whinged about poor EV sales in America, with the company’s chief exec complaining that “the only EVs that are selling well are from Tesla”. It seems that early adopters are also very patriotic! The US accounts for 2/3 of its global sales, so it’s obviously a pain for the company.
• In the “Country-by-country” section, Russian president Putin approved a cabinet reshuffle by his new PM Mikhail Mishustin who is basically bringing his mates in as deputies. A slew of “national projects” is expected to be announced to spark life back into the economy. Italy is facing more potential turmoil as the anti-immigration Matteo Salvini (leader of the right-wing League party) continues to try to destabilise the current coalition government going into the regional elections. It looks like he’s trying to turn this vote into a referendum on the coalition. This is his latest attempt at rocking the boat as Salvini tried to call national elections in summer 2019 only to be thwarted by the unlikely alliance between his “ex” coaltion partner Five Star and the Democratic Party (PD). Luigi Di Maio, leader of Five Star stepped down following in-fighting within his party who don’t like being in a coalition with the PD. Vietnam‘s #1 telecoms company, Viettel, announced 5G rollout from June this year. Meanwhile, state-owned South African Airways has started to suspend flights as there was a delay in a vital government bailout

This week’s “banter” section is very animal-focused! My favourite stories this week were Bunny in a bow tie is living her best life as she flies first class with owner (The Mirror, Courtney Pochin https://tinyurl.com/rkkcgsj) and Adorable ‘Disney’ dog has people questioning if she’s real – because of her eyes (The Mirror, Courtney Pochin, https://tinyurl.com/qu9pg22). Ahhhhhhh!

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.

• There was relief all round as the US and China signed a “phase one” trade deal (Thursday), but there are still tariffs on $360bn-worth of Chinese goods and stickier issues of intellectual property and state subsidies to be overcome for a full trade deal. This’ll do for now…
• China announced a slowdown in its GDP growth rate (Friday) to 6.1%. Although this is its slowest growth rate for almost 30 years, it’s still within the range of 6-6.5% forecast by the government. Reasons cited for the slowdown included impact from the US-China trade war, a continued clampdown on debt, slower income growth and rising food price inflation stemming from the African swine fever outbreak denting purchasing power. The government does, however, expect a turnaround in sentiment in 2020
• Vladimir Putin announced a major reshuffle in his government (Thursday) as his whole cabinet (including Prime Minister Dmitry Medvedev) resigned to make way for sweeping constitutional changes. Vlad has been suffering in the polls and probably felt he needed to do something drastic to at least arrest the slide for the time being
• Turkey announced its fifth interest rate cut in a row (Friday) in order to stimulate the economy. What’s weird here is that when inflation is high (Turkey’s inflation rate now stands at 11.9%), pretty much every other central bank would cut interest rates in order to encourage saving over spending. President Erdogan believes that the opposite is the case…

• Gap decided on a major strategy U-turn (Friday) as it said it would NOT split itself in two after all. The strategy, announced about a year ago, was to split Gap (with a few of its smaller brands) and sub-brand Old Navy into two separately quoted entities. Since then, business have worsened for both sides, top management has “stepped down” and it was thought that going through this at such a sensitive time would be too difficult
• Amazon’s Jeff Bezos announced that he’d be investing $1bn in his India business (Thursday) to digitise small and medium businesses in the country, putting him head-to-head with local hero Mukesh Ambani, head of Reliance Industries, who will be flying the domestic flag via his new venture JioMart
• Shopper numbers fell on the UK high street(Monday) according to data from Springboard due to a combination of higher business rates, increasingly thrifty customers, relentless online competition and heavy discounting on Black Friday/Cyber Monday cannibalising Christmas sales. I would suggest that having a general election in December may well have had an effect as well as there was a general air of uncertainty in the lead-up
• In the UK, Boohoo.com announced strong numbers (Wednesday) and the company is now worth more than M&S which probably shows you how far Boohoo has come and how far M&S has fallen! Northern upmarket supermarket Booths had a good Christmas (Thursday) and Revolution Bars toasted its seventh consecutive record-breaking Christmas (Thursday). The latter seems to back the theory that consumers are spending more on experiences than “things”, as Mitchells & Butlers found out recently.

