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.
THIS WEEK SAW SOME BIG DECISIONS...
- Australia decided to cut its interest rate again (Wednesday) for the second time in two months to head off any economic slowdown so it’s now at 1%. The country hasn’t had a recession since 1991 and clearly wants to maintain this record!
- China said that it was going to create its own equivalent of the NASDAQ (Monday) which would give domestic tech companies a viable alternative to listing overseas. This sounds good, but it will take a while to work given the track record of the competition
- Opec decided to leave oil production quotas unchanged (Tuesday) citing the rapid growth of the US shale oil industry and global economic slowdown which they think could cause an increase in supply and a decrease in demand respectively
- Iron ore prices continue to look toppy at the moment (Tuesday) as two dents in supply (mine closures in Brazil following the Vale-owned dam collapse and lower iron ore exports from Australia due to cyclones adversely affecting output) caused the Australian government to forecast that global seaborne supply would fall by 4% this year
- Then in the world of cryptocurrencies, US lawmakers called for Facebook to suspend its launch of Libra (Thursday) until they had had the chance to have a proper look at it while the UK financial regulator, the FCA, said it would stop retail investors trading in financial instruments connected bitcoin and other cryptocurrencies (Thursday) due to the difficulty in valuing cryptoassets
THE HIGH STREET ALSO SAW A LOT OF ACTION...
- It was a bad week for William Hill employees as the company announced 700 store closures (Friday), shoe shop Office announced it was looking at closing outlets (Tuesday) and Superdrug had to halve its dividend to shareholders (Monday) due to profits being wiped out by higher staff costs
- It was, however, a good week for Yo! Sushi, Five Guys and Majestic (Wednesday) who announced a new acquisition in the US, expansion in the UK and a new bidder for the chain of shops respectively. Primark managed to put in a reasonable performance despite bad weather over the quarter (Friday) and announced further US expansion
ELECTRIC VEHICLES HAD A MIXED WEEK...
- The UK saw poorer sales of electric vehicles (Friday) due to consumers shying away from making big ticket purchases, but Jaguar Land Rover announced a new major investment in electric vehicle production (Monday) which should help in moving it away from reliance on diesel technology
- Tesla surprised on the upside (Wednesday) as it managed to deliver a record number of cars (95,200) in the second quarter of this year. This is particularly impressive given that it had only delivered 63,000 cars in the previous quarter. Great, but will it be too little too late given that all the other major car manufacturers are coming out with appealing offerings?
- On the other hand, the much-hyped Chinese EV start-up Nio saw some senior managements departures (Tuesday). This has come shortly after the recall of 4,800 of their SUVs following reports of spontaneous combustion, which precipitated a 75% fall in the company’s share price. It seems that there’s much work to be done here…
THERE WAS SOME BIG NEWS IN INVESTMENT BANKING...
- Foreign companies will be able to do more business in China sooner than expected (Wednesday). Chinese premier Li Kequiang announced in a speech at the World Economic Forum in Dalian that foreigners would be allowed to have majority ownership of domestic securities companies by 2020 – an opening up of China’s financial sector one year ahead of schedule
- The troubled Deutsche Bank is to make some big big cuts (Thursday) and put over €50bn of its assets into a “bad bank” in its bid to turn the business around following its failed deal with Commerzbank. Over 20,000 jobs cuts are rumoured to be in the offing with US equities trading and rates divisions expected to be hit hardest by the cuts
This week, I have to say that my favourite “alternative” news story was this: Someone is putting football managers’ hair on politicians and it’s glorious (Metro, Joe Roberts https://tinyurl.com/y6e3dgmf). Quality. And some impressive Photoshops skills on display also! Have a great weekend everyone!