This is an amalgamation of the “best bits” of the daily weekday newsletter/blog woven together to form a concise and coherent view on the things that matter in the commercial and economic news of the week.
THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily. You will need a FULL SUBSCRIPTION to be able to click through all the links which take you to the relevant articles.
IT WAS A FUN WEEK IN MACRO THIS WEEK...
- Trump suggested an extension to the US-China trade truce deadline due at the end of this week (Monday) which got markets excited, but then he tried to keep everyone on their toes by saying that a deal “might not happen” (Tuesday). Still, he failed to reach an agreement with Kim Jong Un in the Vietnam summit (Thursday) while his ex-lawyer was doing a hatchet job on his character at a Congressional hearing. Despite all this, the US economy is growing well (Friday) albeit at a slower rate
- British PM Theresa May gave in to pressure and said that Brexit could be put on hold (Wednesday) but all this Brexit uncertainty continues to hit the housing market (Friday) and individual estate agents
- The tension continued between Pakistan and India (Thursday) which escalated to an aerial incursion that ended in the capture of an Indian pilot. Tensions will be diffused as Pakistan is to return him unharmed. In the meantime, India’s GDP growth rate slowed to its lowest rate in five quarters (Friday), although it’s still good compared to many other countries! Even so, these are testing times for PM Modi as he heads into elections shortly
THERE WERE SOME INTERESTING TECH ANNOUNCEMENTS...
- Microsoft announced its new Augmented Reality glasses (Monday), the HoloLens 2 headset, at the Mobile World Congress in Barcelona. Microsoft is aiming this creation at corporate and commercial consumers and it combines physical and digital worlds through its transparent visor. It will be commercially available later this year for $3,500 and comes with a new optical system which more than doubles the field of view versus the older version, is less bulky and has faster chips
- Huawei announced a new bendy phone (Monday), called the Mate X, that has impressive tech and is thinner than Samsung’s recently announced Galaxy Fold. However, it’s pretty pricey at $2,600 for a handset which I suppose makes Samsung’s Galaxy Fold look like a positive bargain in comparison at a “mere” $1,980 ????
- China’s Xiaomi announced it would be tripling the number of its shops in Europe (Wednesday) within this year. It will be interesting to see if this company can make meaningful inroads into this highly competitive mobile phone market
THE RETAIL SECTOR SAW SOME DRAMA AS WELL...
- M&S confirmed it was in talks with Ocado (Wednesday) about a joint venture and then announced more details about the deal (Thursday) which many investors saw as being rather expensive. I think that M&S is just paying the price for jumping at a very late stage onto the e-commerce bandwagon – but Waitrose is going to suffer as things stand as its own offering is clunky and has a narrow product offering in comparison. Unless it puts a Plan B in place it will be left wanting when Ocado “abandons” it in September 2020
- British chocolatier Hotel Chocolat continues to go from strength to strength (Wednesday) and is salivating (metaphorically, obviously) at the thought of snapping up prime retail space while others have problems
- German e-tailer Zalando surprised everyone by announcing a strong recovery in fortunes (Friday)and wants to both deepen and broaden its current relationships with fashion brands to keep the party going
- Gap delighted investors by announcing it would spinoff Old Navy into a separate entity (Friday) meaning that both sides could focus on their core offerings and allow investors more specific exposure to different customer avatars
- Ted Baker disappointed investors as it announced a profit warning (Thursday) only one month after it said officially that everything was going OK. The company announced a £10m shortfall in profits due to a £5m write-down of unsold stock, a £2.5m loss on forex and £2.5m of product costs following a systems upgrade
...AND IT WAS A GOOD/BAD WEEK FOR...
- Spotify, which rolled out its service in India (Thursday) although Warner Music Group is proving to be a pain (Tuesday). This market clearly has massive potential!
- Lego managed to unveil strong sales and profits (Thursday), thus bucking the trend of the wider toymaking industry. It did particularly well from Harry Potter and Star Wars-themed products but the struggle will continue with prising kids away from digital devices
- Tesla announced a $35,000 Model 3 (Friday), thus fulfilling a promise it made back in 2016 to make its car more accessible by the masses. The downside for employees is that he’s going to sack a boatload of them because he is going to push all sales online
- It was a BAD week for James Bond’s fave car manufacturer as Aston Martin announced a greater than expected loss (Friday) which left investors both shaken AND stirred. This was mainly put down to a £136m bill for taking the company to market! Brexit is the next kick in the soft bits so there’s a lot of hope riding on Aston’s DBX SUV, which is due to go into full production next year
Two stories made me laugh this week: Theresa May and Giuseppe Conte practice pool (BBC https://tinyurl.com/y5b4fp23) which has the air of one of those JOE viral videos (but it’s real!) and Google Maps users spot something very rude in background of Street View shot (The Mirror, Zoe Forsey https://tinyurl.com/y4otob32) which is admirable because of the quick-thinking of the protagonist!
Have a fun weekend!