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.

• China’s economy continues to do well (Monday) as factory activity is at the highest level it’s been for three years and there was a hike in new export orders. Also, Chinese consumer spending was also up (as we saw recently by the ongoing success of Singles Day) – so it all appears to be going well!
• Investors have been putting record amounts of money into the markets (Monday) – so much so that the FTSE100 put in its best performance for 30 years (Tuesday)! Investors have been buying into value stocks (currently travel, leisure etc.) rather than growth but some traders are saying that there will be a dip going into the end of the year as funds rebalance and reduce their “over”-exposure to equities (Tuesday)
• Bitcoin hit new highs again this week (Tuesday), nudging the $20,000 mark
• OPEC decided to increase production (Friday) after much squabbling. They (and the non-OPEC group led by Russia) are only increasing production by 500,000 barrels a day and they will be monitoring it every month – so it’s not the ringing endorsement of the global economy that some are making it out to be

• This week saw the Pfizer/BioNTech vaccine candidate approved in the UK (Wednesday) and it will be rolled out next week. It’s likely that it won’t make as much as Moderna’s candidate (Thursday), because it doesn’t have to share the spoils, but it will probably make more than the AstraZeneca/Oxford University candidate because these guys said they’d make it at cost. Interestingly, both Pfizer and Moderna’s respective share prices rose by about 20% this week
• A number of behaviours brought about by the coronavirus came to the fore this week. Esports have become more popular under lockdown (Monday) with Twitch, unsurprisingly, reporting a huge rise in watchers, Zoom announced stellar results (Tuesday) as it continues to benefit from the working from home trend but clearly the main danger is Microsoft’s Teams (Wednesday). We all know that we are shopping more online these days but it’s getting so ridiculous that UPS is putting limits on client volumes in America (Thursday) – and we’ve not even got to Christmas yet! The National Retail Federation said that online shopping increased by 44% over the last weekend…

• M&A activity in the UK is on the up (Monday) as bankers have got used to doing deals virtually, stock markets are rising and the advent of vaccines means that companies have slightly more visibility than before and can make some (tentative) plans
• On the one hand, S&P Global announced the purchase of IHS Markit (Tuesday) in a deal worth $44bn as data providers continue to get together. Salesforce announced the purchase of Slack (Wednesday) which, at $27.7bn, is its biggest ever
• However, on the other hand, G4S is continuing to fend off an unwelcome approach by GardaWorld (Thursday), UK estate agent Countrywide rejected a takeover approach from smaller rival Connells (Thursday) and is asking private equity firm Alchemy Partners to make another offer (their previous offer was rejected for being too low) and General Motors has decided to back out of its commitment to electric truck maker Nikola (Tuesday). GM had previously committed to buy 11% of Nikola, work on a joint pick-up project and share technology. However, given the roasting Nikola got from Hindenburg Research and subsequent debacle, it is hardly surprising that GM decided to pretty much pull out (it’s still going to share tech for now – apparently)

• Arcadia collapsed (Tuesday) and a fire sale of its assets is going on (Friday), but it seems to me that none of the potential buyers will be interested in its shops – just the brands (although this could obviously change). Arcadia’s collapse was the last straw in the bidding for Debenhams – so JD Sports pulled out (Wednesday), leading to a frenzy of customers baying for a bargain as Debenhams started to sell off stock

• The UK unexpectedly brought forward the ban on the installation of Huawei 5G equipment from 2027 to September 2021 (Monday), which will no doubt throw a spanner in the works for a timely 5G rollout. This is clearly handing even more opportunity to Huawei alternatives Nokia, Eriksson and, increasingly, Samsung
• Warner Bros made a dramatic announcement that its 2021 movie releases will be released at cinemas and for streaming at the same time (Friday). This is an incredible development that could change the way we see movies in future IMO. This follows on from recent agreements between Universal, AMC Entertainment and Cinemark to shorten the gap between cinema and streaming release. It’ll be interesting to see whether this is something that lasts or whether we’ll slide back into having more of a gap

• Watson’s Yearly updates: watch this space!

My favourite “alternative” stories this week were the shocking revelations in Man counts up contents of Quality Street tin and leaves people absolutely fuming (The Mirror, Luke Matthews) and the challenge in CIA challenges people to tell what time it is in deceiving snap – see if you pass (The Mirror, Paige Holland). Have you got what it takes to join the CIA??

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.

• Catering giant Compass said that it is changing its business model to take into account more people working from home (Wednesday) and so it will be shifting its focus to schools, hospitals and care homes (basically, anywhere that stays open during lockdown) and away from office canteens. I think that many businesses will have to take into account changing working patterns, incorporate that into their own business models and adapt accordingly
• So if we’re not going to the office, it follows that we are staying at home more. We are apparently buying more pets (Wednesday) and Pets at Home said that strong demand for pet supplies will mean that they should be able to meet their full year targets
• We’re also exercising at home – so much so that waiting lists for Peloton equipment are getting so bad that customers are cancelling orders (Wednesday) and buying equipment from competitors like Nordic Track, Nautilus and Echelon
• Not going out means that we initially bought fewer lottery tickets, but then Camelot saw a massive upswing in online uptake (Wednesday)
• …and not going out means that we are not commuting, which is why we are approaching the nationalisation of our railways (Monday) as the government has asked Network Rail to put together a 30-year strategy plan – and there’s not much the likes of Arriva, FirstGroup and Go-Ahead can do about it because lockdown has crippled them financially, so they are going to have to do what they are told
• …and no commuting means that we are seeing fewer car accidents (Monday) which is great for car insurers such as Aviva, Direct Line and Churchill etc.
• IN OTHER CORONAVIRUS TRENDS, companies are (or at least thinking about) reshoring production (Monday) as the Coronavirus and Brexit have exposed risks to current supply chains. Meanwhile, in the US, propane demand has shot up (Monday) as people and businesses have been buying patio heaters!

• Global retailers like Abercrombie & Fitch are having problems because of the lack of tourist traffic (Wednesday). In fact, A&F are going to close a number of overseas outlets including London and Paris, but then again they’ve not been doing well for quite some time now. Tiffany is also having difficulties for the same reasons but China sales have shot up by about 70% over the quarter (Wednesday), which is a big help – and will no doubt be music to the ears of its new owner, LVMH!
• Electric goods retailers are doing pretty well. Best Buy has seen strong sales but sounds somewhat cautious over the outlook (Wednesday), saying that current growth rates may be unsustainable. In the UK, AO World had a stellar performance (Wednesday) and is experimenting with a join venture with Tesco via small in-store concessions
• Sainsbury’s announced that it was exiting the financial services business (Monday), closing a chapter that started with some fanfare in the wake of the financial crisis

• The week started off quite positively for AstraZeneca and news about its vaccine candidate (Tuesday) but as the week wore on, there was increasing scepticism surrounding the data demonstrating its efficacy (Thursday)
• Russia, in the meantime, boasted about the superior efficacy of its coronavirus vaccine candidate, Sputnik V (Wednesday)

• India banned 43 more Chinese apps, including AliExpress (Wednesday). This is in addition to the 200-odd it banned in June after India-China relations soured due to Chinese soldiers killing 20 Indian soldiers on the Himalayan border
• France announced it would be introducing a new digital tax on Big Tech (Thursday), which will probably result in retaliatory 25% taxes on £1.3bn worth of French handbags and make-up. FWIW, I think this is a shot over the bows to get Biden to the negotiation tables quicker
• Facebook miscalculated the effectiveness of their ads (Thursday), which will be very annoying for their customers but will also fuel critics who will argue that Facebook is too powerful and has access to too much data. Talking of which, calls are increasing for an overhaul of section 230 of the Communications Decency Act (Friday) – the law that has governed social media and other internet businesses for the last 24 years and gives them broad immunity for user-generated content. Critics say that this has resulted, over the years, in companies being allowed to ignore the spread of false and dangerous information. In another interesting and related development, the UK has announced that there will be a new tech regulator sitting within the CMA whose sole focus will be tech (Friday)
• It sounds like Salesforce might buy Slack (Thursday). I think that this could be a great combination of companies that have great and intuitive software. If this went ahead, Salesforce would get to broaden its product range and Slack would get really useful access to Salesforce’s customer base

• This week was also notable for the big moves in Bitcoin, as it fell sharply going into the end of the week (Friday). All eyes will be on the cryptocurrency to see whether we are going to see a replay of the same time period three years ago! It does, however, appear to be on the way to the mainstream at the moment…
• News came out at the end of the week that retail group Arcadia – whose brands include Topshop, Burton and Wallis – is close to entering into administration. This will put over 13,000 jobs at risk in the group owned by Sir Philip Green. What a fall from grace from the man who bought BHS and tried to take over M&S on two occasions! Arcadia was the UK’s fourth biggest clothing retailer only five years ago – but now look at it!

• Watson’s Yearly updates: watch this space!

My favourite “alternative” story of the week was Dad hilariously dances in daughter’s video – unaware it’s being sent to teacher (The Mirror, Luke Matthews). Nice moves, dad!

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.

• 15 Asian countries signed the Regional Comprehensive Economic Partnership (Monday) putting China in the driving seat in the region in terms of influence. The deal means that 90% of tariffs between members will be cut and will potentially give smaller Asian countries better bargaining power against the Europeans and Americans, for instance. Remember, they were all ready to sign up to the Trans-Pacific Partnership (TPP) a few years back and when Trump got to power he pulled America out. It’ll be interesting to see what Biden’s take will be on all this
• Japan’s economy rebounded by 5% in Q3 (Monday), bringing its rebound roughly in line with other developed economies. A stimulus package is widely expected
• UK inflation rose in the UK according to the latest figures from the Office for National Statistics (Thursday) but it is still way short of the Bank of England’s 2% target, so no need to get particularly excited. It was up mainly due to higher clothing and secondhand car prices. Having said that, consumer confidence was at its weakest level for six months (Friday), although the data didn’t take into account the feelgood brought by all the vaccine news
• Bitcoin hit new highs (Wednesday) this week. It could be a result of increasing belief among investors that it is edging closer to the mainstream, but there are opinions out there that suggest it could also be because of a bitcoin shortage as PayPal buys up available supply and Chinese authorities crack down on cryptocurrency exchange, putting Bitcoin miners under pressure

• Johnson & Johnson launched a UK trial of their Covid-19 vaccine (Monday)
• Moderna’s jab is looking pretty good (Tuesday) and it will be submitted for approval to the FDA and European Medicines Agency “in the coming weeks”
• Pfizer/BioNTech have now submitted their Covid-19 shot for emergency authorisation in the US on Friday and the company said that doses of the vaccine would be ready to ship within hours of authorisation, which could happen by the middle of next month 👍

• IN THE US – Retail sales rose in October (Wednesday) but by a slower rate than previously. Walmart reflected a similar trend (Wednesday) but rival Target still seems to be going strong (Thursday). On a separate note, Walmart sold down its interest in Japan (Tuesday) as part of its international strategy of ditching presence in mature markets and upping focus on growth markets
• IN THE UK – UK shoppers are spending (Wednesday) as people seem to be stocking up early. Asda reported strong sales of frozen turkeys, Christmas trees, puddings and mince pies while Halfords reported continued strength in bike sales (Thursday). However, it’s not all great as Arcadia is seeking a loan (Monday) and All Bar One owner Mitchells & Butlers is cutting venues (Monday) while 20% of companies have frozen wages. Frasers Group has built up a sizeable stake in Mulberry (Friday) as Mike Ashley continues his efforts to build more luxury into his brand

• Tesla found that it got approval to enter the S&P 500 (Tuesday) which Tesla fans will no doubt see as a vindication of Musk’s strategy and drive
• Chinese EV manufacturer Nio saw its sales rise by a whopping 146% in the latest quarter (Wednesday) as investors are increasingly hopeful that it will be able to meet its aggressive sales targets
• Panasonic is looking at expanding battery manufacturing in Europe (Thursday)
• British electric van and bus maker Arrival will be listing in New York (Thursday) thanks to a SPAC deal

• Apple relented on its 30% App Store fees (Thursday) for developers who get less than $1m annual revenues from their apps. Some of the bigger developers will probably say this is cynical attempt to fragment pressure against them – and I think they are probably right! The saga continues…
• Cinemark signed a major deal with Universal Pictures (Tuesday) to allow movies to stream way earlier in the cycle than they are now. I think that if this catches on it will change the way we watch movies forever

• Watson’s Yearly updates: watch this space!

My favourite “alternative” story of the week by far was this one: ‘Genius’ dog figures out how to steal treats without its owner ever knowing (The Mirror, Luke Matthews). What a clever dog!

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.