• China cars sales fell for the second year in a row (Tuesday), which is disappointing given that it’s the world’s biggest car market. This was blamed on a slowing economy, US-China trade tension and a rise in secondhand car sales. EV sales were also down due to cuts in government subsidies. On the plus side, European car sales were up (Friday)
• Tesla’s valuation neared the $100bn valuation mark (Wednesday), a level that will trigger a humungous package of bonuses for founder Elon Musk
• There was also some interesting news at the end of the week (after Watson’s Daily was published) that Foxconn Technology Group is entering into a joint venture with Fiat Chrysler to assemble electric cars. Foxconn has, up until now, been Apple’s leading assembler of phones but it is seeking to diversify its business. The venture will develop and build EVs in China and run networks of connected wireless vehicles

• It was generally a good week for American banks with Citi and JP Morgan among those doing well (Wednesday) although Goldman Sachs suffered (Thursday) because it had to put money aside for fines. Visa bought Plaid for $5.3bn (Tuesday) to help broaden its access to fintech firms and its reach outside cards
• The UK government rescued Flybe (Wednesday) which came in for major criticism from IAG and Ryanair heads for being deemed unfair

• In the “Consumer/less packaging” section of “Themes for 2020”: Asda has joined rivals including M&S, Tesco’s and Sainsbury’s in launching a low-plastic “sustainable store” that will let customers in Leeds to fill up their own containers with certain items like coffee, rice, pasta, breakfast cereals and other items. It will also get rid of plastic packaging from mushroooms, cucumbers and flowers. Nestle has also made a commitment to spend £1.6bn on trying to replace plastic packaging with something more sustainable
• In the “Country-by-country” section, I will be putting in updates regarding the potential impact of Russian constitutional change, the rollercoaster of public opinion in Iran, the impact of the Taiwan election result and Argentina’s record high inflation

My favourite “alternative” story of the week this week was, without a doubt Gymnast’s viral challenge sounds easy – but no one understands how it’s possible (The Mirror, Luke Matthews https://tinyurl.com/wh7q7c9). Incredible!

This is an amalgamation of the “best bits” of the daily weekday newsletter/blog woven together to form a concise and coherent view on the things that matter in the commercial and economic news of the week. 

THE 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.

• There was a lot of fallout and aggressive rhetoric from both the US and Iran regarding the US bombing of Iranian commander Qassem Soleimani (Monday, Tuesday), followed up by Iranian’s missile attack on US bases in Iraq (Wednesday) and then Trump tried to de-escalate the situation (Thursday). The edge was taken off Iranian fighting talk, though, as they admitted to “accidentally” shooting down a Ukranian passenger plane, killing everyone aboard. They admitted this only a few days after flatly denying it
• Pedro Sánchez became Spain’s Prime Minister at last (Wednesday) after winning a parliamentary vote by a paper-thin margin (Monday). Getting anything done, however, will become a very tall order given he had to rely on the support of parties that he’s not normally that keen on
• Venezuela took another turn to the ridiculous as the “official” president, Nicolás Maduro stopped the “rightful” president, Juan Guaidó in a vote for the leader of the National Assembly (Tuesday) although many countries continue to recognise Guaido as the true leader (Wednesday) despite all this. The farce continues…
• India cut its official GDP growth forecast to 5% (Thursday), its slowest pace in over a decade due to weakening private consumption, industrial activity and investment. The government is trying to counter this with corporate tax cuts and more infrastructure projects, but these measures will take a while to feed through

