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. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• Trump kicked off the week with threats of $200bn in extra tariffs (Monday), although he let Apple off (Tuesday) despite virtually all of their gadgetry being made in China. China retaliated (Wednesday) and it now looks like it will be cutting tariffs to non-US countries (Friday) although we don’t know the details yet. Alibaba founder Jack Ma doesn’t like what he’s seeing and said that Alibaba would not follow through on its promise to create one million American jobs (Thursday) because of the recent deterioration in US-China relations.

• There was talk of the DoJ opening a criminal investigation into Tesla (Wednesday) re that whole I’m-taking-my-company-private thing and the Saudi Arabian Public Investment Fund (PIF) sovereign wealth fund put $1bn into Tesla rival Lucid Motors (Tuesday) although it does sound some way behind Tesla (Wednesday).
• Ferrari made a big fanfare about the electrification of its future models (Wednesday) but stopped short of making anything that was purely electric. Meanwhile, Aston Martin is aiming for a top end valuation (Friday) for its forthcoming Initial Public Offering. Meanwhile, Jaguar Land Rover had to go to a three-day week (Tuesday) due to sluggish sales.
• Korea’s Hyundai Motor announced plans to produce the world’s first commercially available hydrogen powered truck (Friday) next year. It said it would begin the rollout of 1,000 fuel cell trucks in Switzerland as part of a five-year agreement with Swiss hydrogen company H2 energy. Supporters of this technology believe that it is better suited to heavy vehicles travelling long distances versus 100% electric vehicles that face shorter ranges, long refuelling times and battery degradation.

• The week started off with Amazon employees being investigated for data-leaks-for-bribes (Monday) involving staff selling data to companies wanting to get ahead of the competition. Then news came out that the EU was doing a preliminary investigation looking at the way Amazon uses its data (Thursday) and there was some discussion as to whether the company should split itself into two divisions (Wednesday) – namely retail and cloud businesses – in order to head off any enforced regulatory burdens further down the line. On the plus side, it’s still ploughing ahead with new things (Friday) like a rollout of 3,000 of its cashless stores (an unconfirmed rumour at present), investment in India and a new Alexa-enabled chip that can be put into everyday household devices.

• Cannabis-related news featured a lot this week ahead of legalisation in Canada. Coca-Cola was rumoured to be looking at making cannabis-infused beverages (Tuesday) as part of its diversification away from the fizzy black stuff and then Tilray, a cannabis producer that floated at $17 per share only two months ago, hit $300 (Thursday) on news that it had received approval from the US Drug Enforcement Administration to import one of its products in capsule form to use in a clinical trial to treat a neurological disorder called essential tremor.
• The week ended with some interesting news that Uber is considering the acquisition of Deliveroo (Friday) – but talks appear to be in the early stages. Further consolidation is bound to happen whether this deal goes ahead or not.

TBH it all seemed a bit tame for my liking this week in terms of “bants”, but if I had to choose, the stories I liked most were Uranus Examiner promises to get to the bottom of stories (Metro, Kate Buck https://tinyurl.com/ycwcd6ez) and This is officially Britain’s best lawn (and it took 273 hours to mow) (Metro, Jen Mills https://tinyurl.com/y7dal969)

Have a great weekend! 

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. Clicking on the day will take you to the appropriate edition of Watson’s Daily.

• Sweden got the results of its parliamentary elections (Tuesday) which showed a swing in support for the anti-immigration Sweden Democrats. Although the swing wasn’t quite as bad as originally feared, it was strong enough to leave behind a sticky situation for the remaining centre-left and centre-right parties in forming a government. They really need to sort this before the budget vote, which is due in December
• Although it kind of doesn’t feel like it right now, it was actually a reasonably good week for the UK stats-wise. Wages are going up (Wednesday), job growth in UK manufacturing is at record levels (Friday) and even UK GDP is on the rise (Tuesday). This is good news, but I expect things to calm down the closer we get to Brexit
• The oil price trended higher (Thursday) as global supplies are get tighter. Venezuelan supply has collapsed, Iran can’t take up any production slack because the US is imposing sanctions on it whilst severe outages in Libya and falling supply in Angola are all contributory factors hitting supply just as the US is facing storms that could disrupt the Colonial Pipeline (which runs through the Carolinas) or even the Gulf of Mexico

• Chinese ride-hailing giant Didi Chuxing announced a big loss (Tuesday) for the first half of the year, against a hostile backdrop due to two of its drivers being involved in the murder of their passengers and public calls for greater safety. The fact is that Didi is WAAAAAY bigger than even its nearest rivals and has built itself up into an absolute beast of a company with 550m registered users – more than 50% of all of China’s internet users – and 30m drivers. I think its sheer scale will see it through, but it needs to square away all this bad news right now or it could find itself in an Uber-like nightmare.
• Volvo decided to postpone its proposed initial public offering (Tuesday) to wait for better market conditions. Volvo, which is owned by China’s Geely, had originally pencilled in an IPO before the end of the year but Trump’s tariff shenanigans has obviously put paid to that for the time being. Not a surprise.
• Yet another senior exec has left Tesla (Friday), as the company’s vice president of worldwide finance and operation, Justin McAnear, following the recent departures of its chief of HR, communications director and senior vice-president of software engineering. Things aren’t going great for Elon Musk at the moment.
• Williams is working on a new joint venture with Unipart, called Hyperbat, which will make batteries for electric cars (Tuesday) that are twice as powerful as those currently being put into Tesla cars. The batteries will be for Aston Martin’s first ever electric car, the RadpidE.