• So Donald Trump was in a bit of a huff this week as Joe Biden appeared to beat him to the White House and said he’d go to court to dispute the result (Monday)
• The EU started to impose $4bn-worth of tariffs on US goods (Tuesday) following the WTO’s latest decision in the 16-year transatlantic legal spat between Airbus and Boeing as each side has taken turns accusing the other of getting too much state help. I wonder whether the EU is doing this to poke Biden and get him to the negotiation table when he takes office in January
• Then our very own BoJo introduced new takeover rules (Wednesday) designed to protect certain key sectors from foreign takeover – but it’s really all about China (and probably the sovereign wealth funds of oil-rich countries). This brings us in line with many other countries who have gone all protectionist since lockdown started

• Markets shot up on news that Pfizer/BioNTech have a decent coronavirus vaccine candidate (Tuesday) and previously bombed out sectors like airlines, office landlords and events companies saw their share prices shoot up while previous winners, including Big Tech, lost ground. Volumes got so frenzied on the markets that trading websites including those of Hargreaves Lansdown, AJ Bell and Fidelity crashed (Tuesday)!
• There are other vaccine candidates out there including those from Moderna, AstraZeneca/Oxford University and Sanofi/GSK (Wednesday) but there are still hurdles to overcome before the authorities give them the all-clear (Thursday) including those involving production (social distancing employees?), transportation (Pfizer’s drug has to be stored below -70ºC) and distribution (can they get the vaccines out fast enough and who are they going to prioritise?). A lot of the safety stats of these drug candidates are due out in the coming weeks

• As I said above, Big Tech stocks got sold off (Wednesday) as investors crystallised gains but I think that they will bounce back as the drivers that got them to ever-increasing heights are still there (working from home etc.)
• It was particularly interesting to see China clamping down on tech companies (Wednesday) as the State Administration for Market Regulation is currently looking to bring in rules that define – for the first time – what anti-competitive behaviour is. It is in a period of “discussion” about this at the moment that will conclude at the end of this month but share prices of Alibaba, Tencent, JD.com, Xiaomi and Meituan were all weaker as investors worried about the potentially massive impact. The sheer size and strength of Alibaba was evidenced in yet another record-breaking day of takings on Singles Day (Thursday) as it saw $75.1bn-worth of sales in just one day!
• TikTok challenged the White House, saying that its constitutional rights had been violated (Thursday) and it won a delay to Trump’s original deadline (Friday)
• The EU took on Amazon (Wednesday) regarding allegations that it is using data to compete unfairly with third party vendors on its website. Let’s hope Vestager wins this time because after the bloody nose Apple gave her a few months back, she needs a win otherwise both she and the European are toast IMO
• Spotify bought Megaphone for $235m (Wednesday) in the latest of a string of podcast-related acquisitions

• The Chinese consumer is spending on European luxury goods (Monday), which is great news for some, but it seems that Burberry isn’t getting the benefit at the moment (Friday) and it is currently fighting to keep the VAT relief thing going – not surprising when you consider that two-thirds of their customers in the UK are tourists
• British retailers are getting nervous about Christmas (Thursday) because online demand is going through the roof right now to the extent that shops are having to send stock back to warehouses so they can fulfil online orders

• Watson’s Yearly updates: watch this space!

My favourite “alternative” stories were the one about the apologetic tooth fairy in Mum forgets tooth fairy visit but saves the day with clever note (The Mirror, Paige Holland) and the highly controversial Pigs in blankets cheesecake is driving people wild as it’s ‘so wrong it’s right’ (The Mirror, Courtney Pochin). What do you think??

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

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• We were treated to the sheer mind-boggling tediousness that is the US presidential election this week and it looks like Biden is going to win (Friday), although Trump will be kicking and screaming all the way to Trump Towers as he threatens to go through the courts, disputing the validity of the result in some swing states. In the meantime, a Biden win without a majority in the upper house is likely to result in a toothless leader unable to push through any drastic policies. Big Tech share prices were the first to rise on hopes they would be largely left alone as a result, but the rise became broader based (Friday) with banks and industrials joining them
• Fears are increasing about the prospect of a double-dip recession (Thursday) but Sunak and the Bank of England rode to the “rescue” (Friday) with a furlough extension and big stimulus respectively. Critics will say that this is just delaying the inevitable mass unemployment a sudden end to furlough would bring, but there is clearly a human (or PR, if you are being cynical!) aspect at work here as well. The news came on the day all of the UK went on lockdown for a month

• In ONLINE retail – Chinese e-tailer behemoth Alibaba said it was looking to invest $300m in British luxury apparel retailer Farfetch (Tuesday). This would be good for Alibaba as it would broaden its product range and good for loss-making Farfetch given that it is looking for better access to a potentially lucrative Chinese market. Ocado upped its full year forecasts by 50% (Tuesday) and bought two robot machinery companies to enhance its “robotic manipulation capabilities”. Mind you, there is a cloud hanging over this company in the form of a legal action being taken by AutoStore (Friday), so this is a story that we need to continue to follow!
• In OFFLINE retail – British retailers opened for as long as they could (Wednesday) before Lockdown 2.0 started and footfall increased 19% versus the previous week (Thursday) as shoppers had a final flourish. Footfall is expected to fall by 62% year-on-year (Monday) through to Boxing Day because of the lockdown. Ikea says it’s learned from original lockdown and is ready for this one (Wednesday) but Mike Ashley pulled out of the bidding to buy Debenhams (Thursday) although I still wouldn’t put it past him to pick up some bargains when it (potentially) gets liquidated

• Ant Group’s IPO got canned (Wednesday) and won’t go ahead until Ant Group complies with new capital requirements that came into force for financial companies from November 1st. It will have to hand back money to investors (Thursday). This looks like punishment for Jack Ma getting too mouthy and it could be a while before the IPO comes back (Friday)
• There is potentially a massive fly in the ointment for the proposed Nvidia purchase of Arm Holdings (Wednesday) as a disgruntled ex-head of Arm Holdings in China apparently controls 17% of the shares via an investment fund 😱! This sounds dodgy as!

• Uber and Lyft celebrated a huge victory (Thursday) as their workers are now classified as contractors (cheap, don’t have to pay benefits) and not employees (more expensive, have to shell out for things like sick pay etc.). They campaigned for a vote – that they won this week – which gets around the Californian court judgement that classified workers as employees. This isn’t going to be the end of the battle and could set a precedent for other states (Friday)…

• Watson’s Yearly updates: watch this space!

My favourite “alternative” stories were the cautionary Gross images show why you should always close the toilet lid when you flush (The Mirror, Luke Matthews) and the hilariously named confection in Marks & Spencer accused of “ruining Christmas” with suggestive festive doughnut (The Mirror, Rosaleen Fenton). I actually went to M&S this morning and bought a pair of these yumnuts, but I can’t tell you what they tasted like because my two boys scoffed the lot! They are excellent, apparently…

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 US economy bounced back with very strong GDP growth for the latest quarter (Friday), according to official figures. This is a gift for Trump as he needs to change the conversation from covid in order to stand any chance of re-election. Weirdly, fears of civil unrest surrounding the election prompted Walmart to take guns and ammo off displays (Friday) 😱
• Markets were weaker as France and Germany were among the countries to impose tighter lockdown restrictions (Thursday) in order to contain the spread of a potential second wave. It is looking increasingly likely that there will be a much tighter lockdown in England coming up
• Tensions increased between India and China this week (Thursday) as India plonked one of its warships in the disputed waters of the South China Sea. India seems to have swung from China-appeaser to being more China-wary since Chinese soldiers killed 20 Indian soldiers on the Himalayan border a few months ago. This could potentially have repercussions on the way business is conducted between the two neighbours

• Ant Group announced plans to raise $34bn in an IPO (Tuesday) that will give the company an implied valuation of about $313bn – roughly the same as the more venerable JP Morgan Chase. I would have thought the listing in Hong Kong and Shanghai will be very popular and could give the whole IPO market (especially in Asia) a boost. Elsewhere, there was also speculation that Airbnb would list by the end of the year on the Nasdaq (Wednesday). It is expected to raise $3bn giving the company a valuation of over $30bn
• In M&A action, AMD announced plans to buy rival Xilinx for $35bn (Wednesday) as consolidation among chipmakers continues. Then LVMH and Tiffany resolved their differences (Thursday) and agreed to get together at a cheaper price than they’d planned back in November last year. At least they saved themselves for more legal bills! In the end, they agreed on $131.50 per Tiffany share versus the original price of $135. For every $1 reduction on the original price, LVMH would have saved $120m!

• Apple is, understandably, upping efforts to develop its own proprietary search engine (Thursday) given that its current agreement with Google could be vulnerable. The company even went as far as saying, later on in the week when it published its annual report, that it faces “material” financial risk for various reasons, including from lawsuits related to the excessive fees in its AppStore and its agreement with Google on search
• Facebook Gaming was announced as a new game streaming service (Tuesday) this week. It’s a bit late to the game streaming party and its offering is both limited in breadth and geography – but it is a step forward into what could prove to be a very interesting area. Elsewhere, Facebook’s ad revenues continued to be very strong (Friday). It just goes to show that the boycott didn’t really achieve anything (apart from boost revenues to rivals such as Snap and Pinterest, for instance)
• Sony announced sales targets for the forthcoming PS5 (Thursday) and raised its annual profits guidance. I am expecting massive demand for the PS5. With more lockdown in prospect and households looking to entertain themselves, I think it’s the right product at the perfect time!
• Microsoft had some impressive results (Wednesday) and it looks like the catalysts that have driven it so far are going to continue: PC demand from working from home, use of its 365 software and then there’s the new console coming up as well!
• TikTok announced an alliance with Shopify (Wednesday) to give it e-commerce capability. There is huge growth potential here when you consider that sales in social e-commerce in China (where it’s been for some time already) last year accounted for $253bn versus only $20bn over the same period in the US!
• Pinterest saw increased ad revenues (Thursday) as well as growing numbers of monthly users, especially outside the US

• Waymo announced a partnership with Daimler Trucks (Wednesday) on driverless lorries, but I have to say I think it’ll be quite some time before we see those on the roads in any meaningful numbers
• Mercedes-Benz took a 20% stake in the troubled Aston Martin (Wednesday). Just to give you a bit of perspective here, when Aston Martin had its IPO in October 2018, it was valued at £4bn. It’s now worth £1bn – so you can see why it needs help!
• There was some rare good news for Jaguar Land Rover as it returned to profit (Wednesday) due to better sales in China and decent sales of its new Defender model

• It looks like consumers are sticking with brands they know well in these troubled times as Kraft Heinz, Kellogg (Friday) and Hornby (Friday) have found. This confirms similar conclusions drawn at Unilever, Reckitt Benckiser and Procter & Gamble recently. There were mixed signals coming from the US as Visa and Mastercard figures showed flat spending since July (Thursday) but then US car sales were actually going stronger (Thursday) – particularly in luxury vehicles and high end pick-up trucks. In the UK, we are still spending on real estate – and agents are pushing for an extension to the stamp duty holiday (Thursday)
• On the retail side of things, Next unveiled strong figures but warned about a risk to momentum going into the end of the year (Thursday) while John Lewis announced that 45% of its flagship Oxford Street store would be changed into offices (Thursday) showing that it is trying to change

• Watson’s Yearly updates: watch this space!

My favourite “alternative” stories were food related. For the main course, we have Gordon Ramsay’s £48 ‘pizza beef Wellington’ blasted by fuming Italians (The Mirror, Rosaleen Fenton) and then for dessert, we have Woman suffers mortifying fail on camera while trying to enjoy a crème brûlée (The Mirror, Rosaleen Fenton). Nice 👍

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 GDP was up according to official figures (Monday) and the International Monetary Fund reckons it’ll be the only major world economy to grow this year
• Europe’s economy is looking increasingly fragile (Monday) as France, Germany, Italy, Spain and the UK have all been putting in tighter measures to stop the spread of a second wave of the coronavirus. These restrictions will clearly limit any growth while they remain in force
• Rishi Sunak put implemented new measures to support jobs and businesses over the next six months (Friday) in order to avoid mass unemployment going into winter

• Big Tech looks like it’ll suffer whoever wins the US presidential election (Monday), just for different reasons. For now, though, the US Department of Justice filed a competition case against Google (Wednesday) saying that it has shut out competitors by signing exclusive contracts with other companies. For instance, Google is thought to pay Apple a huge amount of money to be its default browser. Although there has been no official word on this, it is thought to be worth up to an astounding 20% of Apple’s annual profits! If Google gets pressured on its search engine though, ironically it could be Microsoft (another giant!) who benefits most (Friday) as it is the only real competitor Google has! Anyway, it seems that momentum against Big Tech is building
• Facebook launched Facebook Dating in the UK and Europe (Thursday) some months after its planned original launch of February 14th. Facebook is aiming to make inroads into an online dating market that is thought to be worth about £3.8bn. It is differentiating itself from the competition by giving users a “more authentic look at who someone is”, but I think that there are potential dangers here of Facebook collecting even more sensitive material from users. Let’s hope they treat it right. Having said that, Facebook is also facing the possibility of a massive fine (Monday) that could run into the billions as it is now facing allegations of leaking contact details of under-18s
• The number of Snapchat users continues to increase (Wednesday) and the company is doing well from advertising. This surprised the market on the upside to the extent that the company’s share price shot up by 20%! The year’s final quarter is usually Snapchat’s best, so there are hopes of even better things to come

• It was quite interesting to see that Americans are now touring developing countries urging them to use non-Chinese tech (Monday) in return for more “safety” and more reasonable financial terms. This looks like the next phase of what seems to be an all-out American attack on Chinese tech companies following last year’s (and this year’s!) ongoing hatchet job on Huawei!
• The Swedish government banned Huawei and ZTE (Wednesday) from its 5G networks, becoming the latest European country to do so
• Ericsson announced a decent set of figures (Thursday) mainly due to strong performance in China. However, given the Swedish government’s rejection of Huawei, you would have thought that Ericsson could easily be targeted for retaliation. This may mean that the likes of Nokia and Samsung get a boost

• There were two big deals among shale producers this week. Conoco Phillips bought Concho Resources for $9.7bn (Tuesday) and the following day Pioneer bought Parsley Energy for $7.6bn (Wednesday) as the sector continues to consolidate. It seems to me that after the massive shake-out the sector went through as prolonged low oil prices forced many players out of the industry, we are now well and truly in a consolidation phase. Chevron bought Noble Energy in July for $13bn and Devon Energy bought WPX for $12bn in September, so there may well be more to come!