• Supermarkets didn’t have a great Christmas (Wednesday) although Aldi and Ocado actually did quite well
• John Lewis shocked with a profit warning (Friday) with departures leaving a huge leadership vacuum for the new incoming chairman, Dame Sharon White, to deal with. White is highly regarded but has zero retail experience, so things are bound to get quite interesting over the course of 2020 and beyond. M&S suffered from the overstocking of certain items (Friday), which hit profit margins, but Selfridges actually did quite well (Friday) by surfing the meatless wave with vegan hampers and confectionary and Fortnum & Mason had a good Christmas (Friday) helped by sales of its hand-carved smoked salmon, champagne and non-alcoholic sparkling tea
• A couple of high street retailers are currently considering their futures as Boots didn’t deny rumours that its owner would be taking it private (Thursday) while Ted Baker brought in FTI consulting (Thursday) to do a business review following its disastrous performance
• I highlighted a few interesting retail trends this week – and even learned some new words! Clothing retailers – especially online ones – are suffering (Monday) from “bracketing” (where customers order three items – one which they think will fit and the size either side of that) and “wardrobing” (where customers buy the clothes, use them and then return them for a refund) and are trying to stamp it out because it is playing havoc with sales figures and inflating costs massively as customers abuse the option of free returns. I thought it was interesting to note that the world’s biggest warehouse operator, Prologis, bought a North London retail park from investor M&G to turn it into a warehouse space (Tuesday). It’s thought that this is the first time this kind of thing has happened, but I think there will be more of these deals in the future as landlords race to cut their exposure to retail property. On the subject of landlords selling off retail property, Ikea announced the purchase of a shopping mall in London (Friday) as part of its plans to have smaller shops in more central locations. There will no doubt be more of this from Ikea as they now have a special team dedicated to hoovering up retail space which is currently going cheaply as it is a buyers’ market at the moment. FWIW, I think that Ikea could potentially be an ideal buyer for some of the centrally located department stores that are being sold off at the moment…
• IN OTHER NEWS OVER THE WEEKEND, It seems that there’s actually another retail trend gathering pace at the moment – and that’s dodgy accounting! Joules announced a profit warning at the end of the week that shocked everyone because, up until then, it has been one of the rare shining lights of the high street! The company admitted that a shortage of stock for online orders had been caused by “a wrong number incorrectly entered into a spreadsheet”. Chief exec Nick Jones said that the problem had been sorted out but profits would be “significantly below market expectations”. The share price plummeted by 25% (but then again, if everything else is going OK, you do wonder whether some investors will see this as a buying opportunity). Staying on fashion retailers, it appears that Superdry had a rubbish Christmas due to rivals’ discounting and warned that its profits could be wiped out as a result in an unscheduled trading statement. Ouch.

• Tesla started to deliver Shanghai-made Model 3 cars this week (Wednesday) to great fanfare and announced plans to make the upcoming Model Y there as well
• There was some interesting news on raw materials for batteries as efforts to reduce reliance on cobalt continues (Monday) and falling lithium prices hit lithium producer Livent (Thursday). Meanwhile I saw that palladium prices are going through the roof as demand for catalytic converters (which contain the metal) continue to rise. Prices have surged by a whopping 25% since October alone – which has resulted in a major rise in thefts of catalytic converters from cars as palladium is now worth more than gold! Some drivers are being advised to prevent theft by buying a “Catloc” device which prevents the converter from being cut out!
• There were contrasting fortunes for luxury vehicles as Rolls-Royce benefited from sales of its hideous SUV (Wednesday) while Aston Martin announced its second profit warning in 12 months (Wednesday). What a disaster that IPO was!

• Beyond Meat got closer to seizing a McOpportunity (Thursday) as rival Impossible Foods dropped out of the bidding to supply McDonald’s with a vegan burger. Impossible Foods already supplies Burger King, but the chief exec said that the company just doesn’t have enough capacity to up production

• In the “Consumer” section of “Themes for 2020”: Meat alternatives continue to see strong demand as evidenced by the success of Selfridge’s vegan hampers (Friday), the size of McDonald’s demand for vegan burgers (Thursday, which scared off Impossible Foods) and the ongoing change in the global market for meat since the African swine fever outbreak (Friday). So far the culling of pigs affected by the disease has reduced their number in China by about 40% (around 100 million 😱), which led to pork prices shooting up to record highs and prices of beef and chicken going higher as consumers ate them instead. China’s meat imports were up by 63% in the first 11 months of 2019 versus the previous year and suppliers have struggled to keep up with demand. Brazilian, European and Australian producers have been diverting a lot of their product to China meaning that other markets such as Japan, Indonesia, Canada and the Philippines have lost out. Swine fever has now spread to Vietnam, the Philippines, South Korea and Mongolia with recent outbreaks in Serbia and Slovakia. In the UK, pork producer prices have risen by 12% but suppliers and retailers haven’t yet passed this on to customers. Surely this is going to happen during the course of 2020…

My favourite “alternative” story of the week this week was Woman uses asparagus to predict Trump will win election but will be impeached (Metro, James Hockaday https://tinyurl.com/yjoeynry). Superb work!