Category: Uncategorized

1. In M&A AND IPO NEWS, Conoco Phillips buys Concho, Alibaba takes control of Sun Art, Intel sells NAND business to SK Hynix and Ant’s $30bn gets the go-ahead
2. In CORONATRENDS NEWS, Landsec decides to sell a massive chunk of its properties and Heathrow offers rapid checks
3. In INDIVIDUAL COMPANY NEWS, Universal offers up movies, EVs face fire risk and Boohoo loses its auditor
4. AND FINALLY, I bring you an astrologer’s predictions…

So oil Conoco buys Concho, Alibaba takes control of Sun Art, Intel sells off its NAND business and Ant gets the go-ahead for a massive IPO…

Watson’s Daily will be changing its membership structure after midnight on Bonfire Night (November 5th). If you are an existing paying member (or if you take up a paid membership before November 5th), you will automatically be upgraded to SILVER membership in the new structure AT NO EXTRA COST. In other words, it will only cost you £2.99pm to get £4.99pm of value. Why not upgrade now? Subscribing to Watson’s Daily will really help me to give YOU more!

ConocoPhillips to buy rival Concho in $9.7bn deal (Financial Times, Derek Brower and Myles McCormick) shows that ConocoPhillips is willing to gamble on shale ahead of a hoped-for post-coronavirus oil recovery. It will make one of the world’s biggest independent oil producers a major player in US shale and will catapult its status in the Permian, the world’s richest oilfield, to being a serious rival to ExxonMobil. No cash will change hands, as this is an all-paper deal, and the price represents a 15% premium to what Concho Resources was trading at at the October 13th close. This follows two other recent major acquisitions in shale – Chevron agreed to buy Noble Energy in July for $13bn and Devon Energy agreed to buy rival WPX for $12bn in September. * SO WHAT? * Given the M&A activity in this area, it would seem that big oil companies are now confident enough to use the recent decimation of the shale oil industry as an opportunity to get involved. Conoco/Concho: surfing the wave (Financial Times, Lex) highlights this deal as making ConocoPhillips the third biggest US shale producer and that Concho Resources’ wells are not on government land – so if Biden gets in, the company will be unaffected by his promise that there will be a ban on fracking permits on government property. All they need now is for oil prices to go up…

Alibaba to pay $3.6bn to take control of Chinese supermarket chain Sun Art (Financial Times, Ryan McMorrow) shows that the ecommerce giant has

increased its stake in supermarket operator Sun Art Retail Group from 36.2% to 72% and it is currently offering cash to its other shareholders. * SO WHAT? * Funnily enough, the supermarket chain’s share price shot up by 19% on the news as it bought the shares from France’s Auchan Retail International. Sun Art is China’s #2 grocery chain and it has worked with Alibaba on grocery delivery. Alibaba/Sun Art: fresh meat (Financial Times, Lex) highlights the fact that Auchan’s retreat follows the likes of Amazon, Tesco, Carrefour and Metro as yet another foreigner who failed to crack the Chinese market and that this is a good strategic move by Alibaba as part of its plans to combine online and offline capability using big data.

In Intel enters deal to sell NAND memory unit to SK Hynix (Wall Street Journal, Cara Lombardo and Dana Cimilluca) we see that Intel will be selling its NAND flash memory manufacturing business to South Korea’s SK Hynix for about $9bn that will mark a major move in strategic direction for Intel and make the SK Hynix one of the world’s biggest NAND memory makers. Their combined market share was over 20% in Q2 – a level only bettered by Samsung, which has a market share of over 30%. Intel stated its intentions of investing the cash in fast-growing areas like AI and 5G. * SO WHAT? * This is the latest example of consolidation in the semiconductor industry as players go for scale and broaden their product portfolios. For instance, Analog Devices agreed to pay over $20bn for Maxim Integrated Products in July, Nvidia has offered $40bn for Arm Holdings last month and AMD is in talks to buy Xilinx.

Meanwhile, Beijing gives green light for Hong Kong leg of Ant’s $30bn IPO (Financial Times, Primrose Riordan, Hudson Lockett, Mercedes Ruehl and Ryan McMorrow) shows that Chinese regulators have approved the Hong Kong IPO of Chinese payments company Ant Group. At $30bn, this will be the world’s biggest stock market debut (the company itself is thought to be worth up to $318bn). It will raise even more money than the Saudi Aramco float which raised $25bn last year. Ant Group is planning a dual listing in Shanghai and Hong Kong. It is currently awaiting approval from Hong Kong Exchanges and Clearing.

Landsec decides to sell a ton of properties and Heathrow offers rapid testing…

Coronavirus has made a huge dent in the prospects for UK real estate and Landsec to sell almost a third of its £12.8bn property portfolio (The Guardian, Joanna Partridge) shows that one of Britain’s biggest property companies has decided to sell off a load of its properties over the next few years in order to focus more on growth opportunities in cities. Landsec owns the Trinity Leeds shopping centre and Bluewater in Kent, among others, and wants to spend the proceeds on new developments. * SO WHAT? * It’s interesting to see that the company wants to offload some of its hotel and leisure properties as well as

retail parks in order to invest in offices, retail stores and homes. This all sounds great in a way, but the company did not provide much detail in the announcement so it’s difficult to judge the impact. It’ll be interesting to see who actually buys these properties because I would imagine that many rivals will be doing the same, leading to a crowded market and not great selling prices IMO.

Then in Heathrow to offer £80 rapid coronavirus test for departures (Financial Times, George Steer) we see that passengers flying from Heathrow will be able to pay £80 to get tested for Covid-19 and get the results in less than an hour in a purpose-built facility run by private firms Collinson and Swissport. Airlines including British Airways, Virgin Atlantic and Cathay Pacific will be offering this service to passengers in Terminals 2 and 5. * SO WHAT? * This certainly signals a step forward for international travel, but I don’t expect it’ll have much of an effect on its own. Nothing to get too excited about at this stage IMO.

Universal offers movies, EVs face fire risk and Boohoo has a set-back…

In a quick scoot around some of the other news headlines today, Universal tosses cinemas a lifeline while testing new distribution model (Wall Street Journal, R.T. Watson) shows that Comcast Corp’s Universal Pictures is to release an increased number of films going into the end of the year in order that should boost footfall at cinemas. Most studios have been going in the opposite direction and booting releases into next year. * SO WHAT? * Universal will be testing a new strategy of making films available for online rental sooner than ever by releasing low budget films and experimenting with a new distribution model. These are ideal conditions in which to test this sort of thing IMO as in normal circumstances I would have thought that there would be huge push-back from the cinemas. They are now in no position to bargain and so movie studios can experiment to their hearts’ content.

Elsewhere, Auto makers grapple with battery-fire risks in electric vehicles (Wall Street Journal, Ben Foldy) shows that US safety regulators are this month opening an investigation into over 77,000 Chevy Bolts made by General Motors after complaints of battery-related fires. This isn’t great at a time when car sales are making a nervous recovery and EVs are being touted as the way forward. Not disastrous, but not great either!

Boohoo takes a tumble as auditor stands down (The Times, Ben Martin) highlights a 20% hit to Boohoo’s share price yesterday on news that its auditor, PwC, was stepping down. Investors get spooked by this because it suggests that something dodgy is going on, but I would also add that the company had a bit of a run following its Leicester-related problems over the summer. I would say that this is not a drama yet, but it is worth monitoring. Accountants are getting super-sensitive after a spate of dodgy accounts-related disasters.

…in other news…

I thought I’d leave you with food for thought today in Brit astrologer who ‘predicted’ coronavirus says what’ll happen in next 6 months (The Mirror, Zoe Forsey). Hmm.

1. In MACROECONOMIC NEWS, China GDP grows, Europe faces a double-dip and fund managers back Biden to win
2. In TECH NEWS, it looks like Big Tech will suffer whoever wins the election and Facebook could get a big fine
3. In RETAIL NEWS, UK shops close at a record rate and Hamleys cuts jobs
4. In MISCELLANEOUS NEWS, the US appeals to developing nations to supply networks, increasing electric car adoption is leading to a tussle for charging control while Europe is set to decide on vegan “burgers” or discs
5. AND FINALLY, I bring you the latest trend in handbags…

So China’s GDP grows, Europe faces tricky times and fund managers back Biden…

China economy grows 4.9% as rest of world struggles with coronavirus (Wall Street Journal, Jonathan Cheng) highlights the contrast between China’s improving fortunes and the sluggish performance of the rest of the world. Official figures show that GDP growth hit 4.9% in the third quarter versus the previous year. This actually fell short of analyst expectations but the country is nevertheless back on track to be there or thereabouts with growth forecasts made at the beginning of the year of between 5.5% and 6%. The International Monetary Fund (IMF) believes it will be the only major world economy to grow this year. Other official figures showed that unemployment was down and that retail sales are rising.

On the other hand, Europe’s second wave raises threat of double-dip recession (Financial Times, Martin Arnold) shows that Europe’s economy looks increasingly likely to

contract again as Germany, France, Italy, Spain and the UK have all put measures in place recently to control the second wave of Covid-19 infections following a recent rise in cases. Interestingly, Q3 GDP figures are to be published at the end of this month and are expected to reflect record growth in the eurozone – but now economists are starting to cut their Q4 figures. * SO WHAT? * This latest setback is likely to dent ECB hopes that the eurozone economy will bounce back to pre-coronavirus levels by 2022. Most do not expect across-the-board lockdowns given the extent of economic damage that wrought the first time around, but partial lockdowns will certainly slow any progress.

Then in Fund managers overhaul portfolios on ‘blue wave’ bet (Financial Times, Attracta Mooney and Siobhan Riding) we see that portfolio managers including Janus Henderson, Schroders, Invesco and Candrian have said that their portfolios now reflect a loss for Trump in the upcoming presidential election. * SO WHAT? * If this turns out to be the case, monetary easing is expected, Biden is expected to spend big and to invest in green energy. Investors are ditching tech stocks and buying into housebuilders and regional banks as a result.

Big Tech looks like facing resistance whoever wins and Facebook may get a big fine…

Talking about elections, Political rage boils over for US Big Tech amid election (Daily Telegraph, James Titcomb) shows that the likes of Facebook, Google and Twitter in particular are likely to be in the crosshairs of whoever makes it to the White House following the presidential elections – but for different reasons. Republicans complain that the liberals of Silicon Valley are restricting free speech – especially that of ardent right-wingers – and Democrats are more concerned about the sheer economic power of Google, Facebook and Amazon, privacy issues and how they suck oxygen from their competition. * SO WHAT? * So far, the only big fine against Big Tech has been the $5bn

fine from the Federal Trade Commission (FTC) against Facebook for breaching users’ privacy last year. However, the fact that both sides of the political spectrum want to “do something” about Big Tech – albeit for different reasons – would suggest that the next four years is going to be more difficult than the last four as an enforced break up and revision of business models looks entirely possible.

Talking about Facebook, Facebook facing EU fine over child privacy breach (Daily Telegraph, James Titcomb) shows that Facebook may be in line to pay a massive privacy fine in the billions of dollars. Ireland’s Data Protection Commissioner (DPC) has commenced two separate inquiries into allegations that Instagram made the email addresses and phone numbers of users under 18 public. Instagram has a minimum age of 13 but over 20% of British kids aged between 8 and 12 use it. * SO WHAT? * If Facebook is deemed to have breached European data protection laws, Facebook may have to pay a fine of up to 4% of its annual revenue. Ouch!

UK shops close at a record rate and Hamleys cuts jobs…

Carnage on the high street continues in Stores close at record rate as shoppers change their habits (The Times, Gurpreet Narwan) as a study by PwC showed that shops closed down at a record rate during the first half due to the outbreak. Although things have improved over the summer, tightening restrictions on socialising and movement are likely to continue to weigh heavily on the UK high street.

Interestingly, over 5,000 shops actually opened during the first half of this year, which would imply that there is still some demand in there for physical shops.

Hamleys to cut more than a quarter of London staff (The Guardian, Zoe Wood) is another sad reflection of what is going on in retail at the moment as the toy specialist announced it would be cutting over 25% of its staff – something particularly noteworthy given that we are approaching the peak Christmas trading season. Fewer tourists and a lack of office workers continue to hit sales and a planned refurbishment has also been put on hold. On a positive note, web sales at Hamleys have been strong and it is going to be opening up 11 pop up shops between now and Christmas.

The US turns to developed nations for networks, US operators scramble over EV charging supremacy and Europe is set to decided on burger terminology…

Having done a massive hatchet-job on Huawei getting involved in the rollout of 5G networks around the world over the last year or so, US to offer loans to lure developing countries away from Chinese telecom gear (Wall Street Journal, Stu Woo) shows that the Americans are now making a push into developing countries to use alternative telecoms gear rather than that of the Chinese. They are offering financial assistance to use their services that they say are safer and have fewer conditions (Chinese finance agencies offer finance that can trap them). The US Agency for International Development is leading the push and will send out politicians and regulators who will slag off Huawei and ZTE and big up makers like Nokia, Ericsson and Samung instead. * SO WHAT? * This sounds pretty outrageous, don’t you think? Whether you believe what they say or not, a concerted campaign by the Americans to decimate Chinese business whilst recommending alternatives is pretty brazen. Mind you, given the success the huge negative-PR campaign against Huawei this is the next logical step as China continues to be strong in Africa and the Middle East.

Meanwhile, Spread of electric cars sparks fight for control over charging (Wall Street Journal, Rebecca Elliott) shows that the increasing uptake of electric cars is prompting a scramble for who controls the charging networks to power them in the US. Utilities companies such as Exelon Corp and Southern California Edison are looking to invest

millions in upgrading their infrastructure to accommodate charging but want to get some control. They argue that there will be quicker EV adoption if utilities get involved because they already have an infrastructure to build, something that other private companies lack. Their opponents say that they should not be allowed a monopoly on car charging but acknowledge they’ll have to play a prominent role. * SO WHAT? * I suspect that progress here will be monitored closely as other countries think about the spread of electric vehicles.

Debate over vegan ‘sausages’ and ‘burgers’ heats up ahead of EU vote (Financial Times, Emiko Terazono and Mehreen Khan) shows that MEPs are scheduled to vote this Wednesday on whether words like “steak”, “sausage”, “escalope” and “burger” will be allowed to be used with products that don’t contain meat. If they decide against letting them use such terminology we will be subject to such foodstuffs to be called “discs” and “fingers” (really??). Funnily enough, the move has been backed by Europe’s meat and livestock industry and the European Parliament’s agricultural committee. * SO WHAT? * Farmers are understandably fearful of the continued rise of meat-alternatives and forcing them to call their products by different names is obviously designed to make them less appealing. Their argument that referring to meat alternatives with names associated with meat would be confusing is patently ridiculous! The vote hangs in the balance and there has been form in this kind of thing before as the European Court of Justice in 2017 banned the use of the words “milk”, “butter” and “yoghurt” for marketing non-animal products. The agricultural lobby is very powerful, so it’ll be interesting to see what happens here. All this talk of food makes me want to eat a vegan cylinder 😋. Yum.

…in other news…

There’s nothing I like more here at Watson’s Daily than to identify important trends. Today is no different – and to that end I bring you Rubber chicken handbag everyone is obsessing over and where to buy it (The Mirror, Paige Holland). You heard it here first!

1. In CONSUMER/RETAIL-RELATED NEWS, credit card borrowing costs are expected to rise and we’re spending money on Domino’s and AO World but not at Boots. Marston’s faces reality, the EG Group brothers face scrutiny and LVMH offers hope
2. In FINANCIALS NEWS, Stripe buys into Africa, Morgan Stanley sees profits jump and more fund raising looks likely
3. In TECH NEWS, Google Chrome comes under the spotlight and Twitter goes down
4. In INDIVIDUAL COMPANY NEWS, Ford leans on rivals, Ryanair makes tough choices and Big Hit Entertainment looks vulnerable
5. AND FINALLY I bring you a VERY weird tattoo and some expensive underpants…

So credit card borrowing costs look like rising, Domino’s gets a slice of the action, AO World triumphs, Boots doesn’t, Marston’s makes tough choices, the EG Group brothers face scrutiny and LVMH offers hope…

*** If you got through the FIRST ROUND of the Watson’s Daily x More From Law x LittleLaw competition, please find the questions for Round Two HERE. You should be getting an e-mail on this if you achieved the pass mark, but I thought I’d put it up here as well! ***

Credit card borrowing costs to rise by Christmas (The Guardian, Phillip Inman) cites findings by the Bank of England which show that banks raised the cost of credit cards in Q3 and look to continue to do the same in Q4. The majority of lenders are also likely to restrict loan products during the final quarter. * SO WHAT? * This will increase fears that the UK’s poorest households will have much more restricted access to credit as the furlough scheme ends and unemployment starts to rise. On the other hand, lenders are keen to limit their downside and potential exposure to customers defaulting. Tough times.

Meanwhile, consumers are spending on pizza – as per Domino’s sales figures served cold (The Times, Dominic Walsh), which highlights like-for-like sales growth of 17.5% in Q3 although orders are now falling due to more rivals opening up and some students delaying a return to university – and on electrical goods in Sales boom at AO World puts rivals in shade (The Times, Ashley Armstrong) where the online retailer announced a hike in sales in the six months to September of a whopping 57%. Chief exec John Roberts said that “The last six months of trading have been like no other during my two decades in the business” and the company’s share price shot up by 30.1% following this bullish update, pushing its valuation above that of Dixons Carphone. This is an incredible performance when you consider that AO’s share price has gone from 85p at the beginning of this year to 302.5p!

On the other hand, Boots is problem child for US parent as stores suffer (The Times, Ashley Armstrong) shows that

Boots posted a rather disappointing 29.2% fall in like-for-like sales in the three months to the end of August as footfall continues to drop. This poor performance will prompt action by the company’s American parent Walgreens Boots Alliance to turn things around. On the plus side, Boots’ online sales shot up by 155% over the quarter and it has managed to win back market share in the beauty sector. * SO WHAT? * This doesn’t sound particularly great and usually, when a parent says that it will be focusing on a turnaround, it usually means more closures and more job losses. The other thing I would mention is that Next is busy trying to put together a format that will be a new source of competition as per First look at the new Next Beauty and Home stores (Marie Claire, Fiona Embleton). I bet you never expected me to quote from Marie Claire, now did you!

Meanwhile, Pub and brewer Martson’s to cut 2,150 furloughed jobs (The Guardian, Rob Davies and Kalyeena Makortoff) highlights yet more misery in the hospitality sector as it reacts to the latest government covid restrictions. The company traded strongly over the summer but the 10pm curfew, requirement for full table service and now a three-tier system just all combined to push the company to make tough decisions. The British Beer and Pubs Association has warned that up to 300,000 jobs could disappear in the hospitality sector unless the government steps in. * SO WHAT? * Unfortunately, this was bound to happen given the circumstances. It is likely to continue.

I thought I’d mention Billionaire brothers need to account for themselves (Daily Telegraph, Ben Marlow) because it highlights a potential fly-in-the-ointment for the recently-announced Asda deal. Brothers Mohsin and Zuber Issa built up EG Group, which recently announced it was to buy a majority stake in Asda from current owner Walmart. However, it’s all gone a bit pear-shaped as the company’s auditors, Deloitte, resigned because of disputes on governance – just days after the brothers received their MBE’s from the Queen! * SO WHAT? * The article suggests that this is great publicity for Deloitte in a way, because many of the Big Four accountants have come under a lot of criticism over the last few years for signing off on dodgy accounts. It also suggests that the Competition and Markets Authority are now much more likely to investigate the pending deal much more closely as a result of Deloitte’s actions. Asda really seems to be a problem child!