• Tesla announced its fifth consecutive quarter of profits (Thursday) but it turns out that this is largely due to other car companies buying “green credits” from Tesla in order to avoid fines from the EU for breaching emissions limits. If Tesla did not get this income, it would have lost money in the last four quarters!
• PayPal is now accepting Bitcoin (Thursday), which I think is historic – as it means that Bitcoin is edging ever closer to the mainstream!
• Quibi, the much-hyped short-form video streaming service shut down (Thursday) after less than one year of being in operation! What a massive failure! I think it was precisely the wrong product at the wrong time as it came into being at the beginning of lockdown just at a time where people suddenly had a lot of time on their hands and wanted to watch box sets!
• The European Parliament voted down plans to stop vegan foods from referring to their products as “burgers” and “sausages”. The meat industry was, unsurprisingly, pushing to stop meat substitute producers from using words usually associated with meat. They claimed that it was to stop consumers from being “confused”, but we all know that they wanted to do it to make the food sound unappetising! This isn’t going to be the end of the meat industry, but I do think that this is an important development for meat alternatives

• Watson’s Yearly updates: watch this space!

My favourite “alternative” stories were quite tame this week. There was the article which showed you how to make your own cola in How to make craft cola with all natural ingredients (SoraNews24, Oona McGee) which looked pretty good and then there was the unusual trend identified in Rubber chicken handbag everyone is obsessing over and where to buy it (The Mirror, Paige Holland). Nice!

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.

• So it looks like China is going to be the only major economy to grow in 2020 (Wednesday) as exports were up (helped by sales of things like PPE and laptops), as were car sales. This news powered China’s markets upward
• The Indian government announced a $10bn stimulus package (Tuesday) to encourage investment, but it fell way short of expectations. No doubt there will be more to come…

• The EU is talking about getting tough on Big Tech (Monday) as it is drawing up a list of 20 tech companies that will have to adhere to much stricter rules in order to rein in their massive power. The devil will clearly be in the detail on this one but Big Tech won’t take this lying down. If the EU can’t even win against Apple (remember it tried to fine it a few months back and failed), you do wonder how it will fare against the combined might of Big Tech!
• The OECD failed in its attempt to get 137 countries to agree on a blanket digital tax on tech companies (Tuesday). There are too many countries with vested interests and agendas and so the deadline got booted into next year. In the meantime, countries that imposed their own digital services taxes (France, Italy and the UK) are looking particularly exposed
• Silicon Valley companies are talking about making pay cuts of 15% or more (Monday) as more of their staff work from home. The argument is that they shouldn’t be paid premium wages if they don’t live in commutable areas, but in practical terms I think this will be very hard to police
• Apple unveiled four new iPhones this week that all have 5G capability (Wednesday). Prices are actually quite competitive by Apple standards and I think that they will sell incredibly well as many people will have held back upgrading until the company brought out a 5G phone
• Samsung had a bit of a turn this week as it had to hastily withdraw BTS-branded phones from China (Tuesday) because one of the band members managed to offend China in a comment. This didn’t seem to affect the IPO of BTS’ management company – Big Hit Entertainment had a hugely successful market debut (Thursday) although it does look quite precarious to me
• Zoom announced a new marketplace platform feature (Thursday) as well as a platform for other apps that will enhance the existing offering (called “Zapps”). It’s good to see that one of the major winners of lockdown is continuing to innovate in order to keep the momentum going

• Levi’s and Hilfiger are trying to introduce new ways of shopping (Monday) by doing livestreams. It’s a bit like a more up-to-date and interactive form of QVC and is already very popular in China. I think it’s the way forward for apparel retailers – especially under lockdown
• Asos announced strong results (Thursday) but the share price weakened because it outlined a cautious outlook given that its core demographic – twentysomethings – are having the worst time in terms of unemployment
• It was Amazon Prime Day this week (Wednesday) and the company continues to go from strength to strength by expanding its workforce, its air freight business and its Amazon Prime member numbers

• There was a definite division in terms of performance from US banks this week. JPMorgan (Wednesday), Goldman Sachs (Thursday) and Morgan Stanley (Friday) did well from trading and investment banking revenues while those with more exposure to the “boring” businesses of deposits and loans like Wells Fargo and Bank of America (Thursday) didn’t perform so well as worries persist of loans going bad and continued low interest rates mean wafer-thin margins

• In COMMERCIAL PROPERTY – WeWork is offering rent discounts to existing customers (Thursday) as they try to hang on to who they have currently. This is going to get trickier as lots of SMEs will probably work from home and larger companies will be reviewing their office space needs as working from home becomes the norm for many
• In RESIDENTIAL PROPERTY – there are signs that residential property demand is losing some of its momentum (Thursday) after an initial frenzy when Sunak announced the Stamp Duty holiday, but at the £10m+ end of the market demand is still brisk (Thursday)

• Watson’s Yearly updates: watch this space!

There were a couple of gems in this week’s “alternative” stories! There was some mind-bending ink on display in Man’s ‘insane optical illusion’ tattoo looks like giant hole in his head (The Mirror, Paige Holland) which I thought was just incredible! But then there was also the hilarious Woman poses dog for photo to announce her engagement and quickly regrets it (The Mirror, Luke Matthews) which goes to show that you shouldn’t try to over-complicate things.

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.

• So Trump returned with a bang this week (Tuesday), saying that getting coronavirus was a “blessing from God” because it had led him (!) to a cure. He reserved particular praise for his antibody treatment from Regeneron (Thursday). Eli Lilly is now pushing the FDA for emergency use of its antibody treatment for mild-to-moderate coronavirus cases (Thursday)
• The German government is getting increasingly concerned about the precarious nature of Spain’s economy (Tuesday) and that it is now more vulnerable than Italy or Greece! Not great when you consider that it is one of Europe’s major economies. If that wasn’t bad enough, the High Court for the Madrid region rejected new government measures restricting access into and out of Madrid (Friday) saying that they violated fundamental rights and had no legal basis. This makes an already difficult situation with an unstable coalition, unco-operative regional governments – and now courts – much worse. It will make following guidelines extremely difficult because no-one is going to know who to believe!
• Indonesia announced major reforms in tax and labour laws (Tuesday) in an attempt to attract foreign investment. This is important given that all countries are trying to boost their economies – but Indonesia probably has an eye on inward investment from companies who want to diversify their supply chain away from China but still stay in the region. Up until now, employment severance payments were among the highest in the world, potentially scaring many away from too much commitment. That is now clearly changing…

• China announced the broader rollout of an experimental vaccine from state-controlled SinoPharm (Monday). It has actually been distributing the vaccine since July to frontline workers and state employees. These vaccines have not passed all tests thus far so the subjects are taking big risks here. Having said that, I really hope that they work out!

• In EMPLOYMENT – chances are that we’re going to be working from home on a permanent basis (Monday). A survey from the British Council for Offices showed that the majority of white-collar workers want to have a mix of home-based and office working. This trend would seem to be borne out by historic rail traffic lows (Friday) and the fact that London is currently experiencing a weaker recruitment uptick than most regions (Thursday)
• In CONSUMER BEHAVIOUR – we continue to order more online – which has led to DPD to announce 20,000 more jobs (Monday) – and download more games online, according to Codemasters (Thursday). In fact, a PwC survey showed that households are generally upbeat on finances (Wednesday) but we’re only really spending on groceries and DIY! We’re also apparently spending on Rolexes (Wednesday) and suburban Wagamamas (Wednesday). On the downside, the 10pm curfew is dampening spending (Tuesday) and we’re not going to cinemas (Monday) because the blockbusters keep getting booted into next year! Despite the gloom now, it seems that Ikea continues to push forth in opening city centre shops (Wednesday)

• Samsung had excellent results (Thursday) thanks to stronger smartphone and consumer electronics sales and a boost in its 5G network business as it benefits from being a Huawei alternative. Facebook has decided to ignore Turkey’s new stricter laws on social media (Wednesday) that are ostensibly intended to make them more responsible for trolling (and other nasties) but also have a handy side effect of further enabling President Erdogan to control the narrative in his country (handy, that is, from Erdogan’s point of view!). Google has decided to play safe in India (Tuesday) by bowing to pressure not to impose its Play Store billing policy (30% on in-app purchases) for the moment. Given it is trying to make serious inroads into this market, it seems logical that they should tread more carefully here. There was a great deal of resistance to this from local developers

• Watson’s Yearly updates: watch this space!

There were some pretty uplifting “alternative” stories in Watson’s Daily this week, but my favourite ones were the brilliant ‘Drive-in wedding’ in Chelmsford bypasses Covid restrictions (bbc.com) and the hilarious Genius pet owner makes dog-sized holes in fence so pooch can watch passers-by (The Mirror, Courtney Pochin). Brilliant 😂! 

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

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• On the consumer side of things, the latest data from the Office for National Statistics says that Britons have been saving at record levels (Thursday), which sounds good in a way but on the other hand, one of the economy’s biggest drivers is consumer spending. If they aren’t spending, they are saving – and things get a bit unstuck. Another driver/indicator of consumer sentiment is the housing market. Housing-related searches on Google appear to be slowing down versus their peak (Monday) which would imply that interest is on the wane, but then again the latest Bank of England figures show that mortgage approvals are at 13-year highs (Wednesday) and people are still looking to move because/ahead of a coronavirus second wave (Wednesday). I am inclined to think that the current housing boom is due to factors that may lose momentum in the coming months – specifically, pent-up demand that was frustrated by lockdown, Sunak’s stamp duty holiday and “new” demand from people who want to get abodes with extra rooms and maybe a garden in the ‘burbs. Given that we are expecting an increase in unemployment and continued economic uncertainty, I would expect the housing market to lose steam. However, if you are fortunate enough to have kept your job, continued to be paid and want to move, mortgages are dead cheap and there’s a lot of property to choose from!
• So where does a consumer go to spend money? If they venture out onto the high street, they will notice that Côte Restaurants was given a lifeline by an investor (Tuesday) but Pizza Hut (Tuesday), Greggs (Wednesday) and Burger King (Wednesday) all announced cuts. Interestingly, Burger King is looking to make more drive-ins, but whether or not interest in drive-throughs will continue past the end of the pandemic is a moot point. The consumer could also go to the supermarket! A consortium comprising of TDR Capital and EG Group bought a majority stake in Asda from Walmart at the end of the week. Walmart has been trying to offload Asda for the last few years after owning it since 1999 as its international expansion plans have changed to concentrate on growth markets. It tried to sell it to Sainsbury’s last year, but that all fell through. Elsewhere in the sector, Aldi (Tuesday) and Morrisons (Thursday) announced that they were employing more people and discounter B&M is winning new customers (Wednesday). Meanwhile, Ocado overtook Tesco to be Britain’s most valuable retailer (Wednesday) but then again it lost its shine as Norwegian rival AutoStore took it to court (Friday) saying that Ocado had violated a number of its patents. Meanwhile, in the US, grocers are starting to stockpile (Monday) in anticipation of potential panic buying in another lockdown
• Meanwhile, in online retailing, Boohoo put in an impressive performance (Thursday) despite all that Leicester sweatshop scandal over the summer! It seems that consumers aren’t too worried at the moment about where clothes come from if they spot a bargain as the company’s profits easily beat market expectations…

• TikTok is still going despite Trump’s best efforts to ban it (Monday) as a federal judge blocked his attempts to shut it down just four hours before the deadline
• SMIC, China’s #1 chipmaker weakened further (Tuesday) as Washington put it onto the “entity list” which means that US companies will now need licences to export anything to SMIC, meaning that its current access to US software and equipment will be severely restricted. This is all part of Trump’s efforts to strangle Chinese tech and although he is clearly playing to voters here, this is not just a question of US vs China. The fact is that a third of SMIC’s suppliers are American, so Trump is shooting himself in the foot to some extent! For instance, Qualcomm – the US chip designer – uses SMIC to make some of its chips
• Germany is about to impose new restrictions on telecom equipment providers (Thursday) which will effectively exclude Huawei from Germany’s 5G network. The bill has not been finalised yet, so there may still be changes – but it’s not looking good for Huawei
• Google’s purchase of Fitbit is approaching EU approval (Wednesday) despite the EU authorities having deep initial reservations. Rival makers are now ramping up their objections to the deal arguing that it would be anti-competitive and a threat to privacy. It has made promises to restrict its use of data but the objectors argue that it is unclear how this could realistically be policed
• Amazon is testing a palm reader (Wednesday) where you will be able to pay for goods at shops just by using your hand on a contactless pad! Needless to say, many retailers are interested in this technology but it will first be tested at Amazon Go stores

• China’s annual motor show opened on the weekend (Monday) and all the major motor manufacturers are targeting China. Not surprising really, considering that China is the biggest car market in the world. China is particularly interested in being at the cutting edge for electric vehicles but EVs only make up 5% of all vehicle sales currently. Interestingly, VW announced a €15bn joint investment in EVs over four years (Tuesday) with SAIC Motor, FAW Group and JAC Motors. Tesla announced a new lower price for its Model 3 in China (Friday) due to its use of a domestically-sourced battery. There was some more good news for the recently-embattled company at the end of the week as it announced better-than-expected quarterly deliveries
• Nikola saw its share price fall further to 80% below its recent peak (Tuesday) as the scandal continued to deepen. Allegations surfaced of the company using truck designs from a third party (Monday) and it had to postpone its showcase event (Thursday)

• GAMBLING – Caesars Entertainment is looking to buy William Hill (Tuesday) in a deal where it can take advantage of William Hill’s expertise in online gambling and sports betting and William Hill can get access to a major growth market – something that is increasingly hard to come by in the UK. It looks like rival Betfred is keen to buy William Hill’s portfolio of shops as Caesars is not interested in this
• BUSINESS INTERRUPTION – The FCA lost in its bid to get insurers to pay “business interruption” claimants after last week’s judgment (Thursday), which no doubt means that more businesses will go under due to lack of money
• TRANSPORT IN LONDON – TfL sent a begging letter to the Treasury (Thursday) to get it through current nightmarish conditions. Unsurprising and it will no doubt come with major strings attached. Sadiq Khan’s job will get that much harder as a result IMO
• THE RISE OF E-COMMERCE/BREXIT PROSPECTS – Warehouse rents are rising (Friday) as e-commerce activity continues to be brisk and companies seek to stock up ahead of Brexit

• President Trump and his wife tested positive for coronavirus (Friday) casting some uncertainty over what will happen re the presidential election. What happens if a candidate must withdraw from a presidential election (Financial Times) is an excellent article which looks at the options if Trump doesn’t make a swift recovery. If he has to withdraw before polling day there would have to be a vote of a new candidate – and it doesn’t necessarily have to be the vice president. It’s also possible that the presidential election could be delayed – Trump already raised this prospect in July due to his concerns about fraud – but he can’t decide this, it’s up to Congress (but they’d have do change the law to do this). Whatever happens, the current presidential term has to come to an end on January 20th – so there is a limit to how long things could be delayed. If Trump dies, vice-president Mike Pence will take over – something he would also do if Trump became unable to perform the duties of office due to being incapacitated in some way. However, as I type this, Trump appears to making a swift recovery so maybe things could get back on track. Having said that I would have thought that he’d do his best to delay the election given that he has been trailing Joe Biden in the polls. We’ll just have to see how it goes!

