Watson’s Weekly 04-04-2020

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

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

• IN THE US, social distancing measures were extended (Monday) and Trump even had to admit things are getting bad (Thursday) saying that Americans faced a “very, very painful two weeks” and that deaths could number between 100,000 and 240,000. There was also a massive leap in unemployment (Friday) as the coronavirus outbreak continues to bite. It is worth noting that the US approach puts more emphasis on boosting unemployment benefits whereas the UK and European approach is more about underwriting a large proportion of furloughed workers’ wages
• IN CHINA, it sounds like things are cautiously edging towards normality (Wednesday) as factory activity is picking up, but I think recovery is far from being a given as there is always risk of a “second wave” as immigrant workers and students return to work
• REGARDING MARKETS, I think that no-one knows what is going on at the moment. I don’t think we’ll get a handle on things until we have a proper idea of the magnitude and duration of the shock, how quickly businesses and individuals can get their hands on the money promised to them by their respective governments and what the post-coronavirus world might look like. Clearly, not all investors can or want to get out of the market at the moment, but share prices are all over the place and I hear that trading is very difficult as a result

• Global pharmaceuticals companies are now working together and pooling data and resources (Tuesday) in order to combat the coronavirus. They have also made moves to make any potential treatments more accessible. AbbVie (which makes a potential treatment called Kaletra) has given up its global intellectual property rights for the treatment, Johnson & Johnson said it was going to make its vaccine available on a not-for-profit basis and even Gilead Sciences, which faced massive crititism from activists, decided to give up its “orphan drug” designation for its potential treatment remdesivir. For an absolutely brilliant graphic which gives you an overview of what stages each drugs are at, you should definitely have a look at https://www.visualcapitalist.com/every-vaccine-treatment-covid-19-so-far/
• Everyone is trying to advance contact tracing (Tuesday) which involves the use of bluetooth on phones to track the potential spread of infection. It worked really well in Singapore with an app called TraceTogether and such things have worked in China, but there will probably be more concern here over potential privacy/human rights issues re the implementation
• British engineers are getting together to produce ventilators (Tuesday) as VentilatorChallengeUK brought together a consortium of aerospace, automotive and other engineering companies from companies including Airbus, Ford and McClaren. The engineers are from industries that have been in decline over the years and I do wonder whether this repurposing will potentially give these companies an interesting alternative direction when this whole thing dies down
• A number of problems have been highlighted this week, though, as masks coming from China have been rejected by medical staff (Monday) for being of poor quality and medical gloves could be the next thing to run out (Tuesday) as around two-thirds of the world’s supply is made in Malaysia and the country is struggling with a recent influx of global orders. Malaysia is in lockdown for at least one month and the factories that are open are running at less than 50% capacity. There is an order backlog of four months

• In the UK, home sales of beer shot up exponentially (Monday) – not surprising since off-licences have been deemed “essential” and that this is one of the only
• Restaurants that have “drive-in” facilities are keeping sales alive (Monday) because of their contactless nature. Burger King (owned by Restaurant Brands International), KFC (owned by Yum Brands) and McDonald’s are managing to keep things ticking over. Interestingly, Wendy’s “drive-thru” business now represents about 90% of its US business (versus about two-thirds before the coronavirus)
• Zoom, which has been seeing a massive uptick in usage, has been subject to an increasing amount of criticism. There were general grumbles about lax security (Monday) which then resulted in the New York state attorney-general, Letitia James, getting involved (Wednesday). Zoom subscribers have since been informed by the company of tightened security. It’s good that the company has addressed the issues quickly because if this drags on, all the gains they have made will just slip through their fingers
• Gaming companies, content streamers and various other apps have all benefited from people being trapped at home (Friday). This is obviously great for those benefiting right now, but I think that the real test will come with keeping the gains that they’ve made as everyone’s lifestyle returns to normal – especially if people start to rein in extraneous expenditure.

• I have added a number of updates to Watson’s Yearly this week. There’s a load of cancellations of sporting events, movie releases and the postponement of the Democratic National Convention from July the week of August 17th. Also, I’ve added stories about the US swiping a big order of facemasks from Germany and other things. You really should have a read of Watson’s Yearly as it has LOADS of information in it that will be useful to you – especially if you want to see things from a global perspective. It’s pretty long, so you may not be able to read it all in one sitting, but you should revisit it from time to time!

My favourite “alternative” stories this week all have to do with things that people are doing to get themselves through the current situation. Woman’s recipe for Greggs-inspired bakes you can make at home for just 37p (The Mirror, Paige Holland https://tinyurl.com/ukf74qo) is great for people who yearn for familiar tastes they used to take for granted and People around the world are playing bingo with neighbors from their balconies (Insider, Monica Humphries https://tinyurl.com/t7kc9kt) makes your heart sing at the way we are seeing outbreaks of community spirit breaking out all over the world! However, I absolutely love what the parents in this story did for their son on a very important birthday: Parents convert garage into ‘Club Quarantine’ for their son’s 21st birthday bash (The Mirror, Paige Holland https://tinyurl.com/ukdu88h). What absolute legends!