Stripe buys into Africa, Morgan Stanley announces strong profits and more fund raising looks likely going into the end of the year…

Stripe moves into Africa with Paystack deal (Financial Times, Tim Bradshaw, Miles Kruppa and Neil Munshi) heralds an interesting move into Africa with its acquisition of Lagos-based payments company Paystack for an undisclosed amount. Paystack is among a group of companies that has made Lagos a hotbed of fintech on the continent. It now processes about half of all online payments in Nigeria. * SO WHAT? * It’s fascinating to see this move given that Jack Dorsey, founder of Twitter and Square, had planned to spend a number of months in Africa this year before coronavirus scuppered his plans. There is clearly massive potential upside in this market given that about 95% of transactions are still carried out in cash. On the other hand, there are big risks as the region has a long history of money laundering. Things could certainly get interesting!

Then in Morgan Stanley profits jump 25% on Wall Street trading bonanza (Financial Times, Laura Noonan) we see that Morgan Stanley has reflected the success of its peers JP Morgan and Goldman Sachs, who also benefited from higher trading volumes during lockdown. Its investment and loans portfolio also performed well as a result of strong market conditions. It’ll be interesting to see whether Morgan Stanley is able to keep the party going.

Winter nerves in boardrooms could trigger second round of fundraising (The Times, Tom Howard) shows that there is an expectation in the City that companies will try to tap markets for more money via equity placements (where the companies create new shares and sell them) going into the end of the year and many big institutions are ready to invest. * SO WHAT? * Companies who wanted quick money during lockdown turned to the markets. It seems that the underlying demand to raise money to shore up their balance sheets continues to bubble away and many would deem it prudent to raise money ahead of another lockdown “just in case”. Investment banking fees are likely to rise as a result, I would have thought…

Google warrants a closer look and Twitter has a hiccup…

Google’s Chrome now looks a little tarnished (Daily Telegraph, Margi Murphy) shows that members of the US Department of Justice who are investigating Google for alleged antitrust violations are considering whether Google should be forced to sell Chrome, the world’s most popular browser. * SO WHAT? * Given that this is the engine that drives its massive $162bn digital advertising revenues, such a separation could potentially be quite painful, depending on how it was structured. Pressure to force Chrome out of Google continues to build but DoJ bods are

considering other options such as separating it from Android, advertising tech or YouTube. This sort of talk is fine – but if they ACTUALLY decided to do something like this I think the execution would be a nightmare. Have a read of this article if you can, though – it is fascinating.

Then in Twitter suffered widespread service disruption, says there is no evidence of security breach or hack (Wall Street Journal, Sarah E. Needleman) we see that Twitter suffered a two-hour disruption of its services yesterday as some users were unable to send or receive tweets. * SO WHAT? * Twitter dismissed it as problems with internal systems. Mind you, given that earlier on this year it suffered its worst ever hack that allowed access to thousands of accounts to hackers this will be raising eyebrows, especially in the run-up to the presidential election where the spread of false information is a key area of concern.

Ford looks to rivals, Ryanair makes tough choices and Big Hit Entertainment looks vulnerable…

In a quick look at some of the other news stories doing the rounds today, Ford to pair with rivals to avoid EU fines over emissions (Financial Times, Peter Campbell and Joe Miller) signals a massive cop-out for the American car manufacturer as it has had to team up with rivals to meet its European emissions goals as a recall of its hybrid cars meant that it would fall foul of the new tighter restrictions (see what this is about HERE). It said that it had to buy carbon credits from rivals who have sold more electric or hybrid vehicles. * SO WHAT? * This is a short term fix to a longer term problem. Ford needs to pull its finger out on the EV front otherwise it will risk massive fines from Brussels.

Elsewhere, Ryanair cuts one in three winter flights and warns of more job losses (The Guardian, Kalyeena Makortoff and Gwyn Topham) highlights yet more misery for the airline industry as Ryanair makes even more cuts to flights, increasing the likelihood of yet more job losses.

Then in Big Hit/BTS: liable to pop (Financial Times, Lex) we see that although BTS’ management company Big Hit Entertainment is surfing a massive wave at the moment, there is a danger that its investors will be tempted to sell quickly in order to crystallise the massive gains since its flotation this week. I would say that this is a tricky company given its massive reliance on BTS and the fact that investors may be attracted to cheaper rival companies.

…in other news…

OMG. Just get a load of this: Man’s ‘insane optical illusion’ tattoo looks like giant hole in his head (The Mirror, Paige Holland). Incredible 😱! If you find that discombobulating (and it is!), why not check out the politician who thought he could stuff money down his pants in Politician stuffed £4,500 in the underpants he was wearing during raid by anti-corruption police (SkyNews). What??? Quick thinking or just plain stupid?!?

1. In BANKS NEWS, Goldman Sachs profits while falling interest rates take the shine off Bank of America and Wells Fargo
2. In PROPERTY NEWS, WeWork discounts rents, residential seems to be running out of steam but the top end is buzzing
3. In RETAIL/HIGH STREET NEWS, ASOS performs well but is cautious while Boparan buys GBK
4. In INDIVIDUAL COMPANY NEWS, BTS’s management company’s IPO proves to be “dynamite”, Zoom aims to cash in, Marshall Wace buys into IAG and Deloitte abandons EG Group
5. AND FINALLY, I bring you a Nigella pasta idea…

So Goldman profits while low interest rates drag on BoA and Wells Fargo…

*** If you got through the FIRST ROUND of the Watson’s Daily x More From Law x LittleLaw competition, please find the questions for Round Two HERE. You should be getting an e-mail on this if you achieved the pass mark, but I thought I’d put it up here as well! ***

*** It’s THURSDAY today, which means that it’s ZOOM time! This is a Zoom call where I talk about the week’s key business and financial markets news and open it up to questions from YOU where you can ask anything you like. The call for FREE subscribers (from 5pm-5.30pm) is HERE. I do another call for PAYING SUBSCRIBERS from 5.30pm-6.30pm where I do the weekly roundup, but there is also chance for more Q&A as well as interactive group discussion. Joining details for this call are HERE. If you want to upgrade to be a paying subscriber, please click HERE. Hopefully I will see you later! Don’t be shy – say hello! ***

Goldman Sachs profits soar 94pc amid trading frenzy (Daily Telegraph, Lucy Burton) highlights Goldman Sachs’ success at making profits during the pandemic thanks to its investment banking and trading businesses. Profits shot up due to a 29% rise in trading revenues and a 7% boost in investment banking revenues courtesy of clients trading volatiles markets and companies shoring up their balance sheets amid the pandemic and engaging in M&A.

On the other hand, Falling interest rates drag on Bank of America and Wells Fargo profits (Financial Times, Robert Armstrong) shows that things were not as rosy at rival banks as weakening interest rates squeezed margins. Both banks reported higher net profits than in Q2, but most of this was down to lower provisions for bad debts. On the plus side, Wells Fargo’s mortgage business had a strong quarter on the back of home refinancings, Bank of America saw an uplift in fees for its credit card business and both saw an increase in fee income from investment banking. * SO WHAT? * Falling interest rates really killed the party for these banks as net interest income (the difference between revenues from interest-bearing assets and interest paid for financing) fell sharply. Net interest income at both banks account for about half of the revenues – which is why Goldman swerved a similar fate given its higher exposure to other revenues streams.

WeWork offers discounted rents, the residential mini-boom seems to be losing momentum but the high end appears to be buzzing…

WeWork offers rent discounts to Covid-hit tenants (Financial Times, George Hammond, Andrew EdgeCliffe-Johnson and Stephen Morris) shows that WeWork is cutting prices around the world in order to stop an exodus of existing customers. In some cases, it is halving the rent they owe for the next few months. * SO WHAT? * This whole flexible office space thing is proving to be very difficult currently because companies like WeWork and IWG – who don’t OWN their buildings, they have them on long leases and then sublet to tenants on much shorter leases – have tenants reconsidering their space requirements on the one hand, whilst on the other, they are themselves also trying to talk down what they have to pay to their own landlords. Both companies are trying to remain positive and point out that they tend to do well in recessions as companies are less willing to commit to long leases. Still, I think the problem has three major elements: firstly, that the number of tenants is likely to decline as increasing

numbers go out of business or just retreat to their home offices/bedrooms; secondly, that there is likely to be a major uptick in the supply of office space; and thirdly, that there will be landlords out there who just want tenants at any price, meaning that they will charge peanuts, thus bringing down rents across the board.

Meanwhile, in residential property, Mini-boom loses steam as the search for new horizons falters (Daily Telegraph, Melissa Lawford) suggests that the mini-boom we saw over summer could be losing steam. Little things like Rightmove searches falling and mortgage brokers seeing a levelling-off in demand could constitute early signs of a loss in momentum. Zoopla reported that house buying activity, whilst still strong, could suffer further from first-timers not being able to get a deposit together due to lenders’ tighter lending conditions. On the other hand, Top London property in big demand (The Times, Philip Aldrick) shows that London’s super-prime property market (>£10m) has actually seen an uptick in activity, according to Knight Frank. Interestingly, 40% of buyers were British – the highest percentage in a decade – which is probably a function of travel restrictions. Kensington accounted for 14.3% of super-prime deals but demand for more outdoor space powered interest in properties in Notting Hill, St John’s Wood, Hampstead and Belgravia. Nice if you can get it!

ASOS does well but is cautious and Boparan buys GBK…

Asos profits quadruple as demand soars in lockdown (The Guardian, Sarah Butler) highlights a stellar performance by online apparel retailer Asos, powered by sales of casual wear and skincare products during lockdown. Having said that, the company’s share price fell by 10% as the company outlined a cautious outlook due to the outsize impact of the pandemic on its key customer demographic – 20somethings. * SO WHAT? * I guess that there is a limit on how many hoodies and sweatpants everyone wants/needs and although Asos has been able to cut costs and make efficiency gains at its European warehouse, the fact that its demographic is taking the brunt of coronavirus impact is likely to be a cloud over its impact for some time.

Ranjit Singh Boparan buys Gourmet Burger Kitchen in rescue deal (The Guardian, Sarah Butler) reflects further consolidation in the casual dining sector as Boparan, which snapped up Carluccio’s in May, has bought GBK out of administration. This will save 660 jobs, but 362 will be lost as 26 sites are to close. GBK was owned by South African company Famous Brands, which also owns Wimpy in the UK. However, it had to put GBK up for sale as it struggled during the pandemic. * SO WHAT? * Boparan, dubbed the “chicken king” on account of him being the co-owner and founder of 2 Sisters Food Group which supplies about a third of the chicken on UK supermarket shelves, is using current circumstances to pick up bargains in the restaurant sector. How long can he hang on, I wonder? I hope he does, for the sake of the employees – plus the fact I really like their onion rings 😁

Bit Hit Entertainment’s IPO proves to be a big hit, Zoom aims to keep the momentum going, Marshall Wace has a nibble of IAG while Deloitte abandons EG Group…

BTS frenzy drives hit K-pop IPO (Wall Street Journal, Frances Yoon) shows that Big Hit Entertainment, the management group behind the world’s biggest boyband BTS, had a stellar performance on its market debut yesterday as it doubled from its offer price. To give you an idea of scale, its value is now about $8.5bn versus Warner Music Group Corp (one of the world’s biggest record labels) at almost $15bn and Live Nation Entertainment at about $12bn. * SO WHAT? * Investor demand was huge (retail investor demand was 600 times oversubscribed and the institutional portion was 1,100 times oversubscribed!), but the fact is that BTS made up almost 88% of its entire revenues in the first half of this year. It would seem pretty risky to me on a long term basis because of this massive skewing – but I guess investors want to surf the BTS wave while it lasts!

Talking about surfing waves, Zoom to cash in on pandemic success with apps and events (Financial Times, Richard Waters) Zoom is going to be introducing apps and paid-for events to its existing offering in order to keep the party going. Zoom’s huge upswing in popularity during the pandemic is something that the management does not want to lose and yesterday it launched a US test of a marketplace called OnZoom where anyone can promote and sell virtual events with a full rollout scheduled for next

year. It also announced a plan to become a platform for other apps – called “Zapp” – which will bring extra features to enhance video meetings. * SO WHAT? * I personally think this could be absolutely massive and potentially catapult it, in time, to reach the heights of other Big Tech companies. Zoom has undoubtedly been a “winner” from lockdown and these ideas sound like a great way to keep engagement going.

Marshall Wace takes major stake in BA owner IAG (Daily Telegraph, Oliver Gill) shows that Marshall Wace, a major hedge fund, has built up a 3% stake in IAG – interesting considering that it had been known for building up short positions in Air France-KLM and Lufthansa earlier this year. * SO WHAT? * This sounds like a brave move to me given the ongoing prospects for the airline industry. I guess that it is banking on BA not going under as a flag carrier. At the moment, state-owned Qatar Airways is IAG’s biggest shareholder with a 25% stake.

Elsewhere, Deloitte quits as auditor of EG Group (The Times, Robert Miller) highlights a very interesting development as the accountancy firm has decided to resign as auditor to the company that’s just agreed to buy Asda from Walmart for £6.8m due to concerns about its governance and internal controls. EG Group, which is jointly owned by TDR Capital and the two Issa brothers, has grown rapidly and Deloitte asserted that its governance had not kept pace with its growth. EG Group owns almost 6,000 petrol stations and posted over €20bn of revenues last year. * SO WHAT? * This is pretty interesting – and I wonder what impact (if any) that this could have on the Asda deal. Given the increasing twitchiness that auditors have these days about dodgy accounts, I wonder whether the Asda deal will face further scrutiny.

…in other news…

Today, I thought I’d leave you with Nigella Lawson’s stale bread hack is the secret to ‘flavoursome’ pasta (The Mirror, Paige Holland). Looks quiet nice 👍

1. In MACRO/TRADE-RELATED NEWS, China grows, EU/US Boeing/Airbus tensions rise and Boeing’s orders hit a covid pocket
2. In CORONATRENDS NEWS, trials are halted for Lilly and J&J, UK unemployment rises and we spend on booze but not at cinemas
3. In INDIVIDUAL COMPANY NEWS, Apple does its reveal, Amazon pushes on, JPMorgan surprises on the upside and Cornish Lithium continues to garner interest
4. AND FINALLY, I bring you an unusual depiction of Peppa Pig…

So China shows growth in a troubled world, EU/US tension on Airbus/Boeing increases while Boeing’s orders continue to suffer…

*** If you got through the FIRST ROUND of the Watson’s Daily x More From Law x LittleLaw competition, please find the questions for Round Two HERE. You should be getting an e-mail on this if you achieved the pass mark, but thought I’d put it up here as well! ***

China ‘to be only major economy to grow in 2020’ (Daily Telegraph, Lizzy Burden) cites the latest figures from the China Association of Automobile Manufacturers which show that car sales rose by 12.8% last month – in the sixth consecutive month of growing sales. Official customs data released yesterday shows that Chinese goods exports rose by 9.9% in September versus September 2019. Imports also grew by 13.2% last month to their highest levels so far this year with particularly strong demand for things like soya beans, grains and semiconductors as well as for copper and steel products. * SO WHAT? * There is a marked contrast between China’s fortunes and those of the rest of the world and it is benefitting from everyone still being in some form of lockdown with heightened demand for things like PPE and laptops. I think this is a GOOD thing, however, as it means that when things get worse covid-wise in countries outside China at least we stand some chance of getting supplies. In the first lockdown, China’s factories were closed and production was dead but now

that China is open at least there is some production going on! However, it would be interesting to see how much price-gouging or supply of sub-standard product occurs given what happened the first time around.

WTO rules against Boeing in 16-year fight with Airbus (Daily Telegraph, Alan Tovey) shows that US imports to Europe could get hit by billions of dollars worth of taxes after the World Trade Organisation supported claims by Airbus that Boeing received illegal subsidies. The WTO said that illegal support via subsidies and tax breaks received by Boeing caused Airbus damages of $4bn a year in lost sales and market share. The body gave the European Commission permission to now impose levies on US goods equal to that value. * SO WHAT? * This battle has been dragging on for 16 years and the latest decision is thought to be getting towards the home straight of reaching a FINAL decision. It’s not all one-way, though – the WTO gave the US the right to impose taxes on $7.5bn of EU goods last year. This spat is bound to fuel Trump’s campaign and make him look all combative but Airbus is trying to push for a settlement to end the row once and for all. IMO this is all childish one-upmanship – and I have no doubt that both companies received state subsidies, but then why not? It is an incredibly expensive industry and there is a lot of prestige at stake. They should just admit it and move on. The main winners out of all this are undoubtedly the lawyers who will have earned some fat fees! You can understand Boeing’s whinging, though, given Boeing delivered 11 aircraft in September and won no new orders (Wall Street Journal, Doug Cameron) shows that it needs all the money it can get given the continued grounding of the controversial 737 MAX planes.

A couple of vaccine trials hit pause, UK unemployment rises and we stock up on booze rather than go to the cinema…

Two Covid-19 drug trials halted on safety concerns (Financial Times, Donato Paolo Mancini and Kiran Stacey) highlights a pause on enrolment for Eli Lilly’s antibody treatment (similar to the one Trump was waxing lyrical about recently) and a suspension of all trials of Johnson & Johnson’s experimental Covid-19 vaccine after one participant developed an “adverse reaction”. J&J hopes Covid-19 vaccine trial will restart shortly (Wall Street Journal, Peter Loftus) shows that the company is hopeful that it can resume testing in the next few days, but let’s face it, these things are highly complex and there is a lot of pressure to get it right. After all, AstraZeneca’s trials were halted in September after at least one participant displayed unexplained neurological symptoms – but these have now resumed everywhere but the US. We are bound to see more of this as time goes on.

Meanwhile, UK job losses rise at record rate in 3 months to August (Financial Times, Delphine Strauss) cites the latest figures from the Office for National Statistics which show the biggest jump in redundancy numbers since records began in 1995 as the gloom continues. Maybe

people are trying to drink their worries away in UK shoppers spend £261m more on alcohol amid pub curfew (The Guardian, Sarah Butler) which shows that the latest figures from Kantar show a big hike in booze consumption since the end of Eat Out To Help Out. Sales of toilet paper and flour rose by 64% and 73% respectively but there are few others signs of the panic buying we saw at the beginning of the outbreak. Interestingly, Morrisons has been seeing the fastest sales growth of the “big four” supermarkets as it benefited from new delivery services and its deepening partnership with Amazon. Unfortunately, Cineworld and Odeon ‘running out of cash’ (Daily Telegraph, Oliver Gill) shows that the world’s biggest two cinema operators could run out of cash by the end of this year. Cineworld is thought to be weeks from collapse whereas AMC Entertainment (which owns Odeon) could potentially last slightly longer, according to some analysts. Given that the list of films being booted into next year gets longer by the day I don’t see this improving any time soon. * SO WHAT? * It seems that everyone is making preparations to stock up under lockdown and hide away. This is terrible news for companies who rely on a constant flow of people and although movie studios can still use the “streaming” lifeline, cinemas have nothing in the locker as far as I’m concerned. The only way they will be able to survive is to accept outside money. I suspect hedge funds and private equity firms are licking their lips at the prospect of picking up such assets at potential fire sale prices.