• Watson’s Yearly updates: watch this space!

There were some pretty entertaining “alternative” stories knocking around this week but my favourites were Woman laughed until she cried over her puppy’s ‘chunky’ bum in hilarious snap (The Mirror, Courtney Pochin), the bizarre model kit in Weirdest plastic model ever – A 1:1-scale Cup Noodle, including the ramen and toppings (SoraNews24, Casey Baseel) and the controversial Birds Eye divides fans with Fish Finger Korma sandwich as some think it’s ‘all wrong’ (The Mirror, Courtney Pochin). See you again on Monday!

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 exports recovered from April Lows (Monday) but the Asian region as a whole appears to be recovering on strong exports of things like tech hardware and medical equipment.
• In the UK, Rishi Sunak announced various new measures (Friday) to keep the economy going and to smooth the effect of the end of furlough. The current system is being replaced by a German-style wage subsidy scheme, extended the 5% VAT rate for restaurants, hotels and cinemas, announced more support for the self-employed and extended the life of four loan schemes

• The week started with what looked like a positive development for the TikTok deal (Monday) as ByteDance said it would own 80% of the new TikTok Global venture with Oracle and Walmart on the one hand, but the Americans said they would actually hold a majority shareholding given that they own 40% of ByteDance on the other. This led to a load of confusion as to who exactly is top dog in the venture (Tuesday) and the Chinese state media was very critical of the way the deal had been done (Thursday), throwing doubt on whether it would be approved. ByteDance ended the week seeking approval by the Chinese Commerce Ministry (Friday) and things are still hanging in the balance
• Trump recently tried to impose a ban on Tencent’s WeChat app, but a Californian judge upheld the objections of a non-Tencent affiliated group called the WeChat Users Alliance (Monday) which delayed the ban. It seems that Trump’s recent bravado regarding Chinese tech companies could potentially backfire badly – not something he’ll want as he gets closer to the presidential election. Having said that, he’s continuing in his efforts to hobble Chinese tech in China’s biggest chipmaker hit by US sanctions (Financial Times, Yuan Yang and Kathrin Hille) as the US Department of Commerce told companies on Friday that exports to China’s Semiconductor Manufacturing International Corporation (SMIC) posed an “unacceptable risk” of being put to military use and would therefore impose sanctions. It all depends how these sanctions play out, but they could severely restrict China’s biggest chipmaker’s access to key US software and chipmaking equipment. This is all getting very nasty…
• Microsoft bought ZeniMax Media (Tuesday) for $7.5bn in an interesting move to boost its content capabilities ahead of the upcoming November console wars when it goes head-to-head again with Sony. With relatively similar technical specs, I suspect the initial success of the consoles will be very dependent on the games lineup. As things stand it seems that Sony may be slightly ahead at the moment on that front…
• There was a lot of news on Apple this week. It launched an online store in India (Thursday), the world’s second biggest mobile phone market (the biggest is China), which is probably a wise move given the testy relationship between the US and China on the tech front at the moment and an ever-present risk that it will become a political football as a result. It needs exposure to growth markets, so this is a positive step. On the other hand, it faced increasing resistance to its AppStore policies as a number of tech companies got together to form the “Coalition for App Fairness” (Friday). Interestingly, Apple makes unexpected concession on 30% App Store fees (Financial Times, Hannah Murphy and Patrick McGee) shows a rare moment of contrition for the tech giant as it said it would drop its fees for businesses that have been forced by the coronavirus to pivot to online-only events until the end of the year. Apple released stats this week saying that over 500 Apple experts review 100,000 apps each week. However, Epic Games’ CEO Tim Sweeney, scoffed at this saying that “a developer spends 1000s of hours creating an app, and 100s of hours updating it. Apple spends 12 minutes reviewing the update and takes 30%”
• Amazon did a gadget reveal event this week (Friday) will a lot of cool stuff – but do you really want Amazon to embed itself even more deeply in your life than it is already??

• On the positive side, we have been buying loads of DIY stuff as Kingfisher (owner of B&Q and Screwfix, among other things) was confident enough to pay back its furlough cash (Wednesday) and online shopping was strong at Nike (Wednesday) and UK apparel retailer Joules (Thursday)
• On the negative side, we are not spending money on travel. Ryanair’s current booking levels are shockingly low (Thursday) while Airbus and Tui are announcing job cuts (Wednesday). It’s not much better on land either as things have got so bad that the government is going to do the biggest overhaul on our railways for the last 25 years (Tuesday)…
• …and the sudden lack of commuters travelling by train has led to a dire performance by SSP (Thursday) which owns concourse stalwarts Upper Crust and Caffè Ritazza. BoJo’s previous eagerness in encouraging workers to go back to the office was reversed, meaning that many workers will return to working from home (Thursday) and jobsite Indeed confirms that more workers are looking at moving out of the capital (Friday), something that estate agents have been noticing recently

• Banks saw a bit of drama this week as Deutsche Bank announced that it was cutting 20% of its branches in Germany (Wednesday), which comes shortly after Handelsbanken made a similar move in its native Sweden. HSBC got caught up in a money laundering scandal (Monday) and it suffered as a result (Tuesday)
• The FCA reached a conclusion on insurers following a review (Wednesday) which means that renewals on home and car insurance will no longer be higher than the cost of policy for a new customer. This is great for the consumer on the surface because it is fairer (and means that loyal customers aren’t punished!) but then I am sure that insurers will just whack up insurance for all of us to cover the cost 😁

• It was a bad week for electric vehicle manufacturers. Tesla’s share price fell because expectations of exciting announcements were rather more advanced than the reality (Wednesday). Nikola’s founder resigned (Wednesday), as the whole ridiculous scandal continued – but that isn’t the end of it! Nikola founder bought truck designs from third party (Financial Times, Claire Bushey, Peter Campbell and Ortenca Aliaj) contends that the original design for Nikola’s flagship truck wasn’t designed by founder Trevor Milton – he actually bought it from a designer in Croatia! O.M.G. 😱😱😱. Is there no end to this man’s shame?!? My money’s on a Netflix documentary on this within the year 😂. You just couldn’t make this stuff up!

• Watson’s Yearly updates: watch this space!

I think this week was quite tame regarding “alternative” stories, but I have to say that this make me laugh quite a lot: Waitrose mocked by shoppers for selling £6 ‘autumn foliage’ as leaves are free outside (The Mirror, Courtney Pochin). Whoever came up with this wheeze is a genius 😂. Getting punters to pay six quid for a bag of leaves is just superb!

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

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• Oracle “beat” Microsoft in the race for TikTok (Monday) but ByteDance is still going to be the majority owner as things stand. Oracle is to be the TikTok’s tech partner and will have an HQ in the US, which will be disappointing for those hoping for a London HQ. The proposed deal is now with the Committee on Foreign Investment in the US (aka “Cfius”) for a recommendation. Unfortunately, on Friday 18th, the Commerce Department brought in regulations to ban US companies from providing downloads or updates for TikTok and WeChat apps from 11.59pm on Sunday, according to US bans Chinese apps TikTok and WeChat, citing security concerns (Wall Street Journal, Katy Stech Ferek and John D.McKinnon). There are two major concessions from a total ban: firstly, that US companies would be allowed to continue to provide web hosting services for TikTok until November 12th and secondly, that US companies will be allowed to continue to use WeChat outside the US. WeChat ban rattles Chinese communities in the US (Wall Street Journal, Shan Li) shows the immediate panic of Chinese WeChat users who rely on the service – it has had almost 22 million downloads from Google Play and the Apple App store in the US since January 2014, accounting for about 7% of the app’s total downloads outside China. Meanwhile, a group called the WeChat Users Alliance got together to sue the Trump administration over the executive order to shut it down and Judge to hear arguments on Trump’s WeChat restrictions (Wall Street Journal, Sebastian Herrera) shows that the hearing is ongoing. I bet Trump is loving the problems he is causing! FWIW, I think he is using this as an opportunity to show voters he is sticking it to the Chinese. Not great for the innocent people caught in the middle!
• Nvidia announced its intention to buy Arm Holdings from current owner SoftBank for $40bn (Tuesday). If this gets approved, Nvidia will broaden its horizons enormously because Arm chips are in 90% of the world’s smartphones, with customers such as Apple, Qualcomm and Broadcom. China’s chip industry is complaining that this move will give Nvidia, viewed as a competitor, far too much power in chips (Thursday) and, considering that Chinese regulators will also have to approve this acquisition for it to go ahead it is far from a done deal (Friday) because both Nvidia and Arm Holdings have reasonably sizeable business interests in China, they would be taking a sizeable risk if they ignored objections and went ahead anyway
• Apple announced new gadgetry (Wednesday), but did not unveil the next generation of iPhone due to production delays caused by Covid. It is expected that there will be a separate announcement on this in a few weeks’ time
• There were rumours of the Federal Trade Commission looking at bringing an antitrust lawsuit against Facebook (Wednesday) but whether it actually goes ahead or not is moot as it has threatened to do things like this in the past with other companies and just changed its mind
• Spotify struck a deal with Songkick (Wednesday) to promote live streaming events on its platform. Given that lockdown has effectively ended all concerts for the foreseeable future, the prospect of doing livestreams instead should be a welcome revenue stream for all concerned. It may even be an additional revenue stream when things do actually normalise in the future
• Sony announced two PS5 consoles (Thursday) at two price points, much like Microsoft’s new XBox. Both franchises are releasing a cheaper console without a disc drive and a more expensive one with a disc drive. They will both be launching at about the same time and if their tech specs are relatively similar, success is going to be all about the games line-up (where Sony possibly edges Microsoft)
• There was a great story this week about a small British company called iAbra which is working on a coronavirus testing device which gives you a result in 20 seconds (Thursday). It’s still in development, but wouldn’t it be brilliant if it worked well and made it to market!

• The FCA announced plans to investigate Klarna (Thursday), which I think is a good thing considering that the unsecured credit market (especially in the “buy now, pay later” segment) has grown exponentially in the last few years. Given that many countries are in recession there is a danger that a wave of defaults could hit companies like Klarna – so I think that an investigation is long overdue!
  
• The FCA also made the news this week because the verdict over its test case with insurers was announced (Wednesday). You will recall that many companies claimed on their business interruption insurance when lockdown hit, only to find that insurers said they weren’t covered. Rather than let individual companies try and fail against the insurers, the FCA decided to try and accelerate things by getting insurers together, collating some of the common policy wordings and then taking a test case to the High Court. The verdict was not clear cut but it favoured claimants more than the insurers. Insurers will appeal but this could be good news for many affected firms (although this will come too late for some)
• Rumours surfaced of a UBS/Credit Suisse merger (Tuesday) but I wouldn’t get too excited at this stage – rumours of a “dream team” world-beating Swiss combo have been around for donkey’s years! They even used to surface when I started working in the City in the late 90s! If there was a merger, there would be massive job losses IMO given the business overlaps

• On the negative side, it appears that UK shopper numbers are falling (Tuesday) according to the latest figures from Springboard, but then again it’s always quiet around the time when kids go back to school. The ridiculously-named Unibail-Rodamco-Westfield shopping centre specialist announced a plan to bolster its balance sheet (Friday) due to ongoing difficulties resulting from the coronavirus outbreak and is looking to sell assets as well to raise money. John Lewis also axed the staff bonus (Friday) for the first time in over 60 years as the tough times continue for the high street stalwart
• In more positive news, its seems like the Ocado-Marks & Spencer venture is going well (Wednesday), Aldi announced click-and-collect (Tuesday), New Look managed to survive a creditors’ vote (Wednesday) and Inditex (owner of Zara etc.) is back in profit and looks set to be heading back to normality (Thursday). Interestingly, Thomas Cook popped up – now as an online travel agent (Wednesday)

• The whole electric-truck maker Nikola scandal is just getting more ridiculous by the day, don’t you think?? So it turns out that the Hindenburg Research allegations were true about Nikola’s questionable tactics (Wednesday) with Nikola giving hilariously dodgy rebuttals. The US Department of Justice is now going to investigate alongside the regulators to see whether the company misled investors. We’ll just have to get some more popcorn, pull up a seat and see what happens next 😁

• Watson’s Yearly updates: watch this space!

