Watson’s Weekly 06-09-2025

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 COLOURED HIGHLIGHT 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 TARIFF NEWS…

• Following last week’s court judgment which ruled that Trump had overstepped his authority on imposing tariffs, the president is appealing to the Supreme Court to overturn the tariffs. A ruling on this is expected before the year is out.

IN TRUMP THINGS…

• IN COURT JUDGMENTS – A San Francisco judge blocked the deployment of the National Guard in California despite the White House saying that the demonstrations there qualified as a “rebellion”, thus triggering a clause in the Posse Comitatus Act allowing him to do so. However, the judge ruled that there was no rebellion and troops should be pulled out from September 12th. Also, the court of appeals for the District of Columbia temporarily reinstated a Democratic FTC commissioner  who Trump had been trying to fire. She’s allowed to return while her appeals process continues. She’s the last remaining Democratic commissioner at the FTC! The government may well appeal the decision…
• IN TRUMP STICKING HIS OAR IN – ECB president Christine Lagarde voiced concerns over the implications of Trump’s constant pressure on the Fed – i.e. that it will lose its independence – while Trump called for pharma companies to publish more data on the efficacy of their Covid vaccines to settle all the current squabbling. He also signed an executive order to change the name of the Department of Defense to the Department of War because he said that America won loads of conflicts when it originally had that name. This is obviously just posturing but aligns with Trump’s current way of doing things.

IN REGIONAL/COUNTRY THINGS…

• IN THE US – Hedge fund billionaire and Bridgewater Associates founder Ray Dalio observed that “gaps in wealth”, “gaps in values” and the erosion of trust were behind the “more extreme” policies in the US. He added that other investors were too scared of Trump to criticise him and the country’s heading towards an autocracy. Analysis by Redfin showed that US home ownership fell for the first time since 2016 thanks to a combination of rising property prices, high mortgage rates and economic uncertainty while Trump’s immigration crackdown means that the country is on track for its first ever population decline!

IN ASIA…

• Xi, Putin and Kim cosied up at China’s massive military parade but India’s Modi was also showing the love. Interestingly, this is the first time that Xi and Kim have met in person for six years. Some say that this new direction reflects concerns by China that North Korea is getting too close to Russia.
• IN INDONESIA – markets fell initially thanks to civil unrest that was prompted by new housing allowances of $3,000 for parliamentarians. Protests broke out over economic inequality, the lack of jobs and police brutality. Eight people were killed while mobs broke into and looted the homes of Indonesia’s finance minister and a number of lawmakers over the weekend.
• IN THAILAND – Former businessman Anutin Charnvirakul, who became known for his support for the decriminalisation of cannabis, was voted in as Thailand’s new PM following a period of political turmoil. He has promised to dissolve parliament within four months and call a general election as part of a deal he made to get support for the vote.

IN EUROPE…

• IN TURKEY – Markets fell after an Istanbul court ruled that the appointment of the head of the main opposition party was invalid. Dozens of opposition mayors and officials have been arrested in clampdowns, weakening any opposition to Erdoğan’s power. Does this drowning out of opposition voices sound at all familiar?!?
• IN THE UK – borrowing costs rose at the fastest pace in the G7, the pound weakened as a result and Rachel Reeves announced that she had opted for a late budget (November 26th), so we’ll all be in limbo until then, possibly fearing the worst. There was more bad news for the government’s plans about housing as the latest data from the Mineral Products Association (MPA) showed that cement production has hit a 75-year low, which reflects the ongoing gloom hanging over the housebuilding industry as government data showed construction of 35,640 homes in Q1 this year. This is a major shortfall versus the quarterly target of 75,000 that is needed to hit its big target of 1.5 million homes by 2030. In other news, Angela Rayner resigned over a tax scandal and Starmer instigated a major cabinet reshuffle.

IN COMMODITIES NEWS…

• IN OIL – ConocoPhillips announced that it would cut up to 25% of its staff by the end of 2026 as falling oil prices continue to take their toll. The company said that most of the cuts would fall this year and affect both full timers and contractors.
• IN GOLD – prices surged following Trump’s continued pressure on the Federal Reserve which has caused investor concern. They breached $3,500 per ounce and Goldman Sachs subsequently said it could go to $5,000.

IN ENERGY NEWS…

• Orsted got a handy $939m from Equinor, Norway’s state-controlled oil and gas group (which is kind of ironic, don’t you think??), as the investor bought into the rights issue in order to maintain its 10% stake. This is a rare bit of positive news from a company that has taken a bit of a beating recently, particularly as a result of Trump’s dislike of wind power.
• Beijing has ordered a reining in of capacity in the solar sector. China is all-powerful in solar power, but overcapacity has not just hurt foreign competitors, it has also ended up cannibalising itself after some record years.