• The world’s biggest retailer, Inditex, unveiled a decent set of results (Thursday) against a mixed backdrop for retailers worldwide. It has managed to strike a decent balance between online and offline services, but other apparel retailers have started to copy its model and it is also facing potential headwinds in the form of currency problems given that almost all of its merch is made in Europe but over half of it is sold outside the Eurozone.
• Debenhams hit the headlines a lot this week, firstly batting away suggestions it was in trouble (Monday) and then towards the end of the week Sports Direct had to issue a formal statement saying that it did not plan on making a formal bid for the department store (Thursday) for six months, whilst at the same time reserving the right to make a bid if there was a “material change of circumstances” with agreement from the board or after a bid from a third party. This all happened because one of the senior execs let slip that the board had discussed the possibility of taking it over.
• John Lewis saw its profits fall by a whopping 99% (Friday) as it continues its major restructuring programme. Its “Never knowingly undersold” promise came in for a lot of criticism, although its chairman Sir Charlie Mayfield defended it. I think it is massively outdated and needs to get ditched given the current retail environment.
• Morrisons announced its best sales figures in years (Friday) as the fruits of the turnaround are starting to come through after store revamps, broadening of product ranges and pepping up the online business via its partnerships with Ocado and Amazon.

• The US Federal Drug Administration said it might ban all flavoured e-cigarettes (Thursday) in order to “narrow the off-ramp for adults to close the on-ramp for kids”. Players in this area such as Juul Labs (which has a massive 70% market share in e-cigarettes) will have 60 days to come up with a plan to stop young people starting the habit. Big tobacco companies saw their shares rise because a) they are used to tons of restrictions b) because vaping is only a tiny bit of their overall business and c) they have far deeper pockets than the smaller specialists.

My favourite bit of “bants” this week was about Surrey Police getting down with the kids in Police hope this embarrassing ‘slang dictionary’ will help them engage with young people (Metro, Harley Tamplin https://tinyurl.com/ycqxxm69). Brilliant. Especially the bit about Stormzy!

Have a great weekend! 

 …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. 

• Tariffs garnered more headlines this week as the US announced its latest tariff attack on China (Wednesday), with the latest round covering 279 products (mainly chemicals and electronic parts) worth about $16bn, bringing the grand total of Chinese products covered by new duties to $50bn so far. China retaliated (Friday) with imposing 25% taxes on $16bn of US imports but notably left oil off the list as it is a big user.
• There was quite a lot of needle going around this week what with the US reimposing economic sanctions on Iran (Tuesday) and Saudi Arabia slamming Canada (Thursday) for criticising its arrest of an activist. It decided to show its displeasure via its central bank and state pension funds ordering their overseas asset managers to sell their Canadian equities, bonds and cash holdings “no matter the cost”, amongst a whole host of other things.
• The Japanese economy managed to return to the growth track (Friday) which should help PM Shinzo Abe get elected for another term next month, but Turkey and its currency continued to suffer (Friday) as President Erdogan continues to resist pressure to let his central bank raise rates which would help to arrest the precipitous slide of the lira.

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• …as House of Fraser laboured under a cloud (Friday) only to be bought by Sports Direct for £90m right at the last minute!
• Homebase announced that 60 of its 249 stores are to close (Thursday) as part of a company voluntary agreement to be announced next week with over 1,000 jobs hanging in the balance
• TopShop lost its China online trading partner (Friday) putting a dent in its China ambitions
• …but on the plus side, Ikea announced the opening of its first store in India (Friday) with others to follow. India is likely to be a tricky market for the company, but I think that if it is successful in attracting new local suppliers it could use them to supply shops in other countries and increase margins elsewhere. I suspect that margins in India will be very low.

• …as it all kicked off this week when Tesla founder Elon Musk tweeted “Am considering taking Tesla private at $420. Funding secured” (Wednesday, Thursday – but the tweet was at the beginning of the week). The stock rallied, but not to $420 as the market remained sceptical about whether he’d follow through with it. The SEC is looking into whether his claim of “funding secured” is actually true (and if it isn’t, he’ll probably have to face fines and lawsuits) but, from his side, it seems that no final decisions have been made. I think he should stay public as it keeps him from doing anything REALLY stupid and investors have thus far been a very generous source of cash when called upon – a generosity which might not be quite the same under a private owner. Just ask Travis Kalanick, the founder of Uber who was kicked out of the top job by the company’s biggest investors.

I have two faves from this week’s “…and finally” stories: Ed Balls tasered: Former Shadow Chancellor stunned in shock police video – watch here (Daily Express, Rory O’Connor) and Grandfather uses 11 smartphones attached to a bicycle to play Pokemon Go (Metro, Jimmy Nsubuga ), which is a thing of genius. On a serious note, I recommend that you watch the BBC2 documentary that Ed Balls is presenting – it’s a real eye-opener and he does a great job! 

Have a great weekend!