This week, my favourite “alternative” story this week was the hilarious Woman labelled ‘genius’ for sharing ‘revolutionary’ way she eats duck pancakes (The Mirror, Courtney Pochin). Probably best not to do this in a restaurant if you want to maintain a low profile…

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.

• Japan signed a trade agreement with the UK (actually, this wasn’t in Watson’s Daily because the news came after it had been published) which has been described as “historic” as the UK’s first big post-Brexit trade deal. This is supposed to take us closer to being part of the Trans-Pacific Partnership (TPP – which currently comprises of Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico and Brunei). It looks like the current deal reflects most of the existing agreements between Japan and the EU with a few extras. One Brexiteer said “Brexit bonanza here we come”, but I wouldn’t get too excited yet!
• In EUROPE – the ECB left interest rates unchanged (Friday) while Eurostat data showed that global trade was increasing (Wednesday) while concern is building over the likelihood of a loss of momentum as economies continue to face headwinds
• In the UK – Rishi Sunak is going to have to face up to the prospect of the end of furlough as October 31st is fast approaching. Many will want the handouts to continue and MPs are already pushing for it to be extended at least for those in some industries that are suffering the most. However, the Bank of England’s chief economist Andy Haldane says that furlough should not be extended (Wednesday) as it is just putting off the inevitable. A survey from BDO shows that 60% of mid-sized UK businesses are expecting to cut staff once the Job Retention Scheme ends (Monday) but then another survey from KPMG/REC showed that blue-collar jobs are thriving more than white-collar ones (Wednesday) with temporary jobs being more prevalent than permanent ones as employers are wary about longer-term commitment given the current economic backdrop

• UK consumer spending is increasing (Tuesday) according to Barclaycard data – and we have been spending more on clothing, pubs and bars but not so much in shops. Presumably this has been mainly driven by the Eat Out To Help Out initiative, but with the prospect of the end of furlough looming large, momentum could easily slow
• Interesting trends seem to be emerging among retailers. US retailers are talking about bringing Christmas promotions forward (Tuesday) to get consumers to spend now (presumably they are worried that they might not be minded to spend so much later in the year) while in the UK, Primark reported weaker sales in town centres while their outlets in retail parks were buoyant (Tuesday), which is interesting because the opposite trend had been true leading into the coronavirus outbreak. Mind you, M7 Real Estate just bought 6 out-of-town retail parks (Tuesday), which was cheaper than buying industrial property given that the latter has seen far more demand than the former, so maybe they are not dead yet
• In supermarket trends, Lidl said it would be expanding by one new shop per day (Monday) until it reached a target of 1,000 outlets by 2023. Morrisons plan to employ more staff (Tuesday) although doing so under lockdown took the shine off their profits (Friday). Iceland is also employing more staff (Wednesday)
• In positive retail trends JD Sports did well online but not so much in its physical stores (Wednesday), Halfords continues to do well (Wednesday) as people continue to shun public transport – but I think that’s not going to last too long as winter will make cycling less appealing and there are only so many people who can go to work by car – and SCS did well from sofa-buying (Wednesday) as those with money to spare in lockdown decided to make sitting down more comfortable 😂
• In negative retail trends, New Look appears to be close to collapse (Thursday) and pizza-related restaurants continue to suffer as Pizza Hut cut 29 outlets (Thursday) and Pizza Express cut 73 restaurants (Tuesday) as part of a restructuring

• Samsung signed a $6.6bn deal with Verizon to build 5G networks in the US (Tuesday). The contract runs until 2025 and is clearly a slap in the face for Huawei. This is good for Samsung because it has quite a small market share in the 5G network business, so this will go some way to make up for weaker handet sales
• Epic Games continues its suicide mission in trying to make Apple do something via the courts. It is trying to return to the App Store (Monday) but then Apple decided to countersue (Wednesday). I think that Epic Games was arrogant/stupid/naive to think that it could take Apple on on its own. The longer it drags it out the more business it will lose. I think that it would have stood more of a chance if it had taken the time to consult others on this, but by going it alone, it has made things much harder for itself. The only thing stopping me from thinking that it is yet another games company with a massive hit which then fades badly is that it has its Unreal Engine which powers other games. IMO it needs to wind its neck in and get back to business – and pronto. The only parties to benefit from this will be the lawyers! Yes, Apple charges a lot – I can see why Epic Games is irked – but you don’t take a pea-shooter to a gun fight with a massive opponent and their huge array of weapons
• Talking of Apple, the company has a big product launch set for next week on Tuesday 15th – and it will not be announcing the new version of the iPhone as the 5G iPhone launch was delayed until October due to coronavirus-related supply chain disruption. According to With no iPhone to launch, Apple turns to accessories and wearables (Financial Times, Patrick McGee and Tim Bradshaw), this will be the first time it has not unveiled its new iPhone at the event in almost ten years! Instead, it will push the accessories business and new hardware such as the Apple Watch, a new iPad Air, new over-ear headphones called AirPods Studio and lost items tracker AirTags. It’s interesting to note that, over the last five years, sales attributed to the iPhone have fallen from 63% to 44% in the latest quarter. Over that time, its wearables and accessories sales have shot up by 144%, mainly thanks to the Apple Watch and AirPods. One interesting metric shows that for every 100 iPhones sold, Apple sells 49 pairs of AirPods and 14 Apple Watches. In contrast, for every 100 Galaxy S phones sold, Samsung sells 34 Galaxy Buds and 14 watches – and Apple also manages to sell at higher margins

• Tesla’s share price took a massive dive (Wednesday) as part of the wider Big Tech sell-off where investors decided to crystallise the massive gains they’d made. However, the juiciest stories in electric vehicles this week concerned Nikola, the upcoming electric truck specialist! First of all, General Motors announced it had taken an 11% stake in the company (Wednesday) and will work jointly on an electric truck called the Badger – but then allegations surfaced in a report by Hindenburg Research which posed major questions about the legitimacy of the company’s claims to proprietary technology (Friday)! Some of the allegations are absolutely shocking! Nikola subsequently said it had “nothing to hide” and threatened legal action. Nikola’s share price fell by 12% initially on the report, then fell another 8% in the following day’s trading. This is going to get very messy IMO. Nikola says that it is just a short-seller talking its own book, but Hindenburg is saying that Nikola is lying to its investors
• Everyone was disappointed by AstraZeneca pausing its coronavirus vaccine trial for one of the big hopes (Wednesday) after a “suspected adverse event”, but they played down its significance (Thursday) and it emerged over the weekend that trials resumed once more with the Oxford University venture, according to Oxford and AstraZeneca resume coronavirus vaccine trial (Financial Times, Clive Cookson). Interestingly, the trial was actually paused last Sunday but the news did not emerge publicly until Wednesday. Also, this is the second time the Oxford-AstraZeneca trial has been put on hold – and it wouldn’t be a surprise if there were further pauses along the way
• AND FINALLY, LVMH is officially trying to back out of its purchase of Tiffany (Thursday) that it proposed in November last year. A massive bun-fight lies in prospect, but I think this is all about LVMH getting a better price

• Watson’s Yearly updates: watch this space!

This week, my favourite “alternative” story by far was Toddler leaves people in tears as baking with grandma descends into chaos (The Mirror, Luke Matthews). This kid is hilarious (and very, very fast). Also, how about this for an unusual first date idea:  A chain of “welding theme parks” is opening in Japan (SoraNews24, Casey Baseel). See you next 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.

• CHINA manufacturing activity grew at its fastest rate since January 2011 (Wednesday), which is encouraging because it was the first country to go into lockdown and others are watching closely to learn about what may happen in their respective countries
• INDIA’s GDP fell by 24% in the latest quarter during lockdown (Tuesday) – and to give you an idea of how that happened, construction output halved and manufacturing output fell by 40%. India’s chief economic adviser is talking a good game about a v-shaped recovery but others are more sceptical, saying that the rate of recovery is slowing down
• BRAZIL fell into recession (Wednesday) and experienced its worst quarterly GDP fall in the nine recessions it’s had over the last 40 years. The outlook could be a bit shaky as well because the current finance minister doesn’t get on with President Bolsonaro, so it’s anyone’s guess as to who will take over from him – meaning potential uncertainty, which isn’t really what you need at a time like this
• In FRANCE, President Macron pledged €100bn in a recovery fund for the country (Friday), 40% of which could be coming from the EU! It’s a four year plan, so it’ll be interesting to see whether it hits the spot
• Markets fell sharply in trading late on in the week (Friday) as investors took profits in tech stocks that have been going bananas over lockdown (even Tesla fell by 9%!). I don’t see any drivers having changed particularly, so I would have thought that this is most likely a short-term blip. What is interesting, though, is that this move shows just how important tech is to all indexes these days – not just the Nasdaq

• Apple continues to strengthen following its recent stock split (Tuesday) and it became more valuable this week than all of the FTSE100 companies put together 😱! Mad, huh?! It also said this week that any costs related to digital taxes that it has to pay will be passed on to developers (Thursday), much in the way that Google said it would pass the costs on to advertisers (Wednesday)
• TikTok’s future is looking tricky (Wednesday) because the Chinese government issued new restrictions at the end of last week on the export of AI tech from China – which would include TikTok’s algorithms that recommend videos to users. I think that, in the best case, this will lower the ceiling on the potential selling price of the viral video app and, in the worst case, it could completely spoil the chances of a deal being done at all. TikTok’s algorithms are what makes it work so well – and so without that, you have to question the value of buying into it
• India decided to ban 118 Chinese apps (Thursday) including those from Tencent, Alibaba and Baidu and accused them of “stealing and surreptitiously transmitting” Indian user data to China. This happened not long after other Chinese apps were banned following fatal skirmishes between Indian and Chinese troops on the Himalayan border and heralds a real worsening in relations between the two countries. I wonder whether this could leave the door open for non-Chinese companies such as Google and Microsoft who are looking to make more inroads into what many see as the market with most growth potential in the world
• Elsewhere, Zoom decided to lift its full year outlook (Tuesday) for the second time during the pandemic. It seems to have successfully shrugged off any security scares that it had towards the beginning of lockdown (remember “Zoombombing”??) and prospered ever since…

• It seems that, after a bit of a hiatus, we are spending on houses and cars again! UK mortgage approvals rose to pre-pandemic levels (Wednesday), which is benefiting sales at furniture retailer Dunelm (Wednesday) as furniture retailers, DIY stores and electrical retailers are among those who tend to do well in a buoyant housing market. It does not, however, seem like landlords are having a great time (Tuesday) – especially those who are individuals. Although the pain is real, I would have thought that the government will not keep them uppermost in their list of priorities. Car sales seem to be doing well as car finance applications were up by 25% in July and August versus the same time last year (Tuesday), which sounds great, but they are traditionally weak months, so the comparatives are boosted by the fact that they benefited from seeing a bit of pent-up demand (the industry shut down during lockdown). We also spent money on Lego under lockdown (Thursday), with online sales being particularly strong. Digital sales overall have powered pretty much all e-tailer specialists, leading to Amazon announcing that it would employ another 7,000 staff in the UK (Friday)
• The latest figures published by Eurostat said that Eurozone retail sales are losing momentum (Friday) and it seems that, as consumers we are not spending on travel by air – Heathrow announced it would be cutting 25% of its workforce (Thursday), Virgin Atlantic is cutting 1,000 (Friday) as part of its recently-agreed rescue deal and United Airlines announced it would be letting 16,000 staff go. We’re also not travelling by rail – Department of Transport figures showed train journeys last week were at 38% of the level they were at at the same time last year (Thursday) and there have been reports that TfL is considering a new scheme to offer Londoners free bus, tube and train travel to get them using their services again

• Tesla, like Apple has done enormously well since its stock split (Tuesday) and it subsequently decided to raise $5bn (Wednesday) for no apparent reason apart from well, it just can. Scottish investor Baillie Gifford took some profit off the table (Thursday) after Tesla’s stellar performance, but the share price fell by 9% later in the week as Big Tech stocks were sold off
• This week heralded the new partnership between Ocado and Marks & Spencer (Tuesday) but there were some hiccups along the way (Wednesday). As far as I’m concerned, it’s early days yet and there were bound to be some teething problems. Let’s hope that they get ironed out sooner rather than later!

• Watson’s Yearly updates: watch this space!

This week, I brought you burger-in-a-can in Gourmet Japanese hamburger steak in three-year-shelf-life can: Genius or madness? Let’s find out! (SoraNews24, Casey Baseel), a McDonald’s fries hack I never knew in McDonald’s show right way to eat ketchup and fries – and we’ve all been doing it wrong (The Mirror, Paige Holland) and an introduction for those who have not yet met him, the brilliant Uncle Roger. Although the latter is a comedy character, I share his feelings on rice 😁

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.

