Monday 09/03/20

  1. In CORONAVIRUS & OIL NEWS, Italy goes into lockdown, anti-coronavirus efforts increase and Saudi Arabia ignites an oil price war
  2. In CONSUMER TREND & RETAIL NEWS, US make-up takes a turn, US plant-based food sales increase and the UK high street calls for more support
  3. In INDIVIDUAL COMPANY NEWS, Princess Cruises get turned away and Merlin waits for China go-ahead
  4. In OTHER NEWS, I show you ways to stop your smart devices spying on you…



So Italy gets dramatic, the world ups anti-coronavirus efforts and Saudi Arabia starts an oil fight…

Italian lockdown puts 16m people in quarantine (Financial Times, Davide Ghiglione, James Politi and Miles Johnson) highlights that more drastic measures are being taken in the face of a continued increase in the numbers of coronavirus cases and deaths in Italy. The government has restricted movements in Lombardy and its capital Milan, effectively putting 16m people in quarantine. It has also closed museums, schools, gyms, universities and ski resorts. The restrictions have also been implemented in Parma, Modena, Padua and Venice. * SO WHAT? * Although Conte said he wanted to contain the virus, news of these restrictions leaked a few hours before the official announcement, prompting an exodus of people from the region before they came into force. The Italian economy was already looking tricky before, but the coronavirus outbreak is highly likely to push it over the edge into recession.

Efforts to battle coronavirus escalate around the globe (Wall Street Journal, Talal Ansari, Chun Han Wong and Erin Ailworth) takes a look at current developments around the world. The virus is now in well over half of the states in the US (with the majority of deaths in Washington state and states of emergency being declared in New York, California, Florida, Kentucky, Maryland, Utah, Washington and Oregon), Italy imposed major restrictions (as per the above), the Maldives started to impose stricter health screenings for travellers in response to reporting its first two cases on Saturday and Iran has urged people to stop travelling in the country. If official figures are to be believed, the rate of infection appears to be slowing down in China. The drama continues.

In Oil crash as Saudi price war routs the market (Daily Telegraph, Tim Wallace and James Cook) we see that lack of progress at last week’s meeting with Russia prompted Saudi Arabia to go nuclear and increase oil production (remember, they had been recommending doing the exact opposite last week) driving prices down by 30% following the announcement. This was the steepest price fall since 1991 and brings prices down to levels not seen since 2016. Brent has fallen from around $70 two months ago to $35. According to Saudi Arabia launches oil price war after Russia deal collapse (Financial Times, Anjli Raval, David Sheppard and Derek Brower), Saudi Arabia has gone even further than increasing production – it has offer its crude at discount prices to win new customers! It is basically saying to the US shalers and Russia “ave some of that!”.  * SO WHAT? * If this move is sustained and not just a one-off, it may stimulate the world economy as airlines and logistics companies could benefit – and consumers would potentially have more money to spend as petrol will be cheaper. On the other hand, this could suck the urgency out of green energy efforts and kill oil companies with big debts. It will also cause a headache of epic proportions for Russia and US shale producers, especially as Saudi Arabia is offering big discounts to customers in north west Europe who normally buy Russian oil as well as to customers in the US and Asian markets. Producers like Nigeria and Angola are likely to be hit hard by a lower price as they can’t easily increase output and have limited scope to borrow money to tide them over. If everyone increases oil production and OPEC loses control of its members, I would expect oil prices to plunge further at least in the short term – but there will be more volatility in the longer term as production limits go ignored. One of the main reasons why OPEC was founded in the first place was to control the volatility, but if everyone just goes off to do their own thing, then the cartel will become toothless.