Apple reveals, Amazon advances, JP Morgan surprises and Cornish Lithium attracts interest…

Apple bets on 5G to power ahead of rivals (Daily Telegraph, James Titcomb) highlights Apple’s reveal yesterday of four new phones priced between £699 to £1,399 featuring 5G tech as well as a £99 mini home speaker that will take the fight to Amazon and Google’s devices. The iPhone 12 series will be released between next Friday and November 13th. The phones will not come with earphones or charging plugs. Apple sows seeds of 5G future with ‘a new era’ for iPhone (Daily Telegraph, James Cook and James Titcomb) highlights the company’s hopes for a 5G future and I would say that if anyone can get people to buy into 5G, it’s Apple. * SO WHAT? * I think that the fact that the whole line-up has 5G capability with arguably more reasonable price points than in the past will give people reason to upgrade. Apple has also included AR features that will probably be of limited use now but will come into their own as time passes. I am expecting a huge uptick in iPhone sales.

Elsewhere, Amazon braces for winter demand surge with relentless expansion (Financial Times, Dave Lee) highlights the continuation of Amazon’s ambitious expansion plans, but also some of the issues it faces as it remains steadfast in its commitment to deliver in time for Christmas. In order to do that it has, so far grown its workforce by over 25% so far this year and continued its efforts to rely less on third parties to deliver on their behalf – with the expansion of its own airline Amazon Air being a

“prime” (sorry) example of this. All the while the company will continue efforts to expand the number of Prime members. In the US, Prime members will spend about $1,400 on the site versus non-Prime members spending $600 on average. * SO WHAT? * Amazon’s expansion into so many areas is incredible to behold, but the problem is that everyone else is going to get squeezed out if it is left to its own devices. I really think that it needs to be split up or restricted in some way before it gets too big and too powerful to stop – but will lawmakers and politicians have the stomach to take Amazon on?

JP Morgan profits rise in a quickfire recovery (The Times, James Dean) shows that America’s biggest bank has surprised the market by recovering more quickly than everyone expected from the lows of lockdown and it is now confident enough to set aside less money to cover the expected wave of loan defaults that will inevitably follow. * SO WHAT? * The company has a big consumer lending division and major trading, investment and corporate banking businesses which make it an economic bellwether that observers take a close interest in. However, JP Morgan: Holding pattern (Financial Times, Lex) says that the bank continues to be cautious about the future given the lack of obvious bank-friendly catalysts.

Then in Crowd of investors jump on Cornwall’s lithium bandwagon (The Times, Emily Gosden) we see that the start-up mining company Cornish Lithium has managed to raise £4m in a crowdfunding that was initially trying to raise £1.5m to finance ongoing work. This follows last month’s discovery of a “globally significant” grade of lithium in hot springs near Redruth. Given that lithium is a vital ingredient in batteries, this could obviously be huge for the region. Go Cornwall!

…in other news…

In these troubled times, some of us yearn for an escape to a more innocent past. Peppa Pig’s ‘front face’ is what ‘nightmares are made of’, say terrified fans (The Mirror, Paige Holland) gives us a view of Peppa that we’ve never seen before. If you found that too traumatic to take, I would recommend that you watch/listen to the sheer musical genius that is The Bing Bong Song. Once you have heard this, you know the world is just going to be OK (also, apologies, but you may well find yourself whistling or humming this song for the rest of the day 😂).

1. In MACROECONOMIC NEWS, India unveils a $10bn stimulus package and the Bank of England talks about negative interest rates
2. In TECH NEWS, digital tax reforms hit snags, Apple is about to unveil new phones and Samsung has BTS problems
3. In CORONATRENDS NEWS, PC demand hits new highs, Disney+ gets promoted, retail sales rise and Amazon readies itself for Prime Day
4. In INDIVIDUAL COMPANY NEWS, P&O takes delivery of a massive cruise ship, British Airways’ chief departs and Jaguar faces potential expense
5. AND FINALLY, I bring you an unusual alternative to WFH and an unfortunate engagement announcement…

So India unveils a $10bn stimulus package and the Bank of England prepares the ground for negative interest rates…

*** If you got through the FIRST ROUND of the Watson’s Daily x More From Law x LittleLaw competition, please find the questions for Round Two HERE. You should be getting an e-mail on this if you achieved the pass mark, but I thought I’d put it up here as well! ***

India unveils ‘underwhelming’ $10bn stimulus for pandemic-hit economy (Financial Times, Amy Kazmin) highlights a proposed new stimulus that is already garnering criticism from economists that it doesn’t go far enough to kick-start growth in a coronavirus-battered economy. It was designed to increase capital expenditure on things like roads, water supply, urban development and defence infrastructure as well as giving poorer states more money and incentivising consumers to spend. Yesterday’s announcement comes shortly after the Reserve Bank of India said that GDP would contract by a whopping 9.5% during the current April to March financial year. You could

say that the new initiatives were designed to boost consumption on the cheap. * SO WHAT? * Coronavirus has decimated India’s economy and everyone is crying out for money. After seeing GDP contraction of 24% in the April to June quarter it would seem that the government is taking a very cautious approach and seeing how the dust settles before committing more finances and risking debt downgrades by ratings agencies (this effectively makes their debt more expensive).

There has been talk recently of negative interest rates as a way to help the economy through the current nightmare. What negative interest rates could mean for you (Daily Telegraph, Harry Brennan, Adam Williams and Sam Benstead) does a really good job of laying out what it all means! The most recent stance from the Bank of England’s Monetary Policy Committee is that interest rates should stay at record lows of 1% but it is now saying that they could go lower. Homeowners on fixed morgages wouldn’t see any change, but those on tracker and variable rate mortgages would. Although negative rates are intended to encourage businesses to borrow in order to invest, it is unlikely that individual savers to pay interest. They could, however, increase charges on premium accounts and making deals dearer in other parts of their business. There are other permutations, so I would encourage you to read this article in full if you can.

Digital tax reforms stall, Apple is to announce new phones and BTS get Samsung into trouble…

Setback for $100bn tech tax reforms (The Times, Philip Aldrick) shows that negotiations between 137 countries to rewrite the century-old international tax rules and bring it into the digital age have failed to reach an agreement for a self-imposed deadline this week. The deadline has been booted into the middle of next year. The Organisation for Economic Co-operation and Development (OECD) has been trying to do an overhaul of the global tax code since 2018 due to increasing public anger aimed at Big Tech companies paying very little or no tax. * SO WHAT? * Trying to get 137 countries to agree to something (especially on tax!) was never going to be easy. Failing to reach agreement will likely result in increased tensions between Europe and the US and potential trade wars. The OECD was supposed to bring in a blanket tax but instead, it has left countries like France, Italy and the UK hanging (these countries decided to impose their own digital taxes) by delaying a tax change until next year. It looks to me like the OECD is useless and needs to get its act together on this as the clock continues to tick.

Elsewhere, Apple’s new iPhone 12 with 5G technology carries high expectations (Wall Street Journal, Tim Higgins) shows that Apple is set to unveil a lineup of new phones with 5G tech that many expect will sell in big numbers as 5G gives users who have been hanging onto their 4G phones a reason to upgrade (and I am one of them!). Internet speeds with 5G are way faster and will

allow all sorts of extra activities and functions. Some analysts are expecting a massive sales uptick as per 2014 (which it introduced a larger screen with the iPhone 6 Plus) and 2018 (new model X with facial recognition). * SO WHAT? * Although services and wearables revenue continues to climb, the iPhone still accounts for 50% of Apple’s sales so a meaningful uptick in sales will have a major impact. Even so, Apple’s share price has already risen by 50% this year – but with the advent of this new line-up things could get even better! On the other hand, sceptics point to the fact that Samsung has been pushing 5G for over a year and haven’t seen much of a hike in interest, possibly because it hasn’t yet found a killer 5G app that makes people want to upgrade. Maybe Apple can change all that…

Samsung pulls BTS-branded products from online Chinese platforms (Financial Times, Edward White, Song Jung-a, Yuan Yang and Nian Liu) is a story that popped up yesterday as the “leader” of K-pop superstars BTS made a comment about the Korean War that offended Chinese. * SO WHAT? * Samsung removed BTS branded products from its sites on JD.com and Alibaba’s Tmall in addition to its own website in the wake of the backlash but these things have happened all the time with other brands as well. AS far as Samsung is concerned, this isn’t great for PR, but its effect is likely to be minimal given that its smartphone market share in China is about 1%. This is also going to be a bit of a pain for Big Hit Entertainment, which manages BTS, because the company is scheduled to list in an IPO on Thursday that currently values it at $4.1bn. However, China sales for BHE are minimal because Korean celebs aren’t allowed to appear on TV or hold concerts in the country.

PC demand strengthens, Disney+ gets more priority, retail sales rise and Amazon readies itself for Prime Day…

PC demand during pandemic fuels strongest US market growth in a decade (Wall Street Journal, Maria Armental) highlights one of the ongoing results of increased working from home as PC sales grew in Q3 – Chromebooks saw a 90% surge in sales over the period, for instance. Gartner Inc also said that worldwide PC shipments increased by 9% in the quarter versus the previous year. * SO WHAT? * I would expect this to continue as those who have hung on will no doubt upgrade, especially if more lockdowns occur.

Perhaps unsurprisingly, Disney elevates streaming business in major reorganisation (Wall Street Journal, Joe Flint) shows that Walt Disney announced a major

reorganisation to priorities its streaming video services. Given that this division has been pretty much the only thing to thrive under this lockdown, you would have been surprised if Disney had decided to do anything else!

Then Retail sales rise biggest in decade (The Times, Callum Jones) cites the latest BRC/KPMG figures which show that retailers had their best monthly sales rise for ten years last month and separate Barclaycard data also showed strong spending due to brisk grocery sales (stockpiling again??), kids going back to school and more people doing DIY. Is this the storm before the calm, I wonder?? An October Amazon Prime Day opens a remade holiday shopping calendar (Wall Street Journal, Sarah Nassauer) shows that Amazon is trying to get in early to tempt shoppers, but it’s not alone as it joins Walmart and Target in trying to temps consumers to part with their cash. * SO WHAT? * I think that many retailers are going to throw caution to the wind and try to get sales as soon as they can rather than risk consumers not spending at Christmas time.

P&O gets a new ship, BA’s chief leaves and Jaguar potentially faces big fines…

P&O takes delivery of UK’s largest cruise ship (Financial Times, Alice Hancock) highlights the delivery of an incredibly expensive ship at a time when the cruise industry is dying badly (it took two and a half years to build and cost about $950m. Ouch!) and all the papers seem to be banging on about British Airways chief heads for exit as industry faces ‘worst crisis’ (The Times, Robert Lea and Martin Strydom) but TBH I think this is just a company-specific story that reflects the wider malaise of the airline industry.

Jaguar faces huge fines as it lags behind on emissions (Daily Telegraph, Alan Tovey) shows that the car company is falling behind its peers on reducing pollution and could face massive fines for not hitting strict new environmental guidelines, according to environmental group Transport & Environment (T&E). It is currently 10% behind the CO2 target required to meet European Union rules which stipulate emissions of 95g of CO2/km as an average across 95% of the cars they sell. * SO WHAT? * If they don’t meet this level from 2021 they will be fined €95 per car registered – which could run into the billions across the industry. Those who sell fewer than 300,000 cars a year have been given less demanding targets. T&E estimates that if 15% of cars sold in 2020 by Jaguar Land Rover are electric or plug-in hybrids, it can meet its target. Peugeot, PSA, Volvo, Fiat Chrysler and BMW are already meeting the emissions standards.

…in other news…

Today, I thought I’d leave you with an interesting alternative to working from home in Telecommute from a ferris wheel at this Japanese amusement park (SoraNews24, Oona McGee) as well as a highly amusing moment in Woman poses dog for photo to announce her engagement and quickly regrets it (The Mirror, Luke Matthews). You can’t blame the dog!

1. In TECH NEWS, EU targets Big Tech and Facebook puts out dodgy ads
2. In EMPLOYMENT NEWS, banks tell staff to come home and Silicon Valley companies look at pay cuts
3. In NEWS ON CONSUMER & CORONAVIRUS TRENDS, EV sales triple, Levi’s and Hilfiger get creative, McDonald’s and the like boom while your local eatery suffers, UK cinema admissions reach historic lows while vaccine recourse will be limited
4. AND FINALLY, I bring you an unusual takeaway option…

So the EU continues to target Big Tech and Facebook puts up dodgy ads…

EU targets Big Tech with ‘hit list’ facing tougher rules (Financial Times, Javier Espinoza) shows that EU regulators are compiling a list of up to 20 major internet companies that will have to adhere to much stricter rules aimed at reining in the power of the behemoths. Large platforms will face more stringent rules than smaller ones and they will be forced to share data with rivals and be more transparent about the way they gather data. * SO WHAT? * The details are still being discussed but it seems that the EU wants to go beyond just imposing fines – which are peanuts to these giants – and make them share their data. This is obviously going to catch US Big Tech and they certainly won’t take something like this lying down. The EU has already been slapped down by one company – Apple – so combined resistance is likely to be formidable.

Facebook approved 200 ‘dangerous’ QAnon ads (Daily Telegraph, Laurence Dodds) shows that the social media giant profited from QAnon conspiracy theory ads placed over the spring and summer before finally removing related groups, pages and Instagram accounts last week. QAnon believers think that a large number of celebs and politicians belong to some Satanist group that kidnaps children to abuse them and then consume their blood in the form of a psychoactive drug. They believe that Trump is waging a secret war against this conspiracy and that he will round up his political opponents and execute them en masse. * SO WHAT? * This kind of thing just goes to show how social media can spread views so quickly and I would have thought this is something that those in the EU (and elsewhere) will be keen to clamp down on. Whether they actually can is another question, but things will no doubt be hotting up on the “fake news” and political ad front in the run-up to the presidential election.

Banks tell staff to return and Silicon Valley companies aim to cut pay…

Banks call back stayaway staff abroad amid tax warning (Financial Times, Laura Noonan and Stephen Morris) shows that the City of London’s biggest banks are clamping down on those who are working from home at overseas holiday villas or home countries – although some say that the threat of having to pay more tax is enough to get workers scrambling back! * SO WHAT? * The accommodating approach that was taken early in the outbreak by the likes of Citigroup, Credit Suisse and Deutsche Banks etc. is now hardening now that tax implications are on the horizon! If staff stay put outside the UK there is a danger that they will be classed as having a “personal establishment” in the country they were working from and thus be exposed to paying more tax.

In Silicon Valley pay cuts ignite tech-industry Covid-19 tensions (Wall Street Journal, Katherine Bindley and Eliot Brown) we see that Silicon Valley employers are

increasingly considering reducing salaries by 15% or more depending on where someone moves. Companies will argue that this sort of thing is standard practice in many areas but opponents to this say that companies are hiring employees for their skills and what they can do rather than where they live. Companies including Facebook, Twitter and Microsoft have been letting increasing numbers of employees work from home and payments company Stripe has gone one further by offering employees leaving San Francisco, New York or Seattle a one-time bonus of $20,000 to relocate whilst at the same time saying that they would have to take a pay cut of up to 10%. * SO WHAT? * I have said since this pandemic started that I think that employers will ultimately use the “option” of home working as a means of lowering the overall wage bill. They will couch it as giving employees more freedom, but in actual fact it’s all about lowering overheads when business conditions are tight! Still, I think having the option is great and will give people more choice in terms of where they choose to live and how to balance their lives. I think that once things die down, though, there will be a move to get people back into offices – and they will be tempted by potentially higher wages. It will be a while before that happens, though.

EV sales rise, designers get creative, McDonald’s et al. benefit at the expense of the little guys, UK cinemas suffer and any recourse to vaccine side effects will be restricted…

Electric car sales triple in race to meet Europe CO2 rules (Financial Times, Peter Campbell) shows that sales of EVs in Europe this year will be triple the level last year as carmakers continue to release new models to meet emissions rules, according to forecasts from the policy group Transport & Environment. It says that, based on sales data for the first half of this year, the market share of mostly electric cars will go up to 15% next year. * SO WHAT? * All the carmakers are racing to reduce their average emissions to 95g of CO2 per km because if they don’t they face massive fines. The launch of new greener models has been made more problematic by the pandemic as VW, Hyundai and Kia are among those who have had to delay key rollouts due to production shut-downs. FWIW, I think it’s actually misleading to base such projections on data from the first half of this year because I think that the sort of people who decided to buy an EV during lockdown are probably more affluent than most as these cars are expensive new. Recent data has shown that the most popular car purchases have been for vehicles worth less than £5,000 as people seek a run-around to get to work and avoid public transport – an EV will not be in many people’s budgets I would argue.

Then in Levi’s, Hilfiger push a new kind of online shopping. It looks a lot like QVC (Wall Street Journal, Suzanne Kapner) shows that some brands are going all QVC and turning to online live-streams to attract customers who would otherwise avoid their stores during the pandemic. Such events, where shoppers are shown a number of products and given advice on how to wear them, are already popular in China but are quite new to the US. Shoppers and potential shoppers can ask questions to the host and purchase items. * SO WHAT? * I think that this is a very interesting development – and it seems that others do too as Amazon, Facebook and Instagram are among those to have launched (or at least tested) live sales platforms. Given the restrictions of lockdown, this sounds like an entirely plausible alternative – but it may not be great if the clothes manufacturers themselves decide to cut out the “middleman” by swerving shops and going direct to consumer. I think that this trend is something that could continue post lockdown and grow if what’s going on in China is anything to go by!

Meanwhile, McDonald’s, Chipotle and Domino’s are booming during coronavirus while your neighbourhood restaurant struggles (Wall Street Journal, Heather Haddon) shows that well-capitalised chains are gaining ground while loads of smaller local eateries continue to go bust. Larger operators have more leverage on rents, more space to play with and a broader geographical exposure – as well as drive-through capability. * SO WHAT? * Although it would be fair to say that not every big chain has done well, I think that it will definitely be harder for smaller operators to survive in the current environment. They are just more subject to government guidelines on customer movement restrictions and can’t really do anything about it. FWIW, I think that when we are past the pandemic, there will be a huge mushrooming of independents taking on empty spaces and starting again. Hopefully they will be powered by government grants as well and it may give some the opportunity to “reset”.

In other news, UK cinema admissions on course to be lowest since records began (The Guardian, Mark Sweney) highlights something that we already know – that cinemas are getting decimated because of the lack of films – but that we are now reaching levels not seen since records began in 1928! * SO WHAT? * Films just keep getting pulled on a daily basis so this is hardly surprising. I think it’s all about survival now – but whoever manages to stay intact until the cloud of coronavirus is lifted will make huge amounts of money as people flock back to see movies on the big screen!

Then in People harmed by coronavirus vaccines will have little recourse (Wall Street Journal, Peter Loftus and Susan Pulliam) we see that payouts for potential injuries from covid-19 vaccines will not be very generous. In the US, such instances will only be covered by the Countermeasures Injury Compensation Programme that was set up in 2010 to cover harm resulting from vaccines (e.g. side effects from fainting and then falling and allergic reactions etc.) which has a history of not really paying out that much. * SO WHAT? * I think that this article highlights the potentially wider concern of what could happen if we take coronavirus vaccines and then suffer side effects further down the line. We are all going to get vaccinated when the time comes, but I have no doubt that the companies that make them will seek out watertight promises that they will not be subject to massive class actions if things go seriously wrong given the enormous time pressure they have been put under to get them to market. Will that stop me getting a vaccine when I can? No! But I am sure that there will be resistance from some quarters.

…in other news…

Today, I thought I’d bring you a rather unusual takeaway that could give some a pleasant trip down memory lane in Restaurant is doing £15 ‘back to 90s’ takeaway – with Turkey Twizzlers and Potato Smileys (The Mirror, Courtney Pochin). This sounds pretty grim to me, but maybe it will spark fond memories of more innocent times for others!