• We learned this week that the traditional UK “Big Four” banks (Barclays, HSBC, NatWest and Lloyds) continue to dominate (Monday) despite the rise of challenger banks in the wake of the financial crisis. Since the pandemic, the Big Four have provided over 80% of government-backed loans to SMEs as at the end of June (versus America’s four biggest banks who accounted for about 12% over the same time period) and they also account for well over 50% of UK deposits versus US counterparts of about 35%. Revolut announced that it trebled its losses (Wednesday) due to recruitment costs and high customer acquisition costs, but it is now aiming to focus on profitability
• ABN Amro and NatWest cut jobs (Thursday) and TSB announced that it would be scrapping all of its cashiers (Tuesday), something that has been inevitable given how customer behaviour has been changing
• Prudential sold off its US business (Wednesday) to concentrate on the more profitable Asian and African operations

• China car sales increased for the fourth consecutive month (Tuesday) due to government stimulus measures and a recovery in demand for commercial vehicles. It’s good to hear that the world’s biggest car market is gaining momentum, but too early to get excited about implications for anywhere else yet
• Hyundai announced a new electric car line-up (Tuesday) using the IONIQ name as an EV sub-brand. Fun fact: currently, 9% of all cars registered in Britain are now pure EVs or plug-in hybrids vs only 2.5% a year ago. Is the tide turning??
• The much-hyped EV specialist that floated in June, Nikola, got an order for 2,500 bin lorries (Tuesday). This is a positive development because rumblings were increasing among analysts and investors about the company being all style and no substance. This will keep the critics at bay for the moment!
• Looking at the other company inspired by Serbian-American inventor Nikola Tesla, Tesla had a stock split this week (Thursday). All this means it that an existing share gets split into smaller pieces making each share more “manageable”. For instance, if a company’s share price is $1,000 and you have a 5-for-1 stock split, it means that if you owned one share worth $1,000 pre the stock-split, you will own five shares worth $200 each after the split – there is no actual change in valuation. This tends to happen when share prices reach incredibly high levels (this has happened with Apple and Google in the past, for instance) and is meant to make the stocks more psychologically attainable. If you were desperate to get exposure to Tesla but couldn’t afford to buy one whole share, you are now able to get a part of the action courtesy of the stock split. Given that this split is likely to give access to a “new” group of shareholders (retail investors who have been waiting in the wings), this sort of action often gives the company share price a bit of a boost – at least in the short term

• In RESIDENTIAL PROPERTY, UK estate agents are worried about there being a boom-bust housing market (Thursday) as the market has been revived by chancellor Rishi Sunak’s recent raising of the stamp duty threshold. They worry that the end of this stamp duty holiday will just result in the market falling through the floor. FWIW, I would have thought that it would be prudent for him to stagger a return to previous levels rather than impose it suddenly for precisely this reason. There’s bad news for the younger generation as the Resolution Foundation thinktank believes it will get even harder to get a house deposit together (Thursday) even if there is a drop-off in house prices. It said that wages were likely to fall for this demographic – but they touted a very sobering stat. In the 90s, an average couple saving 5% for a house desposit would take 4 years to scrape it together. As things stand right now, it would take 21 years 😱! OK, so the Resolution Foundation is trying to make a point here and probably used the absolute worst case scenarios but it’s still pretty shocking
• There was a lot of comment on how the office market is expected to change. Derwent London said that the full impact of changing working practices brought on by the coronavirus have not fully filtered through yet (Wednesday) and that some companies who have already signed long leases will sublet space they don’t need for big discounts, making it harder for the likes of WeWork etc. to attract tenants at decent prices. There was also speculation that demand for centrally-located high-rise office buildings with lifts will change to lower-rise offices in the suburbs (Thursday). Working from home is making some companies rethink their office porfolio – BP is currently doing a global review that could see it cut around 50% of its current footprint (Wednesday) and US company REI is now trying to sell off a purpose-built office building before it’s even moved into it (Thursday) as it wants to pivot the workforce to working more from home!
• IN WAREHOUSING, we saw that Amazon has been a big buyer of warehousing space globally (Thursday) and that they are allegedly in talks with America’s biggest mall landlord, Simon Property Group, to potentially turn some malls into Amazon distribution centres (Monday)! It just goes to show that landlords with emptying properties are going to have to think creatively…

I define coronatrends as trends of behaviour that stem from the outbreak of the coronavirus. This week, they have continued to evolve thus:

• WORKING FROM HOME  gives us more time (Thursday), but we are also ordering more Domino’s (Wednesday), more takeaways from Just Eat (Thursday) and more meal kits from HelloFresh (Wednesday), something that rival Gousto also confirmed recently. We have also been more conscious about cybersecurity and Avast, the company behind AVG, is doing well
• IN OTHER NEWS, Apple and Google took Fortnite off their respective app stores (Friday) in response to Epic Games’ rebellion against their respective current in-app policies. Pressure is building about their dominance of apps and whether they are acting competitively. Given Apple’s lawyers are on a roll now having beaten Margrethe Vestager, I wouldn’t bet against them coming out of this smelling of roses either!

• Watson’s Yearly updates: watch this space!

My favourite stories this week were quite tame! I really liked the very cool kit in Japanese Brazillian BBQ restaurants offering take-out disposable grills made of cardboard (SoraNews24, Master Blaster) and actually felt quite emotional at Stray dog who keeps visiting car dealership is adopted by staff and given a job (The Mirror, Luke Matthews).

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.

• TikTok was definitely the star of the week! There were rumours over the weekend that Trump was not endorsing any deals (Monday) but he subsequently changed his mind saying that negotiations with any interested party should be concluded with ByteDance by or around September 15th. This was the first time that Microsoft had officially acknowledged that it had been in talks and the talks cover the business in the US, Canada, Australia and New Zealand. Later on in the week, there was speculation that a deal would encompass all of TikTok’s overseas business (Friday), which would be pretty incredible as it would also include India where it was banned recently. The US and India are TikTok’s biggest markets! Meanwhile, talks resumed about a London HQ for TikTok (Tuesday) after being suspended recently due to the trickiness between the US and China and ByteDance’s chief exec was criticised in China for caving to Trump’s demands (Wednesday). The longer TikTok is in limbo, the more ground rivals such as Triller, Byte and Facebook’s Reels are going to make
• Trump started the week by saying that he was going to broaden his clampdown on other Chinese tech companies (Monday) and then he actually followed through with that with some executive orders towards the end of the week (Friday). Tencent’s share price fell in trading on the news but Tencent crackdown poses threat to US champions from Apple to Nike (Financial Times, Christian Shepherd, Yuan Yang and Kiran Stacey) makes the excellent point that the crackdown could also affect companies like Apple if it is forced to pull the app from its App Store. The plot thickens!

• It was all rather tricky again on the UK high street this week. Dixons Carphone said it was cutting 800 managers (Wednesday), WH Smith said it was cutting 10% of its staff (Thursday), William Hill is closing 119 stores (Thursday), River Island is considering a CVA (Thursday) and Pizza Express is also having problems as well (Wednesday). Interestingly, rival pizza purveyor Franco Manca is looking to expand (Friday). Fulham Shore owns Franco Manca and the Real Greek and its current top dog, David Page, is the one responsible for Pizza Express’ massive expansion in the 90s
• Given the ongoing carnage in the retail sector, it was interesting to see that retail landlord Hammerson is changing the way it charges rents (Friday). Like some other landlords, it is moving towards basing rents on tenants’ turnover rather than charging a flat fee every quarter no matter what
• I thought that it was interesting to note, on the consumer side of things, that there’s a lot of movement re the two main “big ticket” items that people buy in their lives – houses and cars. Purple Bricks said that it saw a major uplift in property listings (Tuesday) following Sunak’s raising of the stamp duty threshold and the SMMT said that new car registrations were up by 11% in July year-on-year (Thursday). Don’t get the Bolly out yet, though – we need to see those listings turning into sales and, with regard to cars, July and August are generally quiet months because many people wait for the new registration plate in September. This means that yearly comparisons can look overly generous – so this although this is good news, it’s still a bit early to start celebrating!

I define coronatrends as trends of behaviour that stem from the outbreak of the coronavirus. This week, they have continued to evolve thus:

• AT HOME – it seems that we have been getting all crafty as Hobbycraft saw a 200% boost in online sales since the start of the pandemic (Monday) and we’ve also been watching loads of telly as Disney’s streaming service was about the only highlight in some dismal results (Wednesday). We’ve also been using our Switch consoles rather a lot as Nintendo’s profits surged by an astounding 541% (Friday), with online game downloads being a particular highlight
• AWAY FROM HOME – the recently-imposed travel restrictions/new quarantine requirements have meant that European travel has taken a battering, meaning that Hays Travel, the company that bought Thomas Cook travel shops last year, announced it was to cut 900 jobs (Tuesday), while Brits have been lapping up a bit of staycation action (Monday), according to new Visit Britain figures. Cruises have taken another blow as a number of passengers and crew contracted coronavirus on a ship (Tuesday) but EasyJet appears to be keen to increase the number of flights over the summer (Wednesday), presumably to service travellers who don’t mind a bit of lockdown at the end of their holiday
• AND THE COMPANY-OF-THE-WEEK-AWARD goes to Segro, the warehouse landlord! It’s interesting to see that the valuation of the humble landlord of warehouses is now 45% higher than the combined market cap of British Land and Land Securities (Thursday)!

• Watson’s Yearly updates: watch this space!

This week, I quite liked the Japan’s sushi that’s actually cake fools the eyes, blows the mind, pleases the stomach (SoraNews24, Casey Baseel) story as well as the rather bizarre No escape from the terror with Japan’s new haunted Ferris wheel (SoraNews24, Casey Baseel). Not great if you are claustrophobic, I guess!

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 latest official figures showed the biggest quarterly GDP contraction since WWII (Friday) which is presumably one of the reasons behind Trump mooting the prospect of delay in US election (Friday). He says it’s because more mail-in ballots due to the coronavirus mean a higher liklihood of fraud. I say it’s because he thinks he can’t win! I have never heard of a politician putting off an election if they think they can win it! The key thing to remember here is that he doesn’t have the power to delay the election – any change have to be put to the vote in both the Senate and House of Representatives
• IN EUROPE – Unexpected travel restrictions were suddenly imposed on Spain (Monday), which caused chaos and bad feeling all round. Share prices of exposed companies such as Tui, EasyJet, IAG (the owned of British Airways) and Lufthansa fell sharply as a result (Tuesday) but Ryanair appears to be in a better financial position than others and has said it will continue to fly to Spain (for now, at least). Although this will probably make many people reconsider any international holiday plans for at least the rest of this year, it may be possible that things will actually be better than the dire predictions suggest because anyone who goes on holiday now who has been predominantly working from home anyway may find that this latest development doesn’t make much difference to them and could actually lead to more bargains being available – assuming, of course, that they can actually get to their destination. I think this will be particularly good for Airbnb as people will still want to get out of the confines of home – they just won’t travel so far to get that escape!
• IN THE UK – BoJo announced junk food ad bans (Monday) that will involve a 9pm watershed and total online bans. This feeds into the general push for getting healthier and there is also a move to put calories labels on drinks and menus. As you can imagine, the smaller chains are complaining (understandably) because it will increase their costs at a tricky time. I wonder that this move was always on the cards anyway (the government has been moving in this direction for a while) and they picked now because the whole industry is not in a strong position to do anything about it. The whole thing about coronavirus sufferers getting it worse if they are obese also gives the arguments extra oomph

• Big Tech chiefs of Amazon, Apple, Facebook and Google testified in front of Congress (Wednesday) and were accused of having “too much power” (Thursday), but Congress can’t really do anything about it apart from vent. Meanwhile, Amazon, Apple, Facebook’s results were stellar (Friday) but Google’s parent Alphabet actually weaker quarterly revenues versus the previous year for the first time ever. Congress will be publishing a report later this year once the hearing is over – and it could be that future regulation covering Big Tech will be based on its recommendations
• The TikTok uncertainty continues (Thursday) as there was talk of groups of US investors trying to buy it out of Chinese parent company ByteDance in exchange for a non-voting minority share. Trump batted away such chat on Friday night, saying that he was going to go ahead with a ban whatever. Interestingly, Microsoft has been in talks with ByteDance for a while. Call me cynical, but this could definitely be portrayed as Trump doing his bit to help an American company buy a Chinese company on the cheap! ByteDance are understandably frustrated, but I wonder if they can really do anything other than take the Trump medicine. In the meantime, Facebook is trying to take advantage of the uncertainty as it is offering TikTok creators money to switch to their copycat forthcoming new service, Reels (Wednesday)
• Spotify announced rising user numbers (Thursday) as it continues to grow its podcast offering – an area that is growing in popularity

I define coronatrends as trends of behaviour that stem from the outbreak of the coronavirus. This week, they have continued to evolve thus:

• WORKING FROM HOME – is set to increase for one major company at least as Google said it expected its staff to be working from home (WFM) until summer 2021 (Tuesday). WFM is also set to have an impact on office demand as the Royal Institute of Chartered Surveyors’s latest survey shows that 90% of estate agents and landlords expect firms to reduce their office space in the next two years (Thursday) and rents are expected to be weaker. Whilst at home, it seems that we are indulging in more DIY (Wednesday), which is helping the likes of Travis Perkins (owner of Wickes and Toolstation) and cooking more as meal kit producer Gousto is taking on 1,000 more staff (Monday) to keep up with demand. We’re ordering more online, which is helping the pricing power of UPS and FedEx (Thursday) and we’re also using more cleaning products that are made by Reckitt Benckiser (Wednesday). Reckitt Benckiser owns brands including Dettol, Cillit Bang, Harpic etc.

