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.
HONG KONG GETS A NEW SECURITY LAW, PUTIN RULES AND THE UK OPENS UP...
- Hong Kong saw a new security law imposed from China (Tuesday), the opposition party disbanded (Wednesday) and inquiries on how to leave/get money out of the country shot up (Thursday). The new law applies both to people within Hong Kong and outside it (Wednesday), so foreign sympathisers could be prosecuted on entry to Hong Kong. Although some of its citizens may want to leave, I wonder who would take them? I wouldn’t have thought that surrounding countries would want to annoy China by taking in Hong Kongers and it may be difficult for those further afield because many countries just aren’t in a financial position to take in an influx of immigrants
- Russia’s President Putin will be able to remain in power until 2036 (Thursday) as his constitutional amendments were voted through convincingly. I’d say that this was within expectations despite his approval ratings being particularly weak leading into the coronavirus outbreak
- UK GDP had its worst quarterly fall since 1979 (Wednesday) – but then of course it did (although it does show you how dire things were in 1979!) given everything’s been shut down! On the other hand, Bank of England figures showed that British household savings were very strong (Tuesday), which some will take as a potential sign of a pent-up desire to spend bubbling beneath the surface of Covid-nervousness. The Bank of England’s chief economist, Andy Haldane, said that there could be a sharp recovery (Wednesday) but that depended on unemployment going down and spending going up – not a given, considering that many expect rising levels of unemployment when the government’s furlough scheme peters out. If households aren’t confident about their finances and the economy at that point, they won’t be spending either
BOTH HIGH STREET AND MAIN STREET HAVE ISSUES...
- In the US – Apple and McDonald’s were shutting outlets (Thursday) as the number of coronavirus cases climbed in some areas. Pizza Hut’s biggest US franchisee, NPC International, filed for bankruptcy (Thursday) as it failed to get any money out of parent company Yum Brands. It had been in trouble before the whole coronavirus thing kicked off as they blamed the usual things in casual dining – tougher competition, rising minimum wages and higher ingredient prices – and the outbreak has just pushed them over the edge
- In the UK – Byron Burger (Tuesday), TM Lewin, Harveys, Bensons for Beds (Wednesday) and Cafe Rouge owner Casual Dining Group went into administration (Friday). Then the owner of Caffè Ritazza and Uppercrust – SSP – announced it would be cutting 5,000 jobs (Thursday) and Arcadia (owner of Topshop, Dorothy Perkins etc.), Harrods and John Lewis announced 1,200 job cuts (Thursday) – with the latter also looking at potential store closures. Pizza Express said it would withhold rent payments (Tuesday)…
- …and wasn’t alone on that, which was probably the reason why retail landlord Intu went into (#seewhatIdidthere) administration (Monday). It’s interesting to see the difference between the fortunes of landlords exposed more to offices and the ones exposed to the struggling retailers (Thursday). British Land is more exposed to the latter while Hammerson has more exposure to the former
- It wasn’t all bad, though – Frasers Group (formerly called Sports Direct) lifted its stake in Hugo Boss (Tuesday) from 5.1% to 10.1% and Primark’s sales did well on store opening (Friday)
...AND TECH SAW SOME DRAMA...
- Facebook continued to get flak for not doing enough to stop the spread of hate speech (Monday), but the irony is that Twitter will probably suffer more as it is much smaller and will miss the ad revs more (advertisers are boycotting online ads this month). TBH, although Twitter took the high road recently on the spread of inflammatory news, it still has its fair share of cyber-bullies, trolls and weirdos. Zuckerberg believes that the companies will return soon enough – and I think he’d be right. If you are cutting your advertising budget, it is hard to ignore the attractions of more targetable digital advertising – and Facebook is where you want to be
- India blocked a number of Chinese apps (Tuesday) in retaliation for the recent violence on the Himalayan border. Six of the top ten downloaded apps in India are from Chinese companies – and this includes TikTok and WeChat. This won’t be great for the Chinese apps affected as they see India as a huge growth market
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates: watch this space!
My favourite “AND FINALLY…” stories this week were Dog shows off hilarious toothy grin after stealing false teeth from drawer (The Mirror, Luke Matthews https://tinyurl.com/yd8n6q9b) and the highly addictive and impressive taekwondo dance where everyone looks like they should be in a girl/boy band!