1. In CORONATRENDS NEWS, Trump’s re-election chances stumble, Madrid resists curbs, WarnerMedia cuts, UK rail traffic hit lows last seen in the mid-19th century and Ladbroke’s owner raises profit forecasts
2. In FINANCIALS NEWS, Morgan Stanley buys Eaton Vance, Danske cuts jobs and UK banks ain’t keen on low-deposit mortgages
3. In INDIVIDUAL COMPANY NEWS, McDonald’s boosts sales, Netflix announces a new UK HQ and EasyJet asks for support
4. AND FINALLY, I bring you a brilliant dog owner…

So Trump’s health isn’t the only thing that is getting struck down, Madrid rebels, WarnerMedia cuts jobs, UK rail traffic hits historic lows and Ladbroke’s owner raises forecasts…

Donald Trump is risking a Covid election blowout (Financial Times, Edward Luce) highlights the effect that the coronavirus appears to be having on Trump’s chances of re-election. As things stand, in order to do so, he needs to change the focus away from coronavirus because a clear majority of Americans don’t believe what he says about the disease. Joe Biden now has a double-digit lead over Trump in Florida, where a lot of retirees live and his overall national lead is knocking on the door of double digits. Even if these margins narrowed by 50%, Trump would still lose heavily – no US presidential candidate has ever gone into the final month of the election and turned over that kind of deficit. The only thing that he leads Biden on is the economy – but that is not playing ball. * SO WHAT? * Trump appears to be losing legions of aging voters and his deficit with Biden looks insurmountable but this is Trump we are talking about – so anything is possible! 

Talking about defiance, Spanish high court strikes down Madrid coronavirus curbs (Financial Times, Daniel Dombey) shows that the High Court for the Madrid region decided that new government measures restricting access into and out of Madrid, which came into effect on Friday, violated fundamental rights and had no legal basis. * SO WHAT? * Madrid’s infection rate is currently more than double the average of Spain overall and this decision creates even more confusion than there was before. Not only is there confusion and division within the coalition government itself, there is also ongoing tension between national and regional governments. No wonder Germany is identifying Spain as Europe’s most at-risk economy.

Elsewhere, WarnerMedia plans thousands of job cuts in restructuring (Wall Street Journal, Drew Fitzgerald, Joe Flint and Benjamin Mullin) shows that AT&T’s

WarnerMedia intends layoff thousands of its employees in a bid to cut costs by up to 20% as the pandemic continues to hit movie sales, cable subscription and TV ads. This follows similar recent announcements from rivals Walt Disney and Comcast’s NBCUniversal who have also suffered. * SO WHAT? * The entertainment business is taking an absolute pasting from the virus and things do not look like improving any time soon. Although AT&T’s video streaming service HBO Max has done well since its May launch declines at cable networks TNT, TBS, TruTV, CNN and HLN have loomed larger. The pain continues…

Nearer to home, UK rail usage fell during lockdown to lowest level since mid-19th century (The Guardian, Gwyn Topham) cites the latest statistics from the Office of Rail and Road (ORR) shows that passenger journeys on UK railways between April and June this year stood at just 8% of the total for the same time period in 2019 and fares were less than 7% of the levels there were at over the same period. Passenger numbers rose to 43% of normal traffic after the end of lockdown but then the government changed its guidance to encourage more home working once more. * SO WHAT? * The industry is going to have to do things like simplifying fare structures and offering flexible season tickets to attract passengers back – but it may face an increasingly difficult task as they get used to more walking and cycling. In fact, a recent National Travel Attitudes Study showed that 94% of these people said they were likely to continue to walk and cycle. Worrying trends for the rail industry.

Gambling has boomed under lockdown and Ladbrokes owner GVC raises profit forecast after online gambling surge (Daily Telegraph, Oliver Gill) shows that GVA, which owns Ladbrokes and Sportingbet, has lifted its forecasts for the second time after the summer return of sporting events had a positive impact. The company unveiled its 19th consecutive quarter of double-digit online growth as the online betting surge eclipsed the fall in revenue of its UK shops. * SO WHAT? * Good news for GVC at the moment, but there is a danger that its wings could be clipped (along with its rivals) as the surge in betting has not gone unnoticed. I think there is a danger that the government will get involved and spoil the party by imposing restrictions. We’ll just have to wait and see!

Morgan Stanley buys Eaton Vance, Danske cuts staff and UK banks resist BoJo’s overtures…

Morgan Stanley to buy Eaton Vance in $7bn deal (Financial Times, Laura Noonan and Attracta Mooney) highlights a cash and shares deal for Morgan Stanley to buy mid-tier investment manager Eaton Vance that will create one of the world’s biggest asset managers. This will mean that Morgan Stanley Investment Management will pretty much double in size to $1.2tn in assets and give it more firepower to take on the likes of giants like Blackrock and Vanguard. * SO WHAT? * This is a good strategic deal and continues the trend over the last few years of consolidation among mid-sized asset managers. We had Standard Life and Aberdeen in 2017 and then Invesco buying Oppenheimer and Franklin Templeton buying Legg Mason last year. This is all part of the wider strategy at Morgan Stanley to move away from volatile investment banking revenues and towards more stable wealth and asset management revenues.

Meanwhile in Europe, Danske Bank cuts 1,600 jobs to reduce costs (Financial Times, Richard Milne) shows that Denmark’s biggest lender, Danske Bank has announced a 7% headcount reduction following a massive money-laundering scandal and the ongoing impact of negative interest rates. * SO WHAT? * The company is still awaiting news from a US criminal investigation into what went on at its former Estonian branch and has had to pour in a ton of money to beef up compliance to deal with the fallout. Tough times. It also follows recent moves at Sweden’s Handelsbanken and Germany’s Deutsche Bank to cut staff numbers in their own backyards.

In Banks rebuff Johnson’s call for low-deposit mortgages (Financial Times, Nicholas Megaw and Stephen Morris) we see that banks are resisting increasing government pressure to make riskier lending decisions in order to boost home ownership. The difficulty here is that the government want them to offer more 95% mortgages but the lenders themselves are concerned that this is too risky given current economic uncertainty. This is particularly hitting first-time buyers who have to raise huge sums just to get on the ladder. I suspect that they will want more government backing before they will lend more.

McDonald’s boosts sales, Netflix announces a new UK HQ and EasyJet asks for money…

In a quick scoot around some of the other stories doing the rounds today, McDonald’s boosts sales with faster drive-throughs and Travis Scott (Wall Street Journal, Heather Haddon and Micah Maidenberg) shows that US sales have rebounded strongly since the easing of lockdown thanks to the performance from drive-throughs and a promotion by musician Travis Scott. * SO WHAT? * This is good news as the chain has suffered in its domestic market from more competition – especially in the breakfast segment. It has re-jigged the menu and spruced up its marketing but who knows whether the momentum will continue if restrictions tighten again.

Elsewhere, Netflix HQ to build on UK success (The Times, Louisa Clarence-Smith) shows confidence by the streaming giant in the UK as it has decided to treble its office space in London, which will potentially bring some much-needed jobs in the British creative economy. Also, EasyJet posts its first annual loss in 25 years (Daily Telegraph, Oliver Gill) highlights more misery in the airline industry as EasyJet announced horrendous performance in summer trading. It is one of many airlines appealing for government money and I have to say that I just cannot see any other way out – not unless a private equity firm with tons of cash and tons of patience comes along as it will be some time before the whole industry sees any meaningful growth IMO.

…in other news…

Today, I thought I’d bring you the absolutely hilarious Genius pet owner makes dog-sized holes in fence so pooch can watch passers-by (The Mirror, Courtney Pochin). This is just brilliant 😂!

1. In TECH NEWS, Arm/Nvidia faces close scrutiny in China, Samsung announces bright forecasts, there’s a new turn in the TikTok saga and Codemasters shines
2. In PHARMACEUTICAL-RELATED NEWS, Trump announces a “cure”, Lilly seeks emergency approval and it seems there are limits to AstraZeneca’s generosity
3. In CONSUMER-RELATED NEWS, UK mortgage costs hit first-timers and recruitment in London continues to drop
4. In INDIVIDUAL COMPANY NEWS, there’s a game-changing development in whisky going on
5. AND FINALLY I bring you a dirty secret…

So Arm/Nvidia faces scrutiny by the Chinese, Samsung gets optimistic, TikTok sees new interest and Codemasters shines…

*** It’s THURSDAY today, which means that it’s ZOOM time! This is a Zoom call where I talk about the week’s key business and financial markets news and open it up to questions from YOU where you can ask anything you like. The call for FREE subscribers (from 5pm-5.30pm) is HERE. I do another call for PAYING SUBSCRIBERS from 5.30pm-6.30pm where I do the weekly roundup, but there is also chance for more Q&A as well as interactive group discussion. Joining details for this call are HERE. If you want to upgrade to be a paying subscriber, please click HERE. Hopefully I will see you later! Don’t be shy – say hello! ***

Arm expects tough scrutiny in China over Nvidia deal (Financial Times, Nic Fildes) highlights something that is hardly surprising given the misgivings that the Chinese chip industry expressed shortly after Nvidia’s proposed acquisition of Arm Holdings was announced. Given these sentiments, Chinese regulator sign off is far from certain as chipmakers do not want to Nvidia to have control over Arm due to the widespread use of Arm’s products in smartphones and data centres. Until now Arm has been seen to be a neutral player in the chip industry, which has allowed it to licence its technology to everyone. * SO WHAT? * Arm is obviously saying that a change of owner does not make any difference (it had to reassure customers back when Japan’s SoftBank bought it in 2016) but I’m sure that the Chinese regulator will subject it to very close examination nevertheless.

Elsewhere in tech hardware, Samsung forecasts highest operating profits in two years (Wall Street Journal, Elizabeth Koh) shows that the company is benefiting from stronger smartphone and consumer electronics sales,

prompting it to up its profit forecasts for the third quarter. Sales have bounced back in these divisions from lockdown lows and it seems that its 5G networks business is gaining ground as an alternative to Huawei, which is losing ground – fast. Samsung’s full earnings report is expected at the end of this month.

Little-known investment firm Centricus circles TikTok with long-shot bid (Wall Street Journal, Kirsten Grind, Bradley Hope and Georgia Wells) shows that TikTok apparently now has another option as London-based Centricus Asset Management is working on a bid for the viral video app. As things stand at the moment, Oracle and Walmart’s bid is being scrutinised by the relevant authorities and Centricus’ bid is likely to have a low likelihood of success. Having said that, if the Oracle-led bid fails to satisfy the Chinese, Centricus is touting itself as being a viable third option that could satisfy both sides in that it is neither American nor Chinese. * SO WHAT? * There are probably loads of bids going on in the background. I suspect that they will be very much on the back-burner for ByteDance, though, only to be taken seriously if the main bid is not approved. It seems that the Centricus bid leaves a lot of other room for others to join, which would seem like the prudent thing to do given the massive potential risks involved.

Lockdown is a winning formula (The Times, Simon Duke) shows that Codemasters, developer of F1 racing games, said it expects to double its revenues as it benefited from the launch of new games and continued sales of its back catalogue during the pandemic. It added that digital downloads had risen strongly under lockdown – they now account for 73% of total sales. * SO WHAT? * This is good news for the company but I think another thing that is interesting here is the rising trend for downloads – something that will be noted by the likes of Microsoft and Sony as they launch their new consoles next month. Downloads are generally much more attractive than disc sales because downloads cost “nothing” to make whereas discs involve costs from the discs themselves and the packaging. It certainly looks like the days of discs and cartridges are numbered!

Trump announces a “cure”, Ely Lilly wants emergency approval and AstraZeneca’s generosity has limits…

Following his current brush with the coronavirus, Trump calls coronavirus treatment he received a ‘cure’ (Financial Times, Kiran Stacey) shows that the President is back on form as a video went out yesterday evening where he said that his Covid-19 infection was “a blessing from God” because it had led him to the treatment (!). He promised to authorise the Regeneron’s antibody treatment he received for widespread use even though it is only supposed to be used in specific cases. He went on to say “They gave me Regeneron and it was, like, unbelieveable. I felt good immediately. They call them therapeutic, but to me it wasn’t just therapeutic, it made me better. I call that a cure.” Remember that this is coming from a man who thought that injecting Dettol might help. Eli Lilly asks FDA to authorize Covid-19 antibody drug (Wall Street Journal, Peter Loftus) highlights Lilly’s efforts to get permission for emergency use of its experimental antibody-based treatment for patients with mild-to-moderate coronavirus. This treatment is derived from a blood sample of one of

the earliest US survivors of Covid-19 and the company says it could bash out 100,000 doses this month and up to one million by the end of this year. * SO WHAT? * The Trump thing is kind of ridiculous. He has been pushing for a vaccine before the presidential elections, the pharma companies are refusing to play ball and so this seems to be the next best thing. On the Ely Lilly thing, it will be interesting to see if it gets its emergency approval because if it does, it would be the first drug to treat less severe cases and could be the first to not only treat the virus but also give temporary protection to those exposed to it, which would help plug the gap until a vaccine comes along. Interesting!

AstraZeneca vaccine document shows limit of no-profit pledge (Financial Times, Donato Paolo Mancini) is a very interesting article which draws attention to the potential limit of its generosity. The company, which is developing a vaccine candidate with Oxford University, has said that it will not profit from its Covid-19 vaccine “during the pandemic”. However, a memorandum of understanding between AstraZeneca and a Brazilian manufacturer shows that it has a definition of what that time period might be – and it is defining the end of that period as July 1st 2021. * SO WHAT? * It is interesting to see that there are limits to AstraZeneca’s generosity but this end date can be altered. FWIW I think it’s fair enough that the company doesn’t leave something like this open-ended as it is not a charity – but July 1st next year does sound rather close!

UK mortgage costs for first-timers remain steep and London recruitment continues to weaken…

Mortgage costs rise heaps pain on first-time buyers (Daily Telegraph, Russell Lynch and Isabelle Fraser) cites the latest figures from the Bank of England which show that mortgage rates for first-time buyers have shot up due to lenders charging those with small deposits more money. * SO WHAT? * Mortgages are becoming more expensive for ALL borrowers despite record low interest rates as lenders fear that an expected jump in unemployment will hurt their business. Pressure continues to build on the government to come up with more to help buyers.

Then in London a recruiting black spot as rest of UK recovers (Financial Times, Delphine Strauss) we see that demand for employees in the capital continues to fall, according to the latest figures from a report published by the Recruitment & Employment Confederation (REC) and KPMG. Overall, the majority of recruiters saw an increase in activity last month but London has not shared in this growth – it was one of only four English regions where a majority of recruiters reported a decline in activity. * SO WHAT? * This corresponds to recent findings by Indeed which said it saw a rise in job-searches outside London as well as online real estate agents reporting more interest in suburbs than city centres. I would have thought this is likely to persist as people continue to work from home. This survey also showed that competition for jobs is intensifying across the country as the supply of candidates has risen with the increasing prevalence of reduncancies. This has, in turn, led to a sharp drop-off in starting salaries for permanent staff and a small reduction in temp rates.

A Silicon Valley solution for impatient whisky drinkers…

Silicon Valley start-up launches ‘Nespresso machine’ for whisky (Financial Times, Judith Evans) highlights something that could strike fear into the hearts of whisky (or whiskey!) makers around the world as Silicon Valley

start-up Bespoken Spirits has come up with tech that can make whisky, rum or brandy taste like it’s been barrel aged for years in a matter of three to five days! It launched publicly yesterday. * SO WHAT? * This could be ground-breaking in terms of environmental impact as it uses a fraction of the wood and energy of barrel ageing and reduces the wasted product that evaporates during the process. Bespoken has won a few blind-tasting competitions, so the product is there or thereabouts. This could turn the whole industry on its head! 

…in other news…

Today, I thought I’d bring you something to ponder – and perhaps act upon – in Disturbing amount of dirt that’s lurking on your jewellery – and how to clean it (The Mirror, Courtney Pochin). Yuck!

1. In TECH NEWS, the Big Tech report calls for action and Facebook defies Turkey
2. In CONSUMER/RETAIL/HIGH STREET NEWS, UK consumers stay upbeat but don’t spend, Rolex’s main UK dealer does a roaring trade, Wagamama benefits from the ‘burbs, Ikea opens loads of stores, Ocado falls and the US retail landscape changes
3. In CORONATREND NEWS, Boeing tries to quantify the impact and The Batman gets delayed
4. AND FINALLY, I bring you a brilliant wedding…

So the Big Tech report is released and Facebook ignores a new Turkish law…

House panel says big tech wields monopoly power (Wall Street Journal, Ryan Tracy) shows that a report published by the Democratic staff of the House Antitrust Subcommittee – which comes at the end of a 16-month inquiry into the market power of Amazon, Facebook, Google and Apple – concluded that the companies have used their size to crush the competition and restrict innovation. They are recommending that Congress should consider forcing Big Tech to break up their businesses as a result. The Republican staff issued their own conclusions separately and, while they agreed with strong antitrust enforcement, they did not go as far as the Democrats in their recommendations. * SO WHAT? * This is just a report – not law – at this stage, but its conclusions were clear and boost the likelihood of new laws to crack down on the companies’ behaviour. Amazon, Google and Apple have all objected to the report’s conclusions – but then again they would, wouldn’t they!

Facebook to defy new Turkish social media law (Financial Times, Laura Pitel and Hannah Murphy) highlights Facebook’s decision to ignore a new law in Turkey that requires social media companies to have a formal presence in the country. It informed the Turkish government in the last few days that it would not comply with the law that came into force last week, paving the way for President Erdogan to block it. He had said earlier this year that he wanted “immoral” social media platforms to be “banned or controlled” after the Twitter trolling his daughter and son-in-law got after the birth of their fourth child. This got translated into law that was heavily criticised that requires tech companies with over 1m daily users in Turkey to store user data in the country and provide a local representative who would be accountable to authorities. Other platforms, including Twitter, have yet to respond. * SO WHAT? * It’s not clear yet how the Turkish authorities will respond. Although it has banned YouTube, Twitter and Wikipedia at various times over the last ten years, the government also needs such platforms to spread its political messages as well.

UK consumers stay positive but don’t spend, Rolex sales continue to be strong, Wagamama does well in the suburbs, Ikea aims to open more stores, Ocado loses momentum and the US retail landscape changes…

‘Upbeat’ consumers are still not prepared to splash out (Wall Street Journal, Hannah Boland) cites a PwC survey which shows that consumers are actually feeling pretty confident about their finances but are only spending on groceries and DIY. The survey said that consumer confidence had rebounded to pre-pandemic levels and was at the highest level in September for seven years. Interestingly, those in the 18-24 age group were most positive despite everything. On the other hand, the majority of respondents said that they were planning on cutting back their spending across the board. * SO WHAT? * Spending is key here. It’s all very well people feeling confident about their finances – but if that money is just left gathering dust everything will grind to a halt as money is the “oil” that greases the wheels of the economy. With the prospect of rising unemployment, things are not looking great going into Christmas.

Mind you, UK’s biggest Rolex dealer says sales rising despite Covid crisis (The Guardian, Zoe Wood) shows that Watches of Switzerland, which also owns the Mappin & Webb brands, saw sales rise by 18% versus the previous year as British shoppers made up some of the sales shortfall due to the lack of tourists with an average spend of £5,000. Chief exec Brian Duffy said that the purchases had been financed by cash that would have been spent on holidays, eating out and clothes. * SO WHAT? * The news boosted Watches of Switzerland’s share price by 26% in trading yesterday but Duffy is critical of the government’s plans to scrap tax-free shopping for international tourists as this could adversely affect sales when tourists do actually return.