• Things are still tough for many of the high street retailers out there. Fortunately, previously deaf landlords are starting to listen as Capital & Counties and Legal & General are increasingly offering rents based on turnover (Thursday) rather than the previous flat rate that rose every year no matter what. Maybe this will become more the norm – although whether or not they will slide back into old practices when the outbreak dies down is another question. Overall, though, the latest survey of business leaders by the Confederation of British Industry (CBI) shows that UK retail sales grew at their fastest pace for over a year in July (Wednesday). There was another interesting development in that the government is thinking about imposing a new online sales tax as part of a major overhaul of the current business rates system (Tuesday). High street retailers in particular have been banging on about the fact that they can’t compete with online retailers on price because of overheads that include business rates. As things stand, the proposals will mean that this is an additional tax on top of business rates, so that is likely to go down like a bucket of cold sick with retailers who are already suffering…
• In the “winning” corner this week, Aldi is hiring (Thursday), B&M reported strong quarterly like-for-like revenue growth and forecasts a decent summer (Wednesday), Games Workshop has been coining it in (Wednesday) and Next delivered a surprisingly robust quarterly performance (Thursday)
• On the other hand, Pizza Hut was flirting with insolvency (Thursday), Selfridges cut 14% of its employees to save cash (Wednesday) and Baird Group, the owner of Ben Sherman, Suit Direct and Jeff Banks announced plans to close over a third of its stores and renegotiate rent with landlords (Monday). It had filed for a CVA last week and was hit particularly badly by store closures at Debenhams, where it had a lot of concessions. Amazon put the fear into supermarkets as it announced free grocery delivery to Prime customers (Tuesday). Meanwhile, John Lewis is trying to think of ways to get out of its current rut (Friday). Potentially radical plans include turning its closed outlets into homes, launching a new gardening business and agreeing new product distribution channels…

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories of this week involved the particularly resourceful individual in Woman casually wears KFC box as makeshift face covering while out shopping (The Mirror, Courtney Pochin) and the unashamedly sentimental Builder leaves heartwarming note for customer’s six-year-old and ‘makes his day’ (The Mirror, Paige Holland). Ahhh 😍!

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

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• This was a big week for Europe. Although things were looking a bit tricky for a while, everyone came to an agreement on the European bailout proposal eventually (Tuesday). The overall package was still $750bn, but the proportion of grants versus loans changed (grants were reduced) and the “Frugal Four” became the “Frugal Five” with the addition of Finland. Brussels now has the power to raise a huge amount of money and then dole it out as it sees fit…

• Tesla managed to report a fourth consecutive quarter of profits (Thursday), which means that it is now eligible for entry into the S&P500. It’s come a long way since it was founded in 2003! It’s amazing how a car company that sells b*gger all cars has grown this big – but when you have a crazed (remember the “paedo guy” comment he made about one of the Thai cave rescuers a few years back??) genius at the wheel, everyone wants to go along for the ride 😂 It will be doing a lot of hiring from now on for its new Texas production facility (Friday)
• Given Tesla’s massive share price rise, everyone else is desperately trying to play catch-up with their own electric vehicle (EV) offering (Monday). GM said last week it’s developing 20 new electric models by 2023 (including an electric Hummer, no less!), Ford is selling an electric Mustang SUV and Jeep is preparing to bring out an electric Wrangler! It’s all going on!
• Then Fiat Chrysler Automobiles (FCA) signed a deal with Google’s Waymo to use its driverless tech (Thursday), thereby ending the company’s 18-month relationship with Amazon-back Aurora. Waymo is widely thought to be most the most advanced among its rivals on driverless tech

• Given all the US vs China vs The World stuff going on at the moment, it was hardly surprising to see that TikTok suspended plans to build a UK HQ (Monday), but then the rhetoric intensified as it turns out that venture capital firms General Atlantic and Sequoia Capital have been talking to the US Treasury and other regulators about the possibility of buying TikTok out of current parent ByteDance (Thursday) and giving it a minority stake with no say in the business. There is a debate going on right now about imposing a ban on TikTok in the US due to data security concerns and, at first glance, it would seem to me that this could be the least bad option for ByteDance. Get the popcorn – this could get interesting
• In other social media news, Snap reported slower revenue growth for the second quarter (Wednesday) but it added that advertisers were starting to spend more. It increased its user base by 4%. LinkedIn announced that it would cut 6% of its staff (Wednesday) due to falling demand for its recruitment service. Twitter added users but saw ad revenues fall (Friday) 
• Microsoft reporting higher revenues (Thursday) although profit margins took a bit of a hit due to the company investing more money in its cloud computing capacity. Microsoft and Slack are now engaged in a lawsuit (Thursday) as Slack says that that Microsoft unfairly bundles its rival Teams app with Office 365. It alleges that Microsoft is “force-installing it for millions, blocking its removal and hiding the true cost to enterprise customers”
• The EU regulators are looking closely at the Google/Fitbit deal (Friday) and want it to make a number of concessions for the $2.1bn acquisition to go ahead otherwise it will engage in a more prolonged investigation

• Tesco is cutting contract cleaners (Wednesday) at 2,000 stores from August 24th as the company tries to reduce costs
• M&S cut 950 jobs (Tuesday), which will mainly affect those working at HQ and middle management
• Ted Baker announced it would cut 25% of its workforce (Monday) as part of its restructuring – but it did do well in online sales (Wednesday)

The coronavirus is resulting in a number of ongoing trends (“coronatrends”) as per the following:

• House prices are rising, according to Rightmove (Tuesday) due to pent-up demand (the whole market stopped under lockdown), Rishi Sunak’s recent changes on the stamp duty threshold and (possibly) people being more willing to move to the ‘burbs in order to get more space because they may be working more from home and/or want some home office space
• Secondhand car sales are increasing (Tuesday) to the extent that car dealers are buying from individuals in order to keep up with demand. Demand is particularly strong for cars priced under £5,000 – presumably because people are buying a “commuter” vehicle due to the increased desire to avoid public transport…
• …which is having repercussions on bus companies like Stagecoach, which is planning job cuts (Thursday) due to the market continuing to be dire – something mentioned by rival FirstGroup recently
• Kingfisher is also benefiting from lockdown DIY (Thursday). It’s all good now, but the company (which owns B&Q and Screwfix) is unclear as to what will happen for the full year
• It turns out that some people (with money!) have been killing the lockdown boredom by indulging in a bit of online trading (Friday) or buying incredibly expensive stuff from the likes of Sotheby’s and Christie’s (Friday)!

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories of this week chronicled delivery shenanigans in Delivery driver leaves man in tears with note on where to find ‘hidden’ parcel (The Mirror, Luke Matthews) and how to make the ever-popular garlic and herb dip you get from Domino’s in Man shares simple replica recipe for Domino’s famous Garlic and Herb dip (The Mirror, Paige Holland). Actually, I made this for my kids on Friday night when we had shop-bought pizza – and it worked really well!

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 GDP for the second quarter was up by 3.2% (Thursday), making it the first major economy to return to growth since the beginning of the pandemic
• In Russia – President Putin announced the six-year postponement of a massive spending plan (Tuesday) he suggested two years ago. The $360bn National Projects Plan will now be delayed and the announcement comes only two weeks after a vote that allowed him to stay in power until 2036!
• In Europe – President Duda was re-elected as president of Poland (Tuesday), the European summit to discuss the proposed €750bn bailout plan started at the end of the week (Thursday) – but apparently it’s not going well – President Macron pledged an additional €100bn to stimulate France’s recovery (Wednesday) on top of the €460bn already allocated for the task and Margrethe Vestager got a massive kick in the teeth (Thursday) as Europe’s second highest court rejected a 2016 Brussels competition ruling that ordered Apple to hand over €13bn that she had imposed. This will dent her reputation badly and it will cast serious doubt over the power of Europe’s competition watchdog
• In the UK – Economic output was up (Wednesday) but was well short of market expectations. UK inflation was up (Thursday) for the first time this year, but I would caution too much reliance on these figures as accurate data under covid has been hard to come by. Boris Johnson announced a ban on all new Huawei equipment (Wednesday) and telecoms operators were ordered to rip out all existing Huawei equipment from their networks by 2027
• Opec and Russia are to increase oil production again (Thursday) after the cuts made at the beginning of the year appear to have done their job in raising prices from major lows. It seems that they are confident that rising demand from a world emerging from coronavirus hibernation will be able to absorb more supply without denting prices. It’ll be interesting to see how things go but the market seems to be taking it quite well at the moment

• On the consumer side of things, Nationwide re-introduced 90% mortgages (Tuesday) only a few weeks after taking them off the table as they clearly want a piece of the action. There are additional strings attached but Sunak’s raising of the stamp duty threshold means that a £4-500,000 house will cost you around £15,000 less than it would have done before the changes were made. Interest in living in the suburbs has picked up as a result (Wednesday). Elsewhere, although Sunak cut VAT from 20% to 5% for the hospitality industry, not all businesses will pass all of the benefits on in reduced prices to customers (Wednesday)
• There was a lot of news on online retailers this week with Ocado doing well from lockdown (Wednesday) but missing out on more upside because it couldn’t move quickly enough and AO World benefiting from big demand in TVs, chest freezers and other goods (Wednesday) although Boohoo’s shares took a tumble because of ongoing worries about dodgy suppliers (Tuesday) but the company’s directors bought more of their own shares on the dip (Friday), potentially implying that they are confident they can get through this dodgy supplier scandal relatively intact. Quiz suspended one of its suppliers (Tuesday) as Asos cut ties with a number of suppliers (Wednesday) but it added that it had performed well overall in terms of sales because they sold more “athleisure” gear that is more forgiving size-wise, which meant that returns were lower. The cost of returning goods has been a major problem for many online apparel retailers, so this was obviously a boon. In offline retail news, it appears that Next is close to buying Victoria’s Secret (Thursday), having beaten competition from the likes of M&S and others

• In the pharmaceuticals sector, both Moderna (Wednesday) and AstraZeneca (Thursday) took their respective coronavirus drugs to the next stage, which led to strong share price rises for both companies. Fingers crossed that they will succeed! We are bound to see volatility in pharmaceutical stocks as their coronavirus drugs progress or fall by the wayside
• There were some interesting developments regarding India this week. First of all, Google said that it would invest over $10bn in the country over the next 5-7 years (Tuesday) via an India Digitalisation Fund to get more people access to the internet. Google then announced a $4.5bn investment in Reliance Jio (Thursday), joining a host of other Big Tech companies eager to get a foothold in what many see as a market with huge potential
• Social media also saw some big stories this week what with Europe rejecting the current data-sharing agreement with the US (Friday), Twitter being hacked (Friday) and TikTok’s parent ByteDance being under review from being on America’s “entity list”. Apparently the final decision will be made within a month

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories of this week were the rather nostalgic Lego Nintendo Entertainment System lets you ‘play’ Mario on a TV made of blocks (Tech Radar, Stephen Lambrechts), and Ramen face mask from Japan fogs up your glasses, looks like a steaming hot bowl of noodles (SoraNews24, Oona McGee)for its sheer brilliance!

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 EU cut GDP growth forecasts (Wednesday) versus what they said in May, setting the scene for the forthcoming meeting with European leaders to discuss the €750bn bailout. The “Frugal Four” (Austria, Denmark, Netherlands and Sweden) continue to dig their heels in. They want the money to be distributed in loans whereas everyone else is being pushing for grants
• Tensions between India and China continue to run high. The $3bn Indian delivery start-up Zomato has been unable to access $100m in funding from Ant Financial (Monday) because it is being held up for approval by the Indian government. There’s a lot of bad feeling between the neighbouring countries following a clash between soldiers on the Himalayan border recently and there’s a lot of tit-for-tat going on, of which this is undoubtedly a part. The cold hard truth of the matter, though, is that over 60% of India’s unicorns (private companies with a valuation of over $1bn) are funded by cash-rich Chinese tech companies, such as Tencent and Alibaba, and venture capital funds. It is my opinion that the current spat is a short-term issue because, put bluntly, India needs China’s cash and Chinese companies need India’s growth
• The other big event this week was UK chancellor Rishi Sunak’s unveiling of economic stimulus measures (Thursday) which included things like cutting VAT from 20% to 5% for the hospitality sector, a £2bn fund to finance jobs for young people, £1bn for job centres and the raising of the stamp duty threshold to £500,000. He obviously came in for criticism from those who didn’t feel the love (completely understandable) but he’s never going to get it completely right. We’ll just have to see whether these measures are enough to encourage consumers to spend, avoid the worst of youth unemployment and stimulate the property market!

• Household savings rates continue to rise, but central banks have to work out why they are saving (Monday). They have to ascertain whether households are building up funds, really want to spend but have just been unable to (“involuntary saving”) or whether they are saving to build up funds for future “rainy days” (“precautionary saving”). If it turns out to be the former, then money will hit the high street but if it is the latter, there will be a problem because people won’t spend and inflation will crater. In reality it’s probably a mix of both – but judging this correctly will be key to getting any stimulus right. In the UK at the moment, unofficial figures say that consumer spending is down (Friday), but official releases won’t be out for a while yet
• Buy-now-pay-later specialist Klarna has launched a campaign to caution against people buying what they don’t want (Thursday)! Potential users of its service will be encouraged to ask themselves “Do I love it? Will I use it? Is it worth it?” before buying. Given that the company boasts that its services increase sales by 20% I think it is amazing to hear them embarking on this campaign. It is just my opinion, but I do wonder whether they are actually very concerned about mass potential defaults and are using this campaign to mitigate future potential problems
• In RETAIL, footfall on the UK high street has increased (Tuesday) – which is pretty obvious considering that the shops have just opened – but the nightmare for high street players continues. Pret announced cuts of 30 stores and 1,000 jobs (Tuesday) while Boots and John Lewis cut jobs and outlets (Friday). This is in addition to the 40,000 retailing jobs already lost so far this year 😱
• The other major retail story this week was of Boohoo, which has been riding high recently. A Sunday Times reporter infiltrated a Leicester factory that was thought to be one of Boohoo’s suppliers and found that workers were being paid way less than the minimum wage. To cut a long story short, Boohoo’s share price fell by a third as investors panicked, the company implemented a number of measures and the share price traded up by 27% the day after a call was held to calm investors (Friday). Will other purveyors of cheap fashion get caught up in this as investigations unearth new information?