US make-up sales falter, US plant-based food sales increase and the UK high street cries for help…

Bubble bursts for US make-up market (Financial Times, Leila Abboud) shows that the “cake face” make-up look that has been powering cosmetic sales over the last few years may be on the wane. Figures from market research firm NPD Group show that sales of high-end make-up have fallen by 7% – the first time they have fallen for ten years. On the other hand, US skincare sales increased by 5% – overtaking make-up sales growth for the third consecutive year. Established names like L’Oreal, Estee Lauder and Coty – as well as newer independent brands like Anastasia Beverly Hills and ColourPop Cosmetics – have all been suffering as a result of this shift to a more natural look. Outside the US, cosmetic sales have increased significantly in Asia but been mainly flat in Europe. * SO WHAT? * These things just go in cycles. Trends vacillate between make-up and skincare all the time and it seems that we are at a turning point. I also wonder whether we have also hit “peak beard” as well. Interestingly, NHS workers have recently been asked to go clean-shaven where possible – as per NHS urges staff to shave beards in fight against coronavirus ( – and I wonder whether this will signal facial hair’s longer term demise. If so, razor makers like Edgewell Personal care (which owns brands like Wilkinson Sword, Schick etc.) and Procter & Gamble (which owns Gillette, among other things) may stand to benefit…

Sales of plant-based foods surge in US (Financial Times, Emiko Terazono) shows an 18% increase in US sales last year as consumers show an increasing interest in dabbling with alternative proteins. According to a report commissioned by the Good Food Institute and the Plant Based Foods Association, overall plant-based food sales increased by 11% in 2019 versus the whole US retail food market, which only grew at 2%. Increased concern for the environmental impact of keeping livestock and animal welfare are among the drivers behind the boost and innovations in this area and the momentum seems to be continuing. * SO WHAT? * It’s not only been meat substitutes that have seen a boon – sales of plant-based milk is also surging in popularity, with almond milk being the most popular milk-alternative and oat milk being the fastest-growing alternative. The agricultural industry will no doubt continue to resist, but if customers vote with their wallets, the farmers are going to have to listen.

Meanwhile, back in the UK, Perfect storm of bad weather and business rates fuels crisis (The Guardian, Simon Godley) brings the gloom as the latest figures from Springboard show that severe rain hit high street visitor numbers in February and data from the Centre for Retail Research shows that job losses this year in the retail sector currently stand at 18,466 as at February 27th. * SO WHAT? * This will put even more pressure on Rishi Sunak to do something about business rates in this week’s Budget and just acts as further proof that the retail sector is having a nightmare. I would have thougth that it’s likely to get worse as well because the latest figures don’t take into account falling customer numbers due to coronavirus panic.



Princess Cruises faces more problems and Merlin awaits China green-light…

In a quick scoot around some of the other news stories today, Health officials block several Princess Cruises ships (Wall Street Journal, Erin Ailworth and Costas Paris) shows that the US Centers for Disease Control and Prevention ordered the Regal Princess to stay off the coast

of Florida and issued a no-sail order for the Royal Princess in Los Angeles while staff and passengers from the Grand Princess will dock in Oakland – only to be quarantined. All the ships are owned by Carnival Cruises. This will be devastating for Carnival and the cruise industry in general IMO. I think it will take years for them to recover from this.

Meanwhile, Merlin waits for the magic word in China (The Times, Dominic Walsh) shows that Merlin Entertainment is expecting to be given the green light to open some of its attractions in China which have been closed as a result of the coronavirus. * SO WHAT? * China has become one of Merlin’s key markets and so any return to normality will obviously be welcomed.



And finally, in other news…

Today, I thought I’d leave you with something that might help you in How to stop your smart home spying on you (The Guardian, Davey Winder Given the amount of smart devices we tend to have knocking around, this makes for interesting reading…

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Some of today’s market, commodity & currency moves (as at 0731hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq**DAX *CAC-40 *Nikkei **Shanghai **
6,463 (-3.62%)24,531 (-5.16%)2,818 (-5.19%)8,57611,542 (-3.37%)5,139 (-4.34%)19,699 (-5.07%)2,943 (-3.01%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

(markets with an * are at yesterday’s close, ** are at today’s close)