Elsewhere, Wagamama sees sales revival at suburban eateries (Daily Telegraph, Hannah Uttley and Ben Gartside) shows that Wagamama’s parent company, The Restaurant Group (aka “TRG”) announced a resurgence in sales at its suburban pubs and restaurants powered by more people working from home. Conversely, sales in central London suffered as office workers stayed away. * SO WHAT? * This

is a decent performance, but whether momentum continues will depend hugely on any further movement restrictions that may or may not come into force.

Ikea to open record number of stores this year despite online shift (Financial Times, Richard Milne) shows that the meatballs-to-flat-pack-furniture purveyor is continuing unabated in its journey to the future by opening a record number of stores this year. It is betting that it needs a large physical presence despite the continued shift of consumers to online spending. The world’s biggest furniture retailer is planning on opening over 50 stores in the current financial year, with most of them in city centres in a smaller format. * SO WHAT? * Ikea has been trying various things to evolve from its out-of-town megastore roots and is sticking to its plan to be more accessible despite seeing weaker sales due to lockdown and enforced store closures (although some of that was mitigated by online sales shooting up by around 50%!). This shows that the retailer’s biggest overhaul in its 77-year history is proceeding apace!

Talking of online, Ocado loses 10% of its value after legal action by Norwegian rival (The Times, Ashley Armstrong) shows the impact that legal action from Norwegian rival AutoStore has had on the e-tailer’s share price so far. It is still possible for Ocado to countersue. AutoStore is trying to get injunctions to stop Ocado and Tharsus Group, its UK partner, from manufacturing or using its tech. * SO WHAT? * Clearly this is a cloud that will hang over Ocado, but it seems to me that investors aren’t overly concerned. 10% isn’t that much considering the stellar run that the stock has had this year. When you contrast this with the way Nikola’s share price has been treated since various recent allegations were made against it it would seem that investors are probably selling down on the news – but they are also arguably crystallising the gains they have made this year. This can change, but as thing stand at the moment it does not appear to be disastrous.

I thought I’d include How coronavirus changed the retail landscape (Wall Street Journal, Inti Pacheco) because it is an interesting summary of how the coronavirus has changed things for retailers in the US. It confirms the ongoing shift to online shopping (online credit and debit card transactions have increased by 88% on average per month since the beginning of April) with companies like Home Depot and Dick’s Sporting Goods seeing particularly strong performance. On the other hand, JC Penney, Neiman Marcus, GNC Holdings and Brooks Brothers filed for bankruptcy protection. It looks like the US retailers are suffering in the same way as British retailers are over here!

Boeing quantifies its pessimism and The Batman gets delayed…

Boeing expects pandemic to put big dent in jet demand (Wall Street Journal, Doug Cameron) highlights what we probably all knew anyway – that jetliner demand is going to decrease given fewer people are flying around the world. They just put a number on it – 2,000 fewer planes over the next ten years, according to its annual forecast. This is the first such forecast from a major aircraft maker since the height of the pandemic. I don’t think anyone will be surprised by this given what’s going on at the moment!

Then in The Batman grounded as pandemic hits blockbusters (Daily Telegraph, Ben Woods) we see that Warner Brothers film The Batman is the last blockbuster to get postponed only days after the latest Bond film’s release was delayed yet again. Its original release was supposed to be October 1st 2021, but it will now be pushed back to March 4th 2022. No wonder Cineworld decided to temporarily close its UK and US cinemas – there’s not much to watch! * SO WHAT? * This is a major headache for insurers facing claims from movie and TV studios and will also prompt such companies to think more about how they might distribute things if lockdown persists past 2021. Releasing via streaming is clearly an option, but they will probably want to keep to movie theatres for the moment.

…in other news…

I thought I’d leave you today with the brilliant ‘Drive-in wedding’ in Chelmsford bypasses Covid restrictions (bbc.com) which shows that large weddings can take place if you are willing to be creative (and spend the money!)

1. In MACROECONOMIC & OIL NEWS, Trump returns, Spain looks precarious, Indonesia announced reform and Exxon Mobil cuts jobs
2. In CONSUMER/HIGH STREET NEWS, car sales fall to new lows, the 10pm curfew hits footfall and Chanel buys into Bond Street
3. In TECH NEWS, SMIC shares fall again and Google treads lightly in India
4. In INDIVIDUAL COMPANY NEWS, Crowdcube and Seedrs merge
5. AND FINALLY, I bring you two unusual pets…

So Trump returns to the White House, Spain looks troubled, Indonesia announces reforms and ExxonMobil axes jobs…

*** FOR THOSE OF YOU WHO HAVE PASSED ROUND ONE OF OUR Watson’s Daily x More From Law x LittleLaw COMPETITION – keep reading Watson’s Daily and LittleLaw newsletters and Harry Clark’s commercial awareness e-book. The next round’s questions will be based on these materials and the questions will be released THIS SATURDAY! ***

Trump leaves hospital Monday evening, as White House cases mount (Wall Street Journal, Andrew Restuccia and Alex Leary) shows that Trump has recovered enough to throw on a suit and get back to business although more of his aides have also tested positive. He tweeted things like “Don’t be afraid of Covid. Don’t let it dominate your life”, “Now I’m better. And maybe I’m immune. I don’t know” and “Will be back on the Campaign Trail soon!!!”. * SO WHAT? * Trump just has to do this to even stand a chance of getting re-elected. He is by no means back at 100%, but as I said before, this election is now there for Biden to lose.

Spain’s ailing economy may be eurozone’s next flashpoint (Daily Telegraph, Tom Rees) shows that the German government is getting increasingly concerned that Spain has now overtaken Italy or Greece as Europe’s most at-risk economy. Since lockdown, there has been a load of political turmoil, rapidly rising unemployment and the nascent business recovery has now gone into reverse. Madrid is facing new restrictions and it looks like Spain will be Europe’s worst performing economy in the second half as well as the first. * SO WHAT? * Spain’s economy has taken a real battering given the ultra-stringent lockdown,

evaporation of tourism and over-reliance (compared to other countries) on the use of temporary employment contracts which meant that jobs had less protection. The only good news at the moment is that infection rates seem to be flattening out but the country’s precarious coalition government continues to be a key risk for any kind of recovery because of the lack of unity.

Indonesia’s parliament passes sweeping reform bill (Financial Times, Stefania Palma) highlights a newly-passed bill that will change a number of tax and labour market laws in south-east Asia’s biggest economy in an attempt to attract more foreign investment and mitigate the impact of the coronavirus. The so-called “Omnibus Law” was rushed through parliament yesterday – just before today’s union-planned three-day national strike. * SO WHAT? * The new law is designed to try to make investment easier and more attractive especially given that supply chains are being reshuffled at the moment due to tricky US-China trade relations – and Indonesia wants a piece of that action. Labour laws have been particularly restrictive from an outsider’s point of view as severance payments have been among the most generous in the world. Clearly the unions don’t like this and are seeking a judicial review.

Then in ExxonMobil to axe 1,600 jobs in Europe (Financial Times, Myles McCormick) we see that America’s biggest oil company by market cap has decided to cut jobs as part of its efforts to mitigate the impact of the pandemic and lower oil prices. The cuts amount to over 10% of its European workforce. * SO WHAT? * The company’s share price has fallen by over 50% this year but it is not alone in its travails given that rivals BP and Royal Dutch Shell are among the companies announcing big job losses along with related oilfield services companies like Schlumberger, which is in the process of cutting its workforce by 20% (about 21,000 roles). The tough times continue…

Cars sales are week, the 10pm curfew takes effect and Chanel buys a piece of Bond Street…

As many of you know, I like to keep track of what’s going on with the consumer as this can reflect wider trends. UK new car sales slide to lowest September level this century (The Guardian, Joanna Partridge) cites the latest figures from the Society of Motor Manufacturers and Traders which show that demand for new cars – across both consumers and business customers – weakened in a month that is usually strong due to the new registration plate coming in. It was the worst September since new number plates started to be issued in March and September back in 1999 (previously, it was only once a year). On the plus side, sales of battery electric vehicles and plug-in hybrids did relatively well, accounting for over 10% of new car registrations. * SO WHAT? * Car sales in the UK have fallen by 33.2% so far this year versus the same period last year. Given that cars are big ticket items and the economic backdrop continues to look uncertain, this is not surprising.

Meanwhile, on the UK high street, Footfall slumps as 10pm curfew threatens recovery (Daily Telegraph, Tom Rees) cites the latest data from Springboard which says that the recently-imposed 10pm curfew has resulted in slowing footfall for the second consecutive week. Last week’s footfall was 7.1% lower last week than the previous week, with the restrictions hitting town and city centres particularly hard.

On a brighter note, Chanel snaps up Bond Street jewel (The Times, Louisa Clarence-Smith) shows that Chanel has just bought its flagship shop on Bond Street for about £310m. Some will interpret this move as consolidating the idea of Bond Street being a safe haven for investors. * SO WHAT? * Maybe this is opportune (although it paid significantly above the asking price of “only” £240m due to having to fight off competition to land it), but I would argue that this is also a one-off as the company managed to borrow £600m from the Bank of England’s emergency coronavirus lending scheme a few months ago – so clearly it suddenly had the financial means! I think it’s too early to say whether this really is a signal that Bond Street is a safe haven given that Chanel may well have just taken advantage of a very chunky handout. Fun fact: Chanel’s global HQ is in the UK!

SMIC weakens further and Google treads carefully in India…

SMIC shares fall as Chinese chipmaker warns of hit from US curbs (Financial Times, Kathrin Hille, Patrick McGee and Kiran Stacey) highlights further weakness in SMIC’s share price (a continuation of its recent trend) as the group confirmed that the US Department of Commerce now forces American companies to apply for an export licence before selling to it. SMIC said that “it may have potential material adverse effects on the company’s future production and operations” and it is likely that the expansion of its production plants may have to stop, potentially prompting customers to shop elsewhere. * SO WHAT? * Some say that the new restrictions will have a devastating effect on SMIC, but America-based semiconductor equipment suppliers like Applied Materials, Lam Research and KLA-Tencor will feel the worst of the restrictions given their business with SMIC. As for SMIC

itself, this move will impact their development of advanced process technologies. On the plus side, it is not a complete ban at the moment but on the minus, it is still unclear as to what Trump is trying to achieve here given that he will also be damaging American companies.

Then in Google defers enforcement of app store fee in India after backlash (Financial Times, Stephanie Findlay) we see that Google has delayed the introduction of the new Play Store billing policy in India (a 30% fee on some in-app payments) after massive resistance from developers and start-ups. * SO WHAT? * This is particularly interesting given the growing resistance around the world against Apple and Google’s app store policies. It’s a particularly big deal in India as most people use Android phones, over 265m people use YouTube (which it owns) and GooglePay is one of the largest digital payments providers. Given that the company recently invested $4.5bn in India’s Jio Platforms and committed to invest $10bn over the next five to seven years you can see why Google is keen not to rock the boat – especially given rising resistance in India toward Big Tech. 

Crowdcube and Seedrs merge…

Two’s company as Crowdcube and rival Seedrs agree to merger (The Times, James Hurley) shows that Britain’s leading equity crowdfunding platforms are going to get

together as Crowdcube has agreed to acquire Seedrs. Both are loss-making, but the merger will help them to cut costs and provide new services to investors and companies. The merger will be subject to regulatory approval. Given that I would have thought that scale is key in this business, it sounds like the deal is a good one on a strategic basis.

…in other news…

Today, I thought I’d bring you some pet ideas for those of you for whom cats, dogs and hamsters are just a bit too common for your liking in Man’s pet geese come with him to the pub wearing special nappies (Metro, Tom Williams). Interesting…

1. In NEWS ON CORONATRENDS, China rolls out a vaccine, WFH looks set to become the norm, DPD boosts jobs, Cineworld closes cinemas and law firms face an increase in PI insurance
2. In 5G NEWS, Samsung aims to profit from Huawei’s misery and the UK’s 5G rollout looks set to generate thousands of jobs
3. In INDIVIDUAL COMPANY NEWS, Nexi and Sia announce a €15bn merger while Ola gets booted from London
4. AND FINALLY, I bring you a green dog…

So China rolls out an experimental vaccine, WFM looks like a permanent fixture, DPD delivers parcels and now jobs, Cineworld closes cinemas and law firms face increases in PI insurance…

China rolls out experimental Covid vaccine as it eyes global market (Financial Times, Christian Shepherd) shows that Beijing is going to expand a programme of distributing experimental coronavirus vaccines after an announcement last month by state-owned China National Biotech Group (aka Sinopharm) that it had already distributed experimental vaccines to hundreds of thousands of Chinese. This programme was actually initiated in July by the Chinese government and vaccines have been administered despite the fact that they have not fully progressed through the final stage of testing, phase three. It started off with frontline health workers and state employees going to high-risk countries but it will now be rolled out more widely. * SO WHAT? * This is clearly a high risk strategy that many of the subjects seem willing to take. As things stand currently, Sinovac, Sinopharm and CanSino Biologics have the most advanced vaccine contenders and, this month, the United Arab Emirates became the first country outside China to approve Sinopharm’s vaccine for limited use. China’s approach sounds incredibly risky, but let’s hope for all our sakes that this will be a risk worth taking and won’t have any nasty side-effects. I can’t see a similar thing happening in too many other countries because there would no doubt be massive litigation risk if things started to go wrong.

Covid-19 has changed working patterns for good, UK survey finds (The Guardian, Joanna Partridge) shows that the coronavirus outbreak is likely to change working practices permanently as a survey from the British Council for Offices (BCO) showed that the majority of white-collar workers (62% of senior execs and 58% of entry-level staff) want to have a mix of office and home-based working. The BCO’s chief exec Richard Kauntze believes that “The idea that people will return to the five-day week in the office has gone, and I think a much more blended approach is likely”. Another survey carried out by the Institute of Directors found that 75% of directors wanted more home-working after the pandemic and over 50% of them aim to reduce their long-term use of work spaces. If that is the case, Law must be rethought for mass homeworking (Financial Times) shows that the law, which is currently aimed more at traditional nine-to-five work patterns, must change to adapt to such evolution. It suggests that changes must be made in three main areas: firstly, the physical environment (law should cover things like the use of worker tracking software, who should supply the equipment and what other benefits should be supplied etc.); secondly, what to do with tax (what will be tax deductible – there are current laws governing the self-employed but how would they applied more widely?) and thirdly, how to protect worker welfare. Unions complain that this will weaken their power and give companies excuses to outsource jobs abroad. * SO WHAT? * I don’t think that we are going to see everyone returning to

their offices for five days a week as before, but I don’t think that everyone will be working from home either. A balance will need to be struck between the two that will satisfy both employers’ and employees’ needs to do their work effectively in a mutually beneficial environment. I think that there could be some life-changing benefits from more freedom (evening out property prices across the country as fewer people NEED to live in city centres, improved work-life balance as workers can to their kids’ pick-up and drop-off etc., a more creative mindset regarding how to work smartly etc.) but I also believe that there is a big chance that we will slide back into old habits again a few years down the line. I say this because if things aren’t going well for employees in a company, I think we will see a rise in presenteeism as they will naturally feel that seeing bosses and colleagues in person will mean they could be less likely to get the chop in the next round of redundancies. And if employees feel the need to be present, their bosses will also feel the need to do the same – and before you know it, we are back to nine-to-five again. Let’s hope that we can all use this outbreak and turn it into something more positive.

We have all been ordering more online under lockdown leading to Parcel delivery boom prompts DPD to employ 20,000 new staff (Financial Times, George Steer) which confirms the coronavirus trend that is also benefiting rivals such as Amazon, Hermes and DHL Express. DPD is owned by France’s La Poste and forecasts a 23% increase in package deliveries this year, resulting in a 30% revenue uptick. Amazon and Hermes have added a combined 20,500 staff in the UK while DHL Express Europe has added 3,000. DPD said that these jobs are permanent, as opposed to seasonal, as they reflect continued increased demand.

Then in Cineworld set to shut all UK and US screens (Financial Times, Alice Hancock and Anna Nicolaou) we see that the world’s second biggest cinema chain is likely to announce the closure of 90% of its screens indefinitely. This may or may not have been precipitated by the recent news of yet another postponement of the latest Bond film and will last until more Hollywood releases are confirmed. Over 30,000 jobs hang in the balance worldwide, including 5,500 in the UK. * SO WHAT? * The problem is that people are not keen on going to the cinema under the current environment. Christopher Nolan’s recent sci-fi epic Tenet cost about $200m to make but has only made $41m so far in America. If you add to that the complications of the company trying to back out of a previous bid to buy Canadian group Cineplex, things just aren’t looking good right now. I just don’t know whether such companies will be able to survive as I would have thought they are unlikely to be high on governments’ priority lists.

In Law firms hit with big increases in professional indemnity insurance (Daily Telegraph, Michael O’Dwyer) we see that law firms have been hit with massive increases (20-30%) in the cost of professional indemnity (PI) insurance as it is feared that the economic downturn will result in a hike in claims. Such insurance covers the cost of claims made against lawyers for mistakes or negligence. * SO WHAT? * Although lawyers see a particularly high number of claims in recession, financial advisers, architects, engineers and surveyors also see a spike.

Samsung tries to make hay and UK jobs are to get a boost in rollout…

Samsung mounts 5G offensive as countries review Huawei networks (Financial Times, Edward White) shows that Samsung Electronics is trying to make ground on rivals such as Nokia and Ericsson in 5G networks. Given the battering that Huawei is still facing, the race for rivals to take their place is hotting up as demand for 5G is not slowing down. * SO WHAT? * You will recall that Samsung

recently signed a $6.6bn contract to supply 5G equipment to US group Verizon until the end of 2025 – and there is plenty of scope for this to increase as Ericsson and Nokia currently have a 70-80% market share in global network equipment.

5G rollout to deliver 5,000 tech jobs (The Times, Ashley Armstrong) suggests that the rollout of 5G networks will result in thousands of news jobs as Liberty Global (owner of Virgin Media) and Telefonica (O2’s parent) have pledged to create 4,000 new jobs and 1,000 new apprenticeships to accelerate 5G. The two agreed a £31bn merger in May to form a proper challenge to BT and Sky. Sounds great, no?

Nexi and Sia announce a €15bn payments combo and Ola gets the cold shoulder…

Italy’s Nexi and Sia set to unveil €15bn merger (Financial Times, Silvia Sciorilli Borrelli) heralds a potential combination of Italian payments providers Nexi and Sia to become one of Europe’s biggest fintech groups. The combo has been under negotiation for about two years. * SO WHAT? * This would herald the birth of a potential European “champion” as the world of payments continues to consolidate in an industry where scale is key. 

Then in Uber-rival Ola to appeal as it is banned from London (Daily Telegraph, Ed Clowes and James Titcomb) we see that TfL has told Ola, the rival that was trying to take advantage of Uber’s problems in London, that it has now been deemed to be not “fit and proper” to hold a licence due to the discovery of a number of flaws in Ola’s operating model. It will have 21 days to appeal and will continue to operate during this process. Uber will no doubt be pleased!

…in other news…

I thought I’d leave you today with the hilarious White dog left unrecognisable after going for a roll in freshly cut grass (The Mirror, Luke Matthews). Brilliant 😂!