• The EU is embarking on a push on content, competition and taxes on Big Tech companies (Monday), which has been expected. It’ll be interesting to see what this brings and whether it will become a template for other countries and regions
• So far, Facebook, Twitter, Google, Zoom and LinkedIn (owned by Microsoft) are considering what to do about their presence in Hong Kong (Thursday) given the implementation of China’s new security law. This will be a delicate balancing act because if they get it wrong, China will no doubt implement some painful retaliatory measures

• There have been a lot of knock-on effects with the advent of lockdown. PC sales have increased as more people work from home (Friday), TfL is suffering because everyone’s afraid of going on the Underground (Friday) and people are avoiding buses and trains – not great for a company like FirstGroup (Thursday). Conversely, Halfords is benefiting from more people getting on their bikes (Wednesday)

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories of this week were Pizza Hut unveils bizarre ‘Pie Tops’ shoes that let you order takeaway at the tap of a foot (The Mirror, Chris Baynes), which I know is old but it’s just great 😂 – and the heart-warming moment in Three-year-old besties reunite after months apart in lockdown and it’s adorable (The Mirror, Paige Holland). How brilliant is this?!

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.

• Hong Kong saw a new security law imposed from China (Tuesday), the opposition party disbanded (Wednesday) and inquiries on how to leave/get money out of the country shot up (Thursday). The new law applies both to people within Hong Kong and outside it (Wednesday), so foreign sympathisers could be prosecuted on entry to Hong Kong. Although some of its citizens may want to leave, I wonder who would take them? I wouldn’t have thought that surrounding countries would want to annoy China by taking in Hong Kongers and it may be difficult for those further afield because many countries just aren’t in a financial position to take in an influx of immigrants
• Russia’s President Putin will be able to remain in power until 2036 (Thursday) as his constitutional amendments were voted through convincingly. I’d say that this was within expectations despite his approval ratings being particularly weak leading into the coronavirus outbreak
• UK GDP had its worst quarterly fall since 1979 (Wednesday) – but then of course it did (although it does show you how dire things were in 1979!) given everything’s been shut down! On the other hand, Bank of England figures showed that British household savings were very strong (Tuesday), which some will take as a potential sign of a pent-up desire to spend bubbling beneath the surface of Covid-nervousness. The Bank of England’s chief economist, Andy Haldane, said that there could be a sharp recovery (Wednesday) but that depended on unemployment going down and spending going up – not a given, considering that many expect rising levels of unemployment when the government’s furlough scheme peters out. If households aren’t confident about their finances and the economy at that point, they won’t be spending either

• In the US – Apple and McDonald’s were shutting outlets (Thursday) as the number of coronavirus cases climbed in some areas. Pizza Hut’s biggest US franchisee, NPC International, filed for bankruptcy (Thursday) as it failed to get any money out of parent company Yum Brands. It had been in trouble before the whole coronavirus thing kicked off as they blamed the usual things in casual dining – tougher competition, rising minimum wages and higher ingredient prices – and the outbreak has just pushed them over the edge
• In the UK – Byron Burger (Tuesday), TM Lewin, Harveys, Bensons for Beds (Wednesday) and Cafe Rouge owner Casual Dining Group went into administration (Friday). Then the owner of Caffè Ritazza and Uppercrust – SSP – announced it would be cutting 5,000 jobs (Thursday) and Arcadia (owner of Topshop, Dorothy Perkins etc.), Harrods and John Lewis announced 1,200 job cuts (Thursday) – with the latter also looking at potential store closures. Pizza Express said it would withhold rent payments (Tuesday)…
• …and wasn’t alone on that, which was probably the reason why retail landlord Intu went into (#seewhatIdidthere) administration (Monday). It’s interesting to see the difference between the fortunes of landlords exposed more to offices and the ones exposed to the struggling retailers (Thursday). British Land is more exposed to the latter while Hammerson has more exposure to the former
• It wasn’t all bad, though – Frasers Group (formerly called Sports Direct) lifted its stake in Hugo Boss (Tuesday) from 5.1% to 10.1% and Primark’s sales did well on store opening (Friday)

• Facebook continued to get flak for not doing enough to stop the spread of hate speech (Monday), but the irony is that Twitter will probably suffer more as it is much smaller and will miss the ad revs more (advertisers are boycotting online ads this month). TBH, although Twitter took the high road recently on the spread of inflammatory news, it still has its fair share of cyber-bullies, trolls and weirdos. Zuckerberg believes that the companies will return soon enough – and I think he’d be right. If you are cutting your advertising budget, it is hard to ignore the attractions of more targetable digital advertising – and Facebook is where you want to be
• India blocked a number of Chinese apps (Tuesday) in retaliation for the recent violence on the Himalayan border. Six of the top ten downloaded apps in India are from Chinese companies – and this includes TikTok and WeChat. This won’t be great for the Chinese apps affected as they see India as a huge growth market

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories this week were Dog shows off hilarious toothy grin after stealing false teeth from drawer (The Mirror, Luke Matthews https://tinyurl.com/yd8n6q9b) and the highly addictive and impressive taekwondo dance where everyone looks like they should be in a girl/boy band!

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

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• It was interesting to note this week that the gap between the Nasdaq (tech companies) and the Down Jones and S&P 500 is the widest it’s been since 1983 (Wednesday), which suggests that Big Tech performance is behind much of the recent market uplift, although some argue that it’s not just tech that’s involved in any rallies (Monday)
• Business activity decline is slowing down in Europe and the UK (Wednesday) according to the latest IHS Markit PMI survey. It’s worth noting that these are surveys and thus gauge sentiment – so you do need to see some cold hard figures from other sources before you get too excited. Still, it’s going in the right direction at least!
• The UK is trying to hammer out a trade deal with Japan in super-quick time (Tuesday) – these things normally take years but Japan wants to conclude talks by the end of 2020! The UK also heeded recent European advice and made foreign takeovers of key UK assets harder (Monday)
• Lockdown easing is now stretching to international travel, with “travel corridors” between Asian countries and European ones (Thursday). The UK is also considering the same (Tuesday). Meanwhile, the carnage continues in the air travel industry as Qantas announced 6,000 job cuts and the grounding of 100 planes (Thursday), British Airways announced cuts of up to 20% to cabin crew wages (Friday) and Easyjet raised £450m by issuing new shares (Thursday) in a bid to get itself some “emergency money”

• The whole Wirecard thing is just getting ridiculous. It has now filed for insolvency (Friday) and it seems to me that the German regulator and longtime auditor EY are going to come in for an almighty amount of criticism. I almost wonder whether this will do to EY what Enron did to Arthur Anderson almost 20 years ago
• WhatsApp Pay got a nasty surprise (Friday) as it got suspended in Brazil by the central bank only days after announcing its rollout! Banks all got together to complain about it and it seemed that the central bank freaked!

• UK shoppers returned to the high street (Thursday) and pubs and restaurants are among those asking for VAT to be cut to 5% (Thursday) in order to help them out. JD Sports let Go Outdoors fall into administration (Monday) and then bought it out again (Wednesday). Amazon finally had the acquisition of its 16% in Deliveroo approved (Thursday) after a year-long investigation by the UK’s CMA (what a waste of time that was!). Meanwhile, retailers withheld rent payments to landlords (Friday), which was the last straw for retail landlord Intu. It entered into administration after not being able to come to an agreement with lenders over its massive debts
• Over in the US, Albertsons’ IPO underwhelmed investors (Friday) as its flotation price wasn’t set at the top of the range. America’s #2 supermarket by outlets started trading on Friday but fell by 3.4% into the close. After all the recent feel-good IPOs that rocketed up 60% and 90%, Albertsons’ one brought everything back to reality. Investment bankers eager for fees will hope this is a blip and not a sign of things to come…

• Zoopla forecast a bump up and then decline for residential property prices (Wednesday) as pent-up demand from lockdown runs its course and consumers get increasingly concerned about their jobs and financial situations in the coming months
• Demand for office space is likely to suffer (Wednesday) as a result of more people working from home and ongoing social distancing restrictions. Companies will be rethinking their future office requirements to take into account altered working practices

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” stories of the week both had their origins in Japan – and they both involve “frightening” fun! There was this idea of a haunted drive-in: Coronavirus leads to the creation of haunted drive-in in Tokyo this summer (SoraNews24, Casey Baseel https://tinyurl.com/y7k8xolg) which looks superb (if a little messy!) and then the restrained terror in No screaming allowed on Japanese roller coasters, and new video shows it can be done (SoraNews24, Casey Baseel https://tinyurl.com/y7g2x66r). Interesting to note that the guy on the right (the president of the theme-park’s parent company!) seems to be rather concerned about his hair being out of place. I guess if you are not screaming, you need something else to focus on 😂!

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 reiterated his caution regarding an economic recovery (Wednesday), but on the other hand, Trump promised a $1tn infrastructure project (Wednesday) to help stimulate jobs and investment over a period of ten years. TBH he can say what he likes – it’s over a very long period of time and he might not even be there to oversee it! He wanted to encourage the building of roads and bridges. However, there was no word about walls with Mexico, though 😂
• IN CHINA – industrial production improved – but fell short of market expectations (Tuesday) and household consumption was disappointing (Tuesday) as consumers remained cautious about spending
• IN EUROPE – president Macron lifted most lockdown restrictions (Monday) so all French schools will open fully for compulsory attendance from June 22nd. Bars and restaurants will now be fully open (they have been restricted recently to serving customers outside) and travel within Europe will return to normal while international travel will start from July 1st
• IN THE UK – inflation fell to 0.5% (Thursday) as consumers just aren’t really buying much at the moment and the Bank of England injected a further £100bn into the economy (Friday) to get it going in order to avoid the much-feared-yet-expected prospect of mass-unemployment when the furlough scheme comes to an end

• The German government paid €300m for a 23% stake in biotech firm CureVac (Tuesday), heeding recent advice for European nations to take stakes in key companies to avoid foreign takeovers
• The FDA withdrew emergency Covid-19 use approval for chloroquine and hydroxycholoquine, taken by Trump (Tuesday) because they have now been deemed to be ineffective for treating Covid-19
• Royalty Pharma was the latest IPO to fly (Wednesday) as its share price shoot up by 60% on its debut, continuing the current IPO feel-good factor going on at the moment
• Then British scientists discovered a cheap and widely available generic steroid significantly cut Covid-19 mortality rates (Wednesday) called dexamethasone

• There was a lot of transatlantic pouting going on this week as the US abandoned talks with the Europeans to sort out a digital tax (Thursday) to force Big Tech companies to pay tax where they make their money, but the Europeans remained defiant (Friday). The US threatened to punish any countries that just went ahead and implemented their own digital services taxes
• Apple faces an investigation by the EU competition commission (Wednesday) following allegations that it has breached competition rules after years of niggle from Spotify and other regulators. The allegations concern Apple forcing apps to pay them a 15-30% cut as well as a ban on telling users other ways of paying for the digital content. If it is found to be in breach, Apple could be fined up to 10% of its global turnover
• Facebook launched WhatsApp Pay in Brazil (Tuesday) enabling Brazilian WhatsApp users to transfer money to each other for free and make purchases from small businesses all within the app itself. The company has plans to roll out the service to Mexico, Indonesia and India as it looks like it trying to move towards a “super app” model as per Tencent’s WeChat

• IN FINANCE-RELATED NEWS – Mastercard and Visa are facing a humongous bill (Thursday) as the UK’s highest court, the supreme court, ruled that the transaction fees they charge breach competition laws. Fines, which could run into the billions, will have to be paid to Asda, J Sainsbury, Argos and Wm Morrison but there is further legal wrangling to come over the amounts. Nationwide decided to triple the amount it demands for a mortgage deposit (Thursday), which is unsurprising given the uncertain state of the UK real estate market at the moment and the very real prospect of many loans going bad and then there was disaster at German payments-processor Wirecard which announced that €1.9bn was missing from its accounts (Friday). The company processes tens of billions of Euros each year but has faced scrutiny over its accounting practices over the last 18 months
• The UK’s Cineworld is being taken to court for backing out of the acquisition of Canada’s Cineplex (Tuesday). The acquisition was announced before the coronavirus outbreak. Cineworld is basically saying that things have changed and Cineplex is saying that they want to stick to the terms of the deal. Expect loads of this for the forseeable future as deals negotiated in the bull market leading up to the outbreak unravel
• It’s also interesting to see that Ikea (Monday) and paper and packaging company Bunzl (Tuesday) are planning to pay back the furlough money as they’ve actually traded better than they had thought through the outbreak. It’s good to see companies “do the decent thing”, but I would imagine this kind of action will be the exception rather than the norm

• Watson’s Yearly updates: watch this space!

My favourite “AND FINALLY…” story this week are Cuban dons full-body cardboard shield against coronavirus (Reuters https://tinyurl.com/y9yrsrpb) and the brilliant Dog owners share hilarious photos of unrecognisable pets after they find mud (The Mirror, Luke Matthews https://tinyurl.com/y8xwnrv7). I can identify with that!

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)