1. In RETAIL & CONSUMER NEWS, Ocado faces a lawsuit, retailers expect a muted Hallowe’en, M&S freshens up a bit, H&M aims to cut stores, Halfords moves up a gear and the US consumer takes an income hit
2. In CAR NEWS, US automotive sales rise and Tesla cuts prices
3. In MISCELLANEOUS NEWS, Rolls-Royce has a shocker, Bayer has a profit warning and warehouse rentals rise
4. AND FINALLY, I bring you a controversial fish finger sandwich…

So Ocado faces a lawsuit, retailers worry about a muted Hallowe’en, M&S gets a mini boost, Halfords cycles to glory and the US consumer takes a dent in income…

*** NEWS JUST IN – President Trump and his wife Melania have both tested positive for the coronavirus and will start to self-isolate immediately. On the surface of it I would have thought that this is tricky timing as we are now getting into the home straight of the presidential election – a time where he would normally be touring the country and seeing voters. He will no doubt try to spin it in some way, but if Biden can’t make more ground from this then he doesn’t deserve to be President IMO. Given that he has been flagging in the polls, I wonder whether he’ll try to delay the election… ***

*** ONE OTHER THING – regarding the current Watson’s Daily x More From Law x LittleLaw competition, STAGE ONE HAS CLOSED. If you’ve managed to get through round one, well done 👏! Round two of the competition will be based on the materials in Watson’s Daily and LittleLaw’s newsletters from this week (Monday 28th September – Friday 2nd October and then Monday 5th – Friday 9th October) as well as Harry Clark’s e-book on commercial awareness. The questions for round two will be released on Saturday 10th October. Unlike round one, you will only get ONE attempt – so make it count! If you’ve missed a few editions, you’ve got time to catch up!***

Ocado accused of infringing robot technology patents (Financial Times, Jonathan Eley) highlights a fly-in-the-ointment for the high-flying Ocado as a Norwegian rival, AutoStore, filed for legal claims in the UK and US saying that the Ocado Smart Platform (OSP) violated a number of its patents. The OSP is the integrated hardware and software system that Ocado is selling to grocers around the world and is the key driver behind its current £20bn market value. Ocado has been a customer of AutoStore since 2012, but relations have worsened over the years. * SO WHAT? * This could potentially be very damaging for Ocado, but you do wonder why AutoStore waited so long to file the claims. Apparently, the seeds were sown when Ocado signed a massive deal with Kroger in 2018 to install its systems. Ocado has now signed up partnerships with Coles in Australia, Aeon in Japan, Monoprix in France and Sobeys in Canada. The market seemed to shrug it off in trading yesterday, though, as the share price only fell by 5% – not much when you consider how central this is to Ocado’s value.

Retailers spooked by lack of spending on Hallowe’en (Daily Telegraph, Laura Onita) showed that retailers, bars and restaurants are bracing themselves for a damp squib of a Hallowe’en as findings from market research firm Pipslay showed that almost two thirds of Britons are not interested in going to Hallowe’en events this year and almost half of parents say that they will not be letting their children go trick-or-treating. This is serious for those exposed to this as we normally spend about half a billion pounds over Hallowe’en and Bonfire Night. * SO WHAT? * This will be the second Hallowe’en in a row to be torpedoed

as last year’s proved to be underwhelming because of Brexit. The retail gloom continues…

Marks & Spencer hopes eco-fashion brand will boost clothing arm (The Guardian, Zoe Wood) shows that M&S has started selling an eco-fashion brand on its website as part of its wider efforts to spruce up and make its clothing offering less boring. * SO WHAT? * The label Nobody’s Child sounds quite “wild” compared to M&S’s usual middle-of-the-road fare, but this is an interesting departure from the norm for Britain’s biggest clothing retailer as this is an outside brand. M&S’ chief exec Steve Rowe said said that the retailer would stock guest brands online and instore as part of a refresh. Sounds like a good idea. Anything to make it more interesting!!!

In H&M to shut hundreds of stores amid shift to the web (Daily Telegraph, Laura Onita) we learn that the world’s second-biggest clothing retailer intends to close hundreds of branches next year as about 25% of its 5,000 shops had leases coming up for renewal. It also announced better-than-expected Q3 results despite profits dropping by 50% over lockdown due to enforced store closures. It is boosting its digital investment to cater for increased online demand. * SO WHAT? * Whether the company really is going to close so many stores or whether it is just using the rental renewals threat as a way to bag lower rents from desperate landlords remains to be seen. I think that where clothes are concerned, a good balance between offline and online can be struck and H&M have made pretty good inroads on that front.

Profit forecast raised to £55m as cycling sales roll on (The Guardian, Joanna Partridge and Sarah Butler) shows that Halfords continue to knock it out of the park as it raised profit expectations for the second time in only a month as bike sales continued to surge. Strong bike sales continued after the peak summer season and sales of its car products and services returned to growth. * SO WHAT? * The unscheduled trading update was taken very positively by investors who powered it up by 18% in trading yesterday. Despite the positive guidance, the company remained cautious about the prospects for the rest of the year but has also launched a recruitment drive for skilled technicians to work in its stores and autocentres. I still think that demand is likely to drop off going into the end of the year as the prospect of cycling in the wind and rain will make this method of commuting less attractive to some. Still, car and bike servicing may well keep it going – and this can be a very lucrative area.

Elsewhere, across the Pond, US personal income falls after lapse of Covid benefits (Financial Times, James Politi and Matthew Rocco) cites the latest data from the Department of Commerce’s Bureau of Economic Analysis which shows that US personal income fell by 2.7% in August as emergency unemployment benefits lapsed. Consumption growth also slowed down. * SO WHAT? * This shows just how important the benefits are to consumption levels and puts more pressure on politicians to agree on a new stimulus/bailout package (something that that have failed to do recently). They need to come up with something quickly – but will they wait now until after the election I wonder?

US auto sales rise and Tesla reduces prices in China…

There’s some good news in US auto sales showed signs of recovery in third quarter (Wall Street Journal, Nora Naughton) shows that strong demand for trucks and SUVs – as well as increasing demand for urban consumers buying cars – is behind the momentum that has been building in the auto industry over the third quarter. * SO WHAT? * OK, so sales have been weaker overall, but there are definite signs that things are turning around. Car dealers are calling for more government stimulus measures to encourage more people to buy as they worry about the fragility and sustainability of the current trend.

Tesla cuts prices by going local (The Times, Simon Duke) highlights Tesla’s move to cut the price of its Chinese-made Model 3 by about 8% to $36,805 by using a cheaper battery produced by a supplier based in the Fujian province. Tesla usually uses expensive fuel cells made by Panasonic and LG Chem which contain nickel, cobalt and manganese rather than the Fujian battery which is lithium iron phosphate-based. * SO WHAT? * This is good news, but it would be even better news if it could lower car battery prices across the board (and around the world!) that would enable its vehicles to be accessible to more people!

Rolls-Royce and Bayer have nightmares and warehouse rentals rise…

Share hit 17-year low after it reveals £2bn cash-call (The Guardian, Joanna Partridge and Jasper Jolly) shows that engine-maker Rolls-Royce saw its share price fall to 17-year lows as it announced an emergency £5bn financing plan to strengthen its balance sheet. Given the sudden drop in air travel revenues from servicing its jet engines and selling new ones has, unsurprisingly, been decimated. It is planning a £2bn rights issue, a £1bn bond offering, a new two-year loan of £1bn and a potential extension of the £1bn loan that is partially backed by the government’s UK export finance agency (UKEF). * SO WHAT? * Rolls-Royce has gone through massive turbulence over the outbreak and its shares have lost 80% of their value since January.  Rolls-Royce has been in trouble for ages and the pandemic came at a very difficult time in the company’s history. It’s too early yet to ascertain whether or not this money will be enough to help it survive in the long term, though.

Speaking of poor share price performances, Bayer shares slump on profit warning as pandemic bites deeper (Financial Times, Joe Miller) shows that the company’s share price fell by over 10% to its lowest level in more than six months as it warned that the pandemic would hit its profits harder than it had originally expected. It said that weaker commodity prices, falling corn and soybean production and negative currency exchange effects in Brazil had particularly detrimental effects on its crop sciences business. The fact that it remained very downbeat on near term prospects also didn’t go down well with investors.

Then in Warehouse rentals jump as online sales grow (Wall Street Journal, Louisa Clarence-Smith) we see that the volume of warehouse space rented out in the last three months increased to record levels as online retailers needed to increase their capacity to keep up with rising demand. According to CBRE, take-up of capacity in Q3 was more than double what it was last year. Pets at Home, The Hut Group and Gousto were among those to sign up for big chunks of space. * SO WHAT? * I suspect this trend to continue as we face more potential lockdowns and, of course, Brexit going into the end of the year.

…in other news…

I thought I’d leave you today with a potential Friday night project in Birds Eye divides fans with Fish Finger Korma sandwich as some think it’s ‘all wrong’ (The Mirror, Courtney Pochin). I actually think that the concept of the chunky fish finger korma sandwich sounds quite good. Not sure about the execution, though 🤔

1. In CONSUMER/HIGH ST/RETAIL NEWS, savings are rising, jobs are looking tenuous, pubs, bars and restaurants get hit by the curfew, high street rents are down, Boohoo benefits despite scandal and Morrisons aims to add 1,000
2. In TRANSPORT-RELATED NEWS, American Airlines and United are to cut 32,000 jobs while TfL has a rescue plan
3. In TECH NEWS, Big Tech is going to get the Brussels treatment and Germany all but freezes out Huawei
4. In MISCELLANEOUS NEWS, M&A activity goes through the roof, the FCA fails to stop payments to claimants and Nikola postpones an event
5. AND FINALLY, I bring you some more Uncle Roger…

So a PE firm closes in on buying Asda, Aldi steps up, Côte gets saved, Pizza Hut cuts restaurants and Deliveroo wants to double its rider numbers…

*** It’s THURSDAY today, which means that it’s ZOOM time! This is a Zoom call where I talk about the week’s key business and financial markets news and open it up to questions from YOU where you can ask anything you like. The call for FREE subscribers (from 5pm-5.30pm) is HERE. I do another call for PAYING SUBSCRIBERS from 5.30pm-6.30pm where I do the weekly roundup, but there is also chance for more Q&A as well as interactive group discussion. Joining details for this call are HERE. If you want to upgrade to be a paying subscriber, please click HERE. Hopefully I will see you later! Don’t be shy – say hello! ***

Britons save at record rate as lockdown curbs spending (Daily Telegraph, Russell Lynch) cites the latest data from from the Office for National Statistics which shows that average households saved 29.1% of their income during the national lockdown. An economic recovery depends hugely on consumers’ propensity to spend and if households decide to close their wallets in expectation of a further downturn then things could get very bleak indeed. Although there has been a rise in spending over the summer, the Bank of England believes that there is a danger that consumers will revert to saving/survival mode if unemployment starts to rise, as it is expected to, as we approach the end of furlough. When you see headlines like More than a third of UK employers planning to make staff redundant (The Guardian, Jasper Jolly) that highlights findings from a YouGov poll about employment plans going into the end of the year, these fears look well-founded. Pubs, bars and restaurants report curfew sales dive (The Guardian, Rob Davies) cites The Guardian’s own analysis which shows that the recently-imposed 10pm curfew has hit sales hard and UK retailers pay just 13% of latest rent bill (Financial Times, George Hammond and Alice

Hancock) reflects the continued precarious state of the high street as tenants try to save money to survive by not paying rent. Increasing restrictions of movement are unlikely to improve the current situation.

Boohoo reports sales surge despite Leicester supplier scandal (The Guardian, Sarah Butler) shows that the disgraced e-tailer managed to brush off a huge wave of negative publicity in the wake of revelations about factory working conditions to publish half-year sales up by 45% during the coronavirus pandemic. The group – which owns brands such as Oasis, Warehouse, Pretty Little Thing, Nasty Gal and Karen Millen – saw its pre-tax profits up by 51%, which was way ahead of analyst expectations. The UK business, which accounts for over 50% of sales, was boosted by shoppers returning fewer items and ordering 10% more per visit. Casual clothing did particularly well (a function of WFH) and the company is scaling back its stock of dresses in the run-up to Christmas in anticipation of a more muted (or non-existent) party season. * SO WHAT? * It’s interesting to see, after all the media hoo-ha, that at the end of the day consumers just want cheap stuff. They may feel slightly bad doing so but we are living in tough times and many cannot afford to be righteous. It may be different when there is more money sloshing around the economy but for now I think frugality takes precedence over morality.

Given that this section has been somewhat depressing, I thought I’d try to lighten the mood with Morrisons packs in 1,000 more workers (The Times, Louisa Clarence-Smith) which shows that it is the latest grocer to announce that they are employing more staff. It needs the extra staff to pick and pack orders for products sold on Amazon as part of its recently deepened partnership with the e-tailing giant. Morrisons has had a partnership with Amazon since 2016 but last month this stepped up a gear as Prime members now have access to its full range. Tesco announced last month it would create 16,000 permanent jobs while Aldi and Lidl have committed to creating another 1,200 and 1,000 roles respectively. * SO WHAT? * At least there is one corner of retailing that is able to take up some of the slack of the others as we head into more uncertainty under Covid. 

More cuts are coming for airlines and TfL eyes a rescue…

American Airlines, United to cut 32,000 jobs as Washington debates relief (Wall Street Journal, Alison Sider) shows that American Airlines and United Airlines are going to go ahead with 32,000 job cuts today after lawmakers were unable to agree on a coronavirus bailout package. Both carriers said that they would bring employees back if a deal is announced in the next few days. * SO WHAT? * The airline industry continues to suffer a massive pasting and with the continued absence of passengers I really think that the only way through this is to get outside help. It may come down to governments having to decide which airlines to save and which ones to abandon because I would have thought that subsidising them all will be too onerous.

Meanwhile, on land, Sadiq Khan sets out £5.7bn TfL rescue plan for London (Financial Times, Jim Pickard) shows that London’s Mayor is calling for a £5.7bn bailout of London’s transport system in an official submission to the Treasury in order to keep everything going for the next 18 months. The government recently announced such a package for the national railway system and senior Conservatives have hinted that TfL’s submission was likely to be approved, albeit with strings attached (he’ll have to increase fares and the congestion charge as well as giving two seats on the board to senior Conservatives). Khan says that income from ticket sales has fallen by around 90% during lockdown and will not recover to normal levels until social-distancing measures are lifted. * SO WHAT? * This is going to get highly political as Khan is from Labour and the government argues that TfL’s finances were in trouble even before the outbreak. This has been thought to be due to cost overruns and delays on the Elizabeth Line as well as Khan sticking to his promise of freezing fares for a number of years when he took office in 2016. This is going to be tricky and I suspect no-one is going to be fully satisfied here.

Big Tech could get the EU treatment and Germany moves to freeze out Huawei…

In Brussels drafts rules to force Big Tech to share data (Financial Times, Javier Espinoza) we see that the EU is preparing to make Big Tech companies share their massive amounts of data with smaller rivals according to an early version of the Digital Services Act legislation. The Act is expected to be completed by the end of this year and will be the EU’s first major overhaul of the internet for twenty years. The aim will be to break the power that Big Tech currently enjoys and even up the playing field a bit and there is a long list of do’s and don’ts that is likely to cause them major headaches. * SO WHAT? * This all sounds great, but I do wonder whether the EU has been too slow. Big Tech is not likely to take any of this lying down and may even be emboldened to rebel given Apple’s recent defeat of EU competition commissioner Margrethe Vestager. If the

EU falls flat on its face on this, it will be the world’s laughing stock. I hope it works because Big Tech has far too much power at the moment.

Then in Germany crackdown set to exclude Huawei from 5G rollout (Financial Times, Guy Chazan and Nic Fildes) we see that Germany is about to impose a load of tough new restrictions on telecoms equipment providers that will pretty much exclude Huawei from its 5G network, although it’s not an outright ban. The new IT security bill will introduce a two-stage approval process for telecoms equipment. The first stage will involve a technical check of the components themselves followed by a political assessment of the manufacturer’s “trustworthiness”. The bill has not been finalised yet and so it is possible that changes could be made. * SO WHAT? * The nightmare continues for Huawei as Germany looks like joining the UK in freezing Huawei out of what would have been an extremely lucrative 5G rollout. I actually think this “trustworthiness” test is quite clever because it puts the onus on the company rather than the government, giving Angela Merkel more wiggle room in any potential negotiations with the Chinese.

M&A activity gets frenzied, the FCA fails to stop insurer delays and Nikola postpones an event…

Dealmaking rebound drives busiest summer for M&A on record (Financial Times, Ortenca Aliaj, Kaye Wiggins, James Fontanella-Khan and Arash Massoudi) shows that M&A activity returned with a vengeance after the initial shock of lockdown in the second quarter. Data from Refinitiv shows that the combined value of deals worth over $5bn worldwide shot up in the three months to September to make the busiest third quarter for thirty years! Some say this was due to a backlog but activity has been boosted by stock market listings, demand for financing during the crisis and a rise in the number of Special Purpose Acquisition Companies (SPACs). Wall Street Banks have made a record $28bn in investment banking fees as a result! This is pretty incredible, but it’ll be interesting to see whether this momentum continues going into the end of the year.

Elsewhere, Businesses face insurance delays as UK court appeal edges closer (Financial Times, Oliver Ralph and Matthew Vincent) shows that the FCA failed in its attempt to get insurers to payout following the test case as insurers want to appeal. Not good news for the claimants as they need the money sooner rather than later.

Then in Nikola postpones showcase as it tries to win back confidence (Financial Times, Peter Campbell and Claire Bushey) we see that the beleaguered electric truck company has had to postpone an event (“Nikola World”) that shows off its vehicles and battery tech while it deals with recent scandals. This thing is just going down the tubes fast!

…in other news…

I know that I’ve mentioned this guy before, but I just had to mention him again because I just find his stuff hilarious. Nigel Ng is a comedian who created the character “Uncle Roger” and his videos have been going viral for the last few months. He does brilliant critiques over the wrong way and the right way to make fried rice. Yes, he’s a character, but I agree with pretty much everything he says in terms of rice making! I don’t share his reverence for woks, however…

1. In TECH NEWS, the Google/Fitbit deal nears approval, fashion tech helps shoppers, Amazon tests a palm reader and Pinterest expands in online retail
2. In RETAIL/HIGH STREET NEWS, Ocado is now bigger than Tesco, B&M gets new customers, Greggs axes staff, Burger King cuts restaurants and aims for drive-ins while Hotel Chocolat underwhelms
3. In CORONATRENDS, lockdown causes a housing frenzy, mortgage approvals surge, coach companies warn and insurers drag their feet
4. AND FINALLY, I bring you an unusual model kit and some rude parrots…

So Google/Fitbit gets closer, fashion tech helps shoppers, Amazon tests palm scanning and Pinterest expands in online retail…

*** 📢 JUST A QUICK ONE FOR THOSE OF YOU WHO HAVE COMPLETED THE FIRST ROUND OF THE WATSON’S DAILY x MORE FROM LAW x LITTLELAW COMPETITION: pay close attention to the content of Watson’s Daily, Harry Clark’s e-book on commercial awareness and LittleLaw’s newsletters FOR THIS WEEK AND NEXT WEEK (Monday 28th September – Friday 9th October inclusive) 🤓. Questions for the second round  will be based on these materials and will be released on Saturday 10th October. You will only have one attempt – so you need to make it count! Good luck! 🍀🤞***

EU poised to clear $2.1bn Google Fitbit deal after new promises (Financial Times, Javier Espinoza) shows that Google’s proposed acquisition of Fitbit is nearing approval after it promised not to use Fitbit’s data to target adverts for ten years, that other devices will be able to access Fitbit’s health data with the consent of the user on the same terms as Google and rival wearable companies will be allowed to continue to use Google’s Android platform. Fitbit’s customers will be able to continue to use services likes Strava and Map My Run. * SO WHAT? * This deal had faced direct opposition from Margrethe Vestager, the EU’s competition commissioner, but I guess that her bruising run-in with Apple has dented her confidence somewhat. A final decision has yet to be reached – and many are expressing their reservations – but it is looking increasingly likely that this will go ahead. Critics are concerned about what Google will do with the data whereas Google is keen to emphasise that “this is a deal about devices, not data”. Yeah, right 🤥

Talking about Google, Google commits to office life with expansion of London estate (The Times, Louisa Clarence-Smith) highlights the tech giant’s intentions to expand its office footprint as it is in talks to lease another 70,000 sq ft close to its £1bn HQ in King’s Cross. It has also signed a lease exension at Central Saint Giles for another ten years. * SO WHAT? * This is quite interesting when you consider that Google told all of its 4,500 UK employees back in July that they didn’t have to come into the office for another

year. Mind you, given the shedloads of cash this company has and the fact that commercial property landlords are on their knees at the moment you can’t blame Google for presumably negotiating nice deals at (surely!) rock-bottom rates! OK, so I am just guessing here, but I wouldn’t have thought they’d be paying a premium! 

Fashion bots keep online shoppers a cut above with smart sartorial advice (Daily Telegraph, James Cook) takes a look at how advances in fashion algorithms can now more accurately analyse millions of outfits online to find items that exactly suit your body shape and sense of style. Amazon announced a new personal shopping service for men this week where you get a monthly box of clothes (that you have to pay for, obviously 😁) for a $4.99 subscription. Alternatives to Amazon’s service include Stitch Fix (an American company that sends boxes of clothes picked by algorithms and stylists), which has grown hugely since it went public in 2017 and Thread (a London-based fashion start-up). * SO WHAT? * Lockdown has made shopping much harder (if not impossible), so advances in this kind of technology that would often slip under the radar somewhat are really coming to the fore. Given that data from Kantar showed an increase in online fashion sales from 30% to 77% of total sales during lockdown you can see that there will be a need for something that takes the hassle and hit-and-miss element out of clothes shopping online both for the consumer (they get what they want) and the retailer (they spend less on returns). I think this is the future of clothes shopping!

Elsewhere, Amazon palm scanner seeks end to credit card payments (Daily Telegraph, Laurence Dodds) shows that Amazon is working on a contactless scanner called Amazon One where you hover your palm over a pad to trigger a sale. Whether or not it has the capability to read your fortune at the same time is not clear at the moment (can you imagine that? “Your total bill comes to £15.99. You will also have a romantic encounter at work in the near future” etc. 😂). It will initially use it in its Amazon Go stores, but there are many interested parties who are considering buying it. Then in Pinterest expands its reach into online retail (Daily Telegraph, Hannah Boland) we see that Pinterest is about to launch new shopping features in the UK that will let users’ cameras scan their surrounding to find items they could buy on Pinterest. They will also be able to click and buy items on posts, see related products and try on items virtually. The US rollout has been successful, so this could prove to be a very interesting development.

Ocado>Tesco, B&M gets new customers, Greggs and Burger King make cuts and Hotel Chocolat has a rubbish Easter…

In a super-quick scoot around retailers and the high street, Ocado overtakes Tesco as UK’s most valuable retailer (The Guardian, Zoe Wood) heralds a historic landmark and B&M attracts new range of customers (The Times, Alex Ralph) highlights a surprise trading update yesterday by the discount retailer which showed that the sales and profit surge from the first quarter has continued into the second quarter with more customers spending more per visit.

On the other hand, Greggs to cut jobs as high street lays bare financial hit (The Guardian, Julia Kollewe and Zoe Wood) shows that even Greggs is having a hard time with coronavirus and will be cutting staff ahead of the end of the government furlough scheme. Burger King to bow out of 25 restaurants in Britain (Daily Telegraph, Lizzy Burden) reflects the same gloom, although it set out plans to combat consumer changes by opening more drive-through sites. Easter was not much of a treat for chocolatier (The Times, Tom Ball) shows that even expensive comfort eating and a 150% increase in online demand versus the previous year did not make up for losses incurred during lockdown for Hotel Chocolat. The tough times continue, even for those who had previously been very successful…

Lockdown housing frenzy, complaining coach companies and foot-dragging insurers…

Fears of lockdown 2.0 add to the housing market frenzy (Daily Telegraph, Isabelle Fraser) is a really excellent article which looks at some of the current drivers of the housing market given the increasingly likely prospect of another lockdown. It contends that current buyers are either those who really need to move (different job, growing family, changing circumstances) and those who are led by emotion (need to move because the lockdown really affected them so much that they want to escape their current situation and get more space). * SO WHAT? * I think that these drivers could certainly power prices and activity for the short term – Mortgage approvals surge to 13-year high post-lockdown (Daily Telegraph, Tim Wallace) shows that the latest Bank of England figures would certainly support that theory – but whether this falls suddenly or gradually when furlough ends is anyone’s guess at the moment (although most observers are pessimistic).

Then in UK coach sector warns of looming disaster without government support (Financial Times, George Steer) we see that the chief exec of the Confederation of Passenger Transport, which represents the industry, is appealing for more government help to save the thousands of people who will lose their jobs if things carry on as they are. Given the difficulties being felt by the likes of Stagecoach and FirstGroup – not to mention the UK railways, this is unsurprising.

Talking of saving things, Payout delay by insurers ‘will kill jobs’ (The Times, James Hurley) shows that pressure is increasing on insurers to pay out for business interruption claims following the court ruling the other day that found in favour of claimants. The FCA is currently in negotiations with insurers to avoid an appeal that will delay payouts.

…in other news…

I thought I’d leave you today with the very weird model kit in Weirdest plastic model ever – A 1:1-scale Cup Noodle, including the ramen and toppings (SoraNews24, Casey Baseel) and the amusing Potty-mouthed parrots split up by zoo bosses after egging each other on to swear (SkyNews). Worth a visit, perhaps?!

1. In RETAIL/RESTAURANT-RELATED NEWS, a PE firm closes in on Asda, Aldi creates more jobs, Côte is saved, Pizza Hut cuts jobs and Deliveroo aims to expand
2. In EV/TRANSPORT-RELATED NEWS, VW and its Chinese partners pour money into the EV market, Nikola continues to look precarious and Uber wins London back
3. In TECH NEWS, SMIC shares fall and Epic continues to battle Apple
4. In INDIVIDUAL COMPANY NEWS, HSBC gets endorsed by Ping An, Caesars closes in on William Hill and Devon agrees to buy rival shale producer WPX
5. AND FINALLY, I bring you an amusing puppy photo…

So a PE firm closes in on buying Asda, Aldi steps up, Côte gets saved, Pizza Hut cuts restaurants and Deliveroo wants to double its rider numbers…

Private equity firm in the driving seat for Asda deal (The Times, Simon Duke) shows that a consortium led by PE firm TDR Capital is in pole position to buy a controlling stake in Asda from its American parent, Walmart. You may recall that Walmart tried to offload it to Sainsbury’s a couple of years ago, but it failed and has been in talks with other parties ever since because its international expansion strategy has changed. The consortium includes two billionaire brothers who own EG Group, which has a global network of filling stations and convenience stores. The deal hasn’t been finalised but it sounds like we are getting closer…

In Aldi to create 4,000 more UK jobs as sales surge in Covid crisis (The Guardian, Julia Kollewe and Sarah Butler) we see that Aldi is going to create more jobs as it plans to open 100 new stores and expand its online ordering service as part of a £1.3bn investment in the UK. The 4,000 new jobs will be in addition to the 3,000 permanent roles they have created so far this year as grocery sales shot through the roof during the pandemic. * SO WHAT? * Aldi and Lidl have been chomping away at the “Big Four” supermarkets’ market share for years now, but it seems that the coronavirus surge has reinvigorated the latter and helped them to slow this trend given that the discounters’ major weakness has been their relative lack of online capability. Aldi has been trying to address this by

testing out “click and collect” as well as a fast grocery delivery service with Deliveroo in 20 stores. It will be interesting to see whether this helps them take the fight back to the biggies.

Côte Brasserie outlets saved after pre-pack deal (The Times, Dominic Walsh) shows that the French-themed casual dining brand has been saved after a private markets investment manager, Partners Group, bought it out of pre-pack administration. Côte Restaurants will close three outlets operating under its Limeyard and Jackson & Rye brands but the Côte brand will remain intact, securing the future of 94 restaurants and 3,148 jobs. Pizza Hut to shed 29 restaurants after striking creditor deal (Daily Telegraph, Rachel Millard) highlights another casual dining chain in crisis as it has agreed to a Company Voluntary Arrangement (CVA) with its creditors and will close 29 of its 244 restaurants. * SO WHAT? * I hate to say this, but I think that the hollowing out of the high street is going to continue as the prospect of economic torpor looms large with the impending end of furlough. CVA’s just seem to delay things for a while and Partners Group will have a great deal of work on its hands to keep things going. Given social distancing, restaurants can’t even rely on Christmas party bookings to pep things up at the end of the year.

Then in Hot-footed Deliveroo in race to double its riders (The Times, Tom Ball) we see that the delivery specialist is aiming to double the number of its riders by the end of this year due to the massive surge in restaurants signing up to its service. It started the year with 25,000 and wants to end up with over 50,000 as 11,500 restaurants and 16 grocers including Waitrose, Aldi and Morrisons have agreed deals since lockdown in March. Deliveroo got a $575m shot in the arm from Amazon, who got 16% of the company in return, which cleared the Competition and Markets Authority in August after 15 months of dithering – and it is clearly trying to surf the online delivery wave.

VW looks to grow in China, Nikola soldiers on and Uber wins London back…

VW and Chinese partners pour €15bn into country’s electric car market (Financial Times, Christian Shepherd) shows that VW and its Chinese joint venture partners SAIC Motor, FAW Group and JAC Motors will invest $15bn into electric vehicles in China over the next four years. The group aims to design and manufacture 15 electrified models for the Beijing market by 2025. This will be in addition to the €33bn that the company has pledged to move away from fuel-burning engines. * SO WHAT? * This sounds like a great move strategically and I suspect that the presence of local partners will insulate it somewhat from any potential political pressures. Given that China is the world’s biggest car market and that it wants to be at the forefront of EV tech, you would have thought this would be a decent venture to be part of. No doubt rivals will try to make similar moves.

Elsewhere, Nikola’s business model relies on big leaps in technology, large declines in costs (Wall Street Journal, Katherine Blunt and Charley Grant) highlights the cratering of Nikola’s share price since the summer highs when it became bigger than Ford – it’s now 80% down from those heady levels following the ongoing scandal following the

revelation of founder Trevor Milton’s constant stream of 🐂💩. It also looks at the Nikola business model which depends heavily on sorting out a viable hydrogen fuelling network. Nikola plans to use batteries initially to power its trucks, but aims to transition this towards making its engines hydrogen-powered – something that requires a lot of money, a lot of backers and a massive leap of faith in terms of the company being able to reduce the costs of using green hydrogen. * SO WHAT? * The concept sounds great, but the execution will be made even more difficult as investors – who must surely be wavering given the current newsflow on this company – may be more reluctant than they were to accept the company’s projections. The drama continues…

Then in Uber wins the right to stay open in London (Daily Telegraph, Michael Cogley) we see that Uber will be able to continue its business in London after a nigh-on three year battle with TfL, which decided not to renew its operating licence following concerns about imposter drivers. Uber wins one battle but the road ahead has many pitfalls (Daily Telegraph, Michael Cogley) observes that this is a step forward for the ride-hailer but there is still the thorny problem of classifying its drivers as contractors rather than employees hanging over its head and it is still struggling to make a profit against the backdrop of poor trading conditions. It had aimed to be profitable by 2021, but that is looking increasingly unlikely given current circumstances.

SMIC shares weaken and the Epic/Apple battle continues…

Following on from what I said recently about China’s biggest semiconductor manufacturer, Shares in China’s top chipmaker SMIC fall after US blacklisting (Financial Times, Ryan McMorrow and Nian Liu) highlights further share price weakness as Washington imposed export restrictions that could cut the company off from key US equipment and software in its latest blow to the Chinese semiconductor industry following the ostracism of Huawei. * SO WHAT? * Although this is all part of Trump trying to appeal to voters, SMIC: wrong bargaining chip (Financial Times, Lex) contends that the administration may be shooting itself in the foot by pursuing this action as it will damage American companies as well as Chinese ones. Given that a third of SMIC’s suppliers are American, things could get tricky. This 

move will no doubt strengthen SMIC’s resolve to invest in its own technology so that it can free itself of potential American problems in the future. No doubt the Chinese government will be more than happy to throw money at this as well. Meanwhile, the likes of Qualcomm get cut off from a massive market…

In Hearing in ‘Fortnite’ maker’s Apple lawsuit tests antitrust claims (Wall Street Journal, Sarah E.Needleman) we see that judges are now hearing the claims of Epic Games who are objecting to practices by Apple and Google, who operate the world’s two biggest app stores. Epic is arguing that they are behaving in a monopolistic manner but Apple disputes this and the judge in yesterday’s hearing noted the compelling arguments on both sides. A trial is scheduled to take place next year. * SO WHAT? * The longer Apple can drag this out, the more damage it will do to Epic. As I have said before, I just don’t think Epic can do this on its own and Apple will be able to last way longer IMO.

HSBC gets support, Caesars looks to buy William Hill and Devon agrees to buy a rival shale producer…

Following all the recent scandal around allegations of money laundering, HSBC shares rebound after China’s Ping An increases its stake (Financial Times, Primrose Riordan, Hudson Lockett, Henny Sender and Stephen Morris) highlights a 10% jump in the bank’s share price as it turned out that its largest shareholder, China’s Ping An Asset Management, increased its stake in a vote of confidence in the lender. This is going to be a welcome development given the sensitivities of the current environment and the possibility that was mooted last week of HSBC being put on the “unreliable entities” list, which would have been a real threat to its mainland China and Hong Kong business.

Caesars in advanced talks on £2.9bn William Hill takeover bid (The Guardian, Julia Kollewe) shows that the operator of Las Vegas casino Caesars Palace confirmed that it was in advanced talks to buy UK bookmaker William Hill for cash. If everything went smoothly, the deal would be

expected to complete in the second half of next year. It is looking to combine its land-based casinos with William Hill’s sports betting expertise and online gaming. Betfred ‘eyeing up 1,400 shops’ after building stake (The Times, Dominic Walsh) shows that rival Betfred is waiting in the wings to buy William Hill’s UK outlets if the deal goes ahead as Caesars Entertainment doesn’t want them. Befred currently has 1,500 outlets in its portfolio. * SO WHAT? * I can see the value in Caesars/William Hill combo as Caesars will no doubt want William Hill’s expertise in sports betting (all the UK betting companies have been vying for a piece of the action in the US since sports betting has been legalising state-by-state over the last year or so). However, I’m not sure why Betfred would want all those shops when everyone else seems to be offloading them. No doubt the company is getting them dirt cheap – that’s the only reason I can think of!

Devon agrees to buy rival shale producer WPX (Financial Times, Derek Bower) shows that US oil producer Devon Energy is going to by rival WPX in a $12bn deal – the biggest in the industry since the collapse of crude oil prices earlier this year. Devon/WPX: no premium, no problem (Financial Times, Lex) contends that this all-paper deal makes sense given the current environment and cost savings potential.

…in other news…

I thought I’d leave you today with the amusing photo in Woman laughed until she cried over her puppy’s ‘chunky’ bum in hilarious snap (The Mirror, Courtney Pochin). Cute puppy alert 😍!

1. In CORONATRENDS NEWS, Europeans return to the workplace, Russia prepares for more lockdowns, UK high streets fear a second wave and US grocers stockpile
2. In UK REAL ESTATE NEWS, the UK housing market looks vulnerable, first-time buyers are set to fade and IWG tries it on
3. In EV NEWS, everyone targets China while the Nikola scandal deepens further
4. In INDIVIDUAL COMPANY NEWS, the TikTok ban is faced down and Meatless Farm raises money to expand
5. AND FINALLY, I bring you the world’s smallest Rubic’s cube and how to seal crisps effectively…

So Europeans return to work but don’t kick back, Russia prepares for more lockdowns, UK high street braces itself for a second wave and US grocers start to stockpile…

In Europeans return to workplace but reduce leisure activity (Financial Times, Valentina Romei) we see that while parents have returned to work as their children have gone back to school (according to Google data), leisure activity has started to drop off as new coronavirus cases start to rise. Although the use of public transport is rising (according to transport and mobility app Moovit), international travel is falling – as are visits to entertainment venues and restaurants. Russian businesses prepare for fresh lockdowns as Covid-19 cases soar (Financial Times, Henry Foy) shows that many companies are preparing for tighter lockdown measures after a recent surge in the number of new coronavirus cases. Sberbank, Russia’s biggest lender and one of its biggest employers, is going to move half of its Moscow workforce to working from home and X5, Russia’s biggest food retailer, is ordering 90% of its Moscow office employees to work from home.

Fears grow of ‘knockout punch’ facing high streets (Daily Telegraph, Oliver Gill) shows that opposition MPs are putting increasing pressure on the government to rethink the government’s Job Support Scheme to avert mass unemployment and a “knockout punch” to the UK high street. Companies in hospitality and conferencing say that

they will be forced to make mass redundancies as furlough comes to an end and those working in the events, arts, leisure and sports industries will also be among those who will suffer particularly acutely.

Meanwhile, in the US, Grocers stockpile, build ‘pandemic pallets’ ahead of winter (Wall Street Journal, Jaewon Kang and Annie Gasparro) shows that supermarkets are stockpiling groceries and storing them to prepare themselves for the next few months as the country faces more new restrictions due to the coronavirus outbreak. Food companies upping production of their most popular items so that they don’t get caught out like they did the first time and grocery stores are stockpiling months worth of supplies rather than weeks worth for the same reason. Southeastern Grocers secured supplies of turkey and ham over the summer (way before they normally do) and grocery wholesaler United Natural Foods Inc has also increased inventory of cranberry sauce, herbal tea and cold remedies! Associated Food Stores has started to put together “pandemic pallets” of cleaning and sanitising products to ensure that its warehouses don’t run out. * SO  WHAT? * It does seem that we enjoyed a bit of a summer respite after the severe restrictions of the peak of lockdown and that many are now using those lessons learned to prepare for a second wave. Whether this is going to be worse than the first wave is clearly a moot point, but severe restrictions at this stage will undoubtedly be the end of many businesses who have only just struggled to their feet. Government help is clearly required, but it just won’t be able to save everyone unfortunately. At least we are now facing a second wave with knowledge of what happened the first time around.

We look at the prospects for UK residential and commercial property…

Given that, for many people, their most valuable asset is what they live in, House price growth set to fade away (The Times, Gurpreet Narwan) is something that those considering selling their property may not want to hear. Apparently, Google searches for key phrases like “Rightmove”, “Zoopla” or “On The Market” slowed down this month and are now 7% below the peak of August 23rd, according to analysis carried out by Pantheon Economics. * SO WHAT? * This is a very early indicator and so it is unlikely that this slowdown in momentum will be reflected in the upcoming Nationwide House Price Index. Many analysts are now saying that demand from those seeking to move to the ‘burbs and from first-time buyers will fade as we enter another period of uncertainty and potentially higher unemployment. In fact, Share of UK homes bought by first-time buyers expected to drop (The Guardian, Kalyeena Makortoff) cites forecasts from Zoopla which show that the property portal expects first-time buyer demand to fall going into the end of the year. Is the UK’s booming housing market heading for a bust? (Financial

Times, George Hammond) discusses the possibility of a sharp drop-off in the property market. It originally boomed because of pent-up demand from lockdown and then because of Sunak’s stamp duty holiday, but some say that these are artificial factors that disguise the underlying reality. When you then put Brexit on top of that, things are looking pretty dicey for the end of the year.

In commercial property, Buyout firm puts its faith in recovery for offices (The Times, Tom Howard) shows that KKR, the American private equity firm, is putting its money where its mouth is and buying a stake in Great Portland Estates to become the company’s fifth biggest shareholder with a 5.35% holding. It believes that central London office space will recover – a fairly ballsy move given that commercial landlords’ income has been decimated by the pandemic. Separately, IWG, the serviced offices giant (which used to be known as Regus) is on the verge of putting its Jersey-registered subsidiary Regus plc into in insolvency if landlords don’t agree to massive rent cuts. IWG makes its money by taking out long-term leases and then subletting the space in short-term deals. * SO WHAT? * I don’t think that we will ALL be working from home ALL the time once everyone gets vaccinated, but things will have changed enough on a longer term basis to make an appreciable difference. You can’t blame IWG for trying it on I guess. 

China becomes even more important and the Nikola scandal gets worse…

In a quick scoot around EV-related news today, Global carmakers bet on China’s electric vehicle rebound (Financial Times, Christian Shepherd and Emma Zhou) highlights China’s importance as a key growth driver for the world’s biggest automakers. The country’s annual motor show opened over the weekend after being postponed from April, and the venue was packed out. * SO WHAT? * Sales of EVs and hybrids are now rising after a year of

weakness following a cut in subsidies which was then made worse by the coronavirus outbreak. At the moment, EVs only represent about 5% of total car sales in China, but the country’s desire to be #1 in the world for EVs is a powerful attraction for car companies who are scrabbling about for sales.

I actually mentioned this story in the latest edition of Watson’s Weekly, but Nikola founder bought truck designs from third party (Financial Times, Claire Bushey, Peter Campbell and Ortenca Aliaj) shows that the horror show is continuing apace. Things are just going from bad to worse by the day for this company.

The TikTok ban faces resistance and Meatless Farm raises money…

TikTok download ban is blocked by judge (Wall Street Journal, Katy Stech Ferek and Georgia Wells) brings us the latest on the whole TikTok saga. Basically, a federal judge has now blocked Trump’s attempt to ban TikTok downloads in the US, giving the Chinese-owned app a bit of breathing space. The judgment came less than four hours before the ban was supposed to take effect. The drama continues…

There’s good news in Meatless Farm reaps $31m for expansion (The Times, Tom Howard) as the UK plant-based meat-alternatives firm managed to raise $31m to fund its expansion. The company said it would use the money to fund UK and worldwide expansion. Go Meatless Farm! The ongoing success of the likes of Beyond Meat and Impossible Foods suggests that the market for vegan food is not a short-term fad.

…in other news…

I thought I’d leave you today with something amazing in World’s smallest official Rubik’s Cube developed by Japanese companies (SoraNews24, Master Blaster) and something very useful in Ingenious three-step life hack to ‘perfectly’ seal half-eaten bags of crisps (The Mirror, Neil Murphy). How great is that?!?

1. In MACROECONOMIC NEWS, Sunak announces new measures
2. In TECH NEWS, ByteDance seeks Chinese approval, developers get together to fight Apple, Amazon has a reveal event and ChargePoint aims to go public
3. In CONSUMER TRENDS & RETAIL NEWS, workers look outside London, we spend on furniture, Cineworld looks tricky and Pets at Home powers up
4. AND FINALLY I bring you some of Waitrose’s finest produce…

So Rishi Sunak makes some tough announcements…

Sunak sets up moment of truth for UK jobs market (Financial Times, George Parker, Chris Giles, Jim Pickard and Daniel Thomas) highlights yesterday’s pronouncements from the UK chancellor Rishi Sunak. He confirmed plans to bring the furlough scheme to a close and to replace it with a German-style wage subsidy scheme instead. From October 31st, the Treasury will only subsidise wages for people who work at least a third of their usual hours, meaning that anyone who could not work any of their normal hours would not be covered. He acknowledged that “I cannot save every business. I cannot save every job” as his new plans shift the burden of supporting jobs away from the government and onto the employers. He also extended 5% VAT for restaurants, hotels and cinemas until March 31st next year, announced more support for self-employed workers (but this was only at 20% of average monthly trading profits versus 70 and 80% of trading profits previously) and extended the life of four loan schemes.

Retailers face £8bn bill when rates resume in April (Daily Telegraph, Laura Onita) shows that retailers will have to pay an £8bn bill when the business rates holiday comes to

an end at the beginning of April. Retailers were hoping for an extension from the original agreement but didn’t get it. Unfortunately, the rates are based on property rental values that were last assessed in 2015 and which are not due to be revalued until 2023 – so they are likely to be high. * SO WHAT? * Of course the British Retail Consortium is going to say that its members need more “certainty” and that the business rates holiday should be extended, but then the government countered that by saying that retail sales rebounded to pre-coronavirus levels in August. No one is going to be satisfied and everyone is quite rightly fighting their own corner in order to survive.

The winners and losers from new plan to protect jobs (Daily Telegraph, Marianna Hunt) is an excellent article that summarises the impact on specific groups of people of the new measures. Winners include those coming off furlough (because the offer of some money may convince employers to keep staff on for a bit longer), most self-employed (who will have access to a few grants and be able to spread their tax due) as well as SMEs (who will be able to access the Jobs Support Scheme and extend the terms of their Covid loans to up to 10 years). Losers include the self-employed who missed out on government support last time, big businesses (who will have to start making people redundant on October 1st) and jobs in the arts and sport as venues remain closed.

ByteDance seeks approval for the TikTok deal, developers team up against Apple, Amazon has a reveal and ChargePoint aims to go public…

TikTok owner puts deal with Oracle, Walmart in Beijing’s hands (Wall Street Journal, Liza Lin) reflects the latest development in the ongoing TikTok saga as its owner, ByteDance, said yesterday that it has submitted its plan to join up with Oracle and Walmart to the Chinese Commerce Ministry. On Wednesday night, TikTok asked a federal judge in Washington, D.C. to stop Trump from imposing a US download ban and at a hearing yesterday, Judge Carl Nichols told the Trump administration that it had until Friday afternoon to postpone the download ban or defend it in court. He added that if the government didn’t act to postpone the ban by 2.30pm today he will hold a hearing on Sunday morning to decide for them. * SO WHAT? * It seems that there is a pattern forming here as a group of WeChat users in the US got together to stop a proposed ban on the app, which the court upheld. The Chinese government has yet to comment on the latest TikTok deal, although state media has been slamming it all week, calling it “dirty and unfair”. The drama continues…

Developers form coalition to fight Apple over App Store practices (Financial Times, Patrick McGee) shows that a new group called Coalition for App Fairness has formed – bringing together 13 groups including Spotify, Epic Games, e-mail service Blix, Tile, Match Group and management tool Basecamp – in order to fight back against Apple’s alleged anti-competition behaviour. Although they have voiced support, Microsoft and Facebook remain conspicuous in their absence from the group. * SO WHAT? * This is what

they should all have done in the first place instead of taking on the Apple behemoth on their own. Still, even together, these groups are still small-fry in the scheme of things and the absence of some of the biggies is telling. As things stand, I still think they will lose – but at least disgruntled developers now have a rallying point of sorts.

Amazon event: tech titan unveils new home drone, speakers, gaming service (Wall Street Journal, Sebastian Herrera) highlights the rollout of a load of new gadgetry by Amazon yesterday. Devices include a home camera drone, a pivoting speaker with camera, a car alarm, a car camera, a cloud-connected game controller and gaming subscription service, among other things. * SO WHAT? * There is some seriously cool kit here, but given how much Amazon already knows about you and your habits do you want it to encroach even further into your home??

ChargePoint to go public in $2.4bn reverse merger (Financial Times, Peter Campbell) shows that the world’s biggest electric vehicle charging business will list its shares via a reverse merger with a blank-cheque company – which will help it to avoid a traditional IPO (something that Nikola did only a few months ago – just sayin’ 😜). It will trade on the New York Stock Exchange at an initial value of $2.4bn via a merger with Switchback Energy, which is a publicly listed Special Purpose Acquisition Company, aka “Spac”. The company wants to raise around $500m to fund its European and US expansion and will clearly try to surf the current wave of demand for battery-powered vehicles. * SO WHAT? * Sounds good in theory, but given recent events with Nikola, you would have thought that the avoidance of a traditional IPO and the scrutiny that brings could be questionable. Still, the business is more established and actually does something, so hopefully that will make things different – plus I think that the timing is pretty good given rising demand for EVs at the moment.

Consumer trends continue to evolve…

In a quick look at consumer trends at the moment, Rising number of Londoners looking for work outside capital, says job site (The Guardian, Hilary Osborne) cites figures from Indeed, which show that job searches outside the capital are increasing. I guess this correlates to real estate trends which show a bit of an exodus to the suburbs as more people move out of city centres and CBI reports

strong sales of furniture, DIY goods and groceries (The Guardian, Sarah Butler) shows what we are spending on (basically stuff to make us comfortable during lockdown).

On the other hand, we’re not spending on going to the cinema. Cineworld issues warning over future after £1.3bn loss (The Guardian, Kalyeena Makortoff) shows how badly this is affecting major cinema chain Cineworld, which says that it might not be able to survive another lockdown without more money. However, on a brighter note, Pets at Home’s hot streak after summer revival (The Times, Callum Jones) shows that we are spending a lot of money on our pets! The company’s share price shot up by 27.8% to new all time highs as it smashed expectations in its unscheduled trading update.

…in other news…

Today, I thought I’d bring you a real bit of creative thinking in Waitrose mocked by shoppers for selling £6 ‘autumn foliage’ as leaves are free outside (The Mirror, Courtney Pochin). Things are bad at Waitrose at the moment, so well done to the person who came up with selling leaves to its customers 😂!

1. In CORONATRENDS NEWS, Sunak scraps the Budget, the City abandons a return to the office, Upper Crust suffers, Ryanair expects a decimated ski season, Asda takes precautionary measures and we look at where we are on coronavirus vaccines
2. In TECH NEWS, we see Chinese criticism of the TikTok deal and Apple opens in India
3. In EV NEWS, Tesla gets sold off, Nikola loses even more credibility and California draws a line in the sand
4. In INDIVIDUAL COMPANY NEWS, WeWork sells a chunk of its China business and Joules sparkles
5. AND FINALLY, I bring you a bus maze…

So Sunak ditches the Budget, the City returns to WFH, Upper Crust and Ryanair suffer, Asda takes precautions and we see the latest on coronavirus vaccines…

*** TODAY IS THURSDAY, WHICH MEANS THAT IT’S ZOOM CALL DAY! This is where I talk over Zoom about the week’s main business and financial markets news and open it up to questions from YOU! You are welcome to ask me whatever you want to. For FREE subscribers, the call will start at 5pm and finish at 5.30pm (the link to join this call is HERE). For FULL/PAYING subscribers, the call will start at 5.30pm and finish at 6.30pm and will cover the week’s news – but we will also have discussions as well as Q&A (the link to join this call is HERE) ***

In Sunak scraps Budget to focus on jobs and business support (Financial Times, George Parker, Sebastian Payne, Jasmine Cameron-Chileshe and Jim Pickard) we see that the UK chancellor scrapped his autumn Budget in order to concentrate on the job in hand. It was supposed to set out a long term recovery plan, but he has decided instead to concentrate on coming up with and implementing measures to minimise business closures and job losses for the next six months. He is likely to announce new measures on wage-support and an extension of government loan schemes among other things. * SO WHAT? * Given we’re in a crisis, I think this is understandable! Having said that, pressure will continue to build on the Chancellor to come up with a longer term plan to give everyone something to aim for.

Meanwhile, City plunged back into shutdown as staff go home (Daily Telegraph, Michael O’Dwyer) shows that some of Britain’s biggest banks, law firms and accountants have dropped plans for staff to return to offices following the latest government guidance. Employees are now being told to work from home unless there is a clear reason for them to go into the office. HSBC, Goldman Sachs, Citigroup, Deutsche Bank, Lloyds and PwC were among those to reverse recent moves to return. This will be a massive blow to the surrounding bars, restaurants, shops and other businesses who supply office workers. Upper Crust owner forecasts 86% sales drop as Covid hits commuting (The Guardian, Sarah Butler) reflects the consequences of a lack of commuters as SSP Group, the owner of Upper Crust and Caffè Ritazza, outlined a downbeat assessment of the current state of play and future prospects with sales for the year to the end of September dropping further than the 80% originally predicted. Ryanair chief’s anger as winter bookings down 90pc (Daily Telegraph, Oliver Gill) shows that people are swerving skiing holidays and Ryanair’s colourful chief exec Michael O’Leary is understandably tearing his hair out given the current paltry booking levels. * SO WHAT? * Everyone’s usual routines and habits are

getting turned upside down and it may well be that at least the changes we have been seeing (particularly regarding the way people work and the increasing amounts of time they are spending at home) will become permanent. You can see why O’Leary is getting frantic – his industry is melting before his very eyes – but for all his huffing and puffing, the fact is that the government is having to make some very difficult choices and, at the moment, they are not going his way. On the plus side, I really think that whoever manages to survive the coronavirus in the travel industry will absolutely clean up when a vaccine is found because demand for international travel (at least between countries that have the outbreak under control) will shoot through the roof. 

Asda puts Covid-proof coating on trolleys and brings back door marshals (Daily Telegraph, Laura Onita) shows that Asda is bringing back door marshals and putting special coating on trolleys and baskets to combat a second wave. It is going to put 1,000 staff outside stores and in the aisles of bigger outlets who will reiterate the need to wear a face covering and keep social distancing. Morrisons also did something similar recently. * SO WHAT? * I would imagine that being a door marshal will be an unpopular job akin to be asked to be a traffic warden as you are bound to get a barrage of abuse (interspersed with some people expressing their gratitude) from mask deniers. Will mask deniers be outweighed by more customers coming in because they feel safer? At least this move will help staff – in theory – but I don’t know how well this can be enforced on a practical level.

I thought I’d include How close is a coronavirus vaccine? (Financial Times, Anna Gross and Ian Bott) because, let’s face it, that’s what we all want to know isn’t it? Super fast (well, compared to normal rates) production will swing into action on an unprecedented scale when a vaccine is found but until then, the slog to find suitable candidates continues. According to the World Health Organization, there are currently over 300 vaccine candidates, 40 of those are now being tested on humans and only 9 have reached the final stage (phase 3 trials). Of those nine, one is being developed by AstraZeneca and Oxford University in the UK, two US candidates come from Pfizer (in partnership with Germany’s BioNTech and Moderna), another candidate is being led by US giant Johnson & Johnson, four are being produced in China by Sinovac Biotech, CanSino Biologies and Sinopharm and the Gamaleya Research Institute in Russia has just put its candidate into phase 3. Governments around the world have been buying up doses in anticipation of breakthrough with the US, UK, EU, Japan and other rich nations representing only 13% of the world’s population is buying up 50% of the leading vaccine’s promised doses. At the moment, forecasts for the first vaccine to pass the phase 3 stage range from October this year to mid-2021. Once this happens, analysts believe that the successful vaccine could be approved by the appropriate national regulator within one month. This is a really fascinating article and I recommend that you read it in full if you can.

The TikTok deal continues to hang in the balance and Apple sets up (online) shop in India…

China’s state media denounce TikTok deal as ‘dirty and unfair’ (Financial Times, Ryan McMorrow) shows that several Chinese state media groups are criticising the current ByteDance deal with Oracle and Walmart, saying that Beijing should not approve it. Given that there is still confusion over who is going to be the dominant partner in this relationship, there seems to be a lot of room for interpretation. Oracle says that ByteDance would have “no ownership” in TikTok Global because of the share structure whereas ByteDance says it will be a 100%-owned subsidiary and that it would maintain an 80% stake. The drama continues…

In Apple launches first online store in India (Financial Times, Stephanie Findlay) we see that Apple opened its first online store in India yesterday in order to increase sales and manufacturing capacity in the country. * SO WHAT? * Apple has been trying for ages to expand its presence in India – the world’s second biggest mobile phone market (China is #1) – but has been held back by rules forcing foreign companies to source at least 30% of components locally. These rules started to relax going into the end of last year in order to attract wavering investment in China and it has also benefited from schemes to boost smartphone manufacturing. On a longer term basis, if this all works out, Apple could start exporting phones made in India globally – but this won’t happen just yet as local manufacturing capability of some sophisticated components is still lacking. Still, this is a positive move by Apple which clearly wants to get exposure in a market with huge potential. If it can manufacture there and export globally, its could potentially be excellent for margins due to low input costs.

Both Tesla and Nikola suffer and California commits…

A tricky period for electric vehicle manufacturers continues in Investors reverse out of Tesla after Musk’s flat Battery Day (The Times, James Dean) as investors felt rather short-changed by the lack of any amazing developments hinted at by Elon Musk in the build-up to Battery Day on Tuesday. * SO WHAT? * Everyone wanted to hear about things like solid-state batteries and hydrogen and all they got was a promise to halve battery costs by 2022. Tesla’s market value fell from over $400bn on Monday to $354.4bn yesterday as a result.

The ridiculousness continues in Nikola’s talks with major energy firms stalled following short-seller report (Wall

Street Journal, Ben Foldy and Mike Colias) as talks between Nikola and a number of potential partners – including BP – have paused due to allegations made in the Hindenburg Research report that has given the glitzy start-up a huge kicking. I wonder who else will be abandoning – and what General Motors is going to do considering it announced it was buying an 11% stake in the company very recently. Heads will surely roll if things start to get any worse. A fiasco!

California to ban sales of new gas-powered cars starting in 2035 (Wall Street Journal, Alejandro Lazo, Russell Gold and Micah Maidenburg) shows that California has drawn a line in the sand for the end of the internal combustion engine. * SO WHAT? * Nice. But, let’s face it, 2035 is ages away 😂. Mind you, if enough states and countries decide to do something similar it will provide car companies even more incentive to get their electric act together.

WeWork sells out and Joules does well…

WeWork sells majority stake in China business, cutting costs (Wall Street Journal, Konrad Putzier) highlights the office provider’s decision to sell down its interest in its China business and will cede operating control to a group led by investment firm Trustbridge Partners for $200m. * SO WHAT? * This would imply that the company is perhaps

now focusing less on growth at all costs and being more realistic about its prospects. They haven’t completely sold out, though – so they will still get a bit of any upside. 

Joules sparkles after online sales surge (The Times, Louisa Clarence-Smith) highlights success for Joules as it saw online sales rise by 45% in June, July and August and group revenues rose ahead of company expectations. It was, however, 19% lower than the equivalent quarter last year due to store closures during lockdown. A rare ray of sunshine in an otherwise stark high street landscape.

…in other news…

I thought I’d leave you today with an interesting initiative by a bus company to make money while passengers stay away in Company uses empty buses to create giant maze after tours drop due to COVID-19 (SoraNews24, Oona McGee). Surely TfL should do this! Double-decker London buses would be way better for this!