IN CRYPTO NEWS…

• The Trump family’s World Liberty Financial token, WLFI, fell by a chunky 25% on its market debut this week but there was more to cheer around the Trump family dinner table as the crypto venture American Bitcoin, which Eric Trump co-founded, saw its share price boom by 110% initially on its market debut. Eric Trump and Donald Trump Jr are major shareholders in the company.

IN BUSINESS TRENDS…

• The latest data from BDO shows that UK manufacturers’ confidence hit a nine-month high in July thanks to Trump’s tariffs not being as bad as manufacturers had originally thought.

IN INVESTMENT NEWS…

• The latest Bank of America survey showed that investors are buying up emerging market stocks because they are being seen as undervalued. On the other hand a whopping 91% of fund managers said that US equities were overvalued.
• In the UK, seven UK local authority pension funds look set to combine assets with a bigger fund manager called Border to Coast. This is all part of a broader plan by the chancellor to create fewer managers with bigger financial clout.
• Saudi Arabia’s PIF made an $8bn writedown on the value of its holdings in gigaprojects – including Neom! Its finances are being hit by cost overruns and weaker oil prices. The PIF owns five gigaprojects which are part of wider plans to diversify the kingdom’s income away from oil.
• IN M&A – China is creating the world’s biggest shipbuilder by merging two state-controlled shipbuilders – China State Shipbuilding (CSSC) and  China Shipbuilding Industry – in a deal worth $16bn. The enlarged company will have a single listing on the Shanghai Stock Exchange. Brussels approved the €4.1bn acquisition of Just Eat Takeaway by Prosus, Centrica bought a £1.5bn gas terminal – Europe’s biggest gas import terminal – in a sign of ongoing commitment to fossil fuels (well it is a gas company!) and Canadian t-shirt maker Gildan got closer to buying US underwear maker Hanesbrands.

IN EMPLOYMENT TRENDS…

• The latest KPMG-REC monthly survey showed that falling demand for workers is hitting wages. Vacancies also dropped at their fastest pace since April last month.
• The latest data from the ONS showed that UK employers have been cutting back on bonuses and hiring over the last few months thanks to economic uncertainty. This was also reflected in a dramatic fall in profits at agency recruiter PageGroup.

IN BANKS NEWS…

• HSBC voiced concern about its commercial property loan book as Hong Kong’s prime office rents have dropped by over 20% since 2022 and vacancy rates have hit record highs of around 19%! It said that 73% of its commercial property loans are risky. This figure was less than 30% just a year ago!
• Santander became the latest one to relax lending rules to allow homebuyers to get a bigger mortgage. Now applicants earning £100,000 or more can now borrow up to 5.5 times their income with a deposit or equity of up to 10% of the home’s value!

IN INSURANCE NEWS…

• Admiral has decided to put aside £50m to settle claims that it undercompensated customers for car claims. It’s not the only insurer to do this but it’s the first one to acknowledge its shortcomings and others are expected to follow.

IN FINTECH NEWS…

• Klarna’s loss has widened over Q2 ahead of its much-anticipated New York listing. Klarna is keen to tap into current market feelgood – and who could blame it! It has been trying to move away from its BNPL roots to morph into becoming a neobank offering debit cars, interest-bearing loans and the whole shebang.

IN CONSUMER TRENDS…

• The latest BRC-KPMG figures highlighted a better-than-expected July for spending as clothing and homeware sales were up. A similar conclusion was drawn from the latest figures from Barclays as shoppers spent on affordable luxuries.
• Consumers were not, however, spending money on home improvements according to Marshalls, a specialist in pavements, pavoirs and roofing. The company announced an unexpected profit warning last month.

IN RETAIL NEWS…

• River Island managed to avoid collapse as a High Court judge approved its restructuring plan.
• Topshop looks like making a high street comeback as there are plans for new physical stores. Asos bought it back in 2021.
• Troubled fashion accessories retailer Claire’s has appointed administrators in UK and Ireland just a week on from its parent company filing for bankruptcy in the US and Canada. This is obviously a great shame for those involved.

IN CONSUMER GOODS…

• Birkenstock put in a strong sales performance over the quarter, which possibly casts doubt over Crocs’ doom and gloom last week when it said that the “ugly shoe trend” looked like it was coming to an end.

IN LEISURE NEWS…

• IN TRAVEL – Tui said that tighter border rules are putting European visitors off going to the US. Despite this. the company posted market-expectation beating pre-tax profits and was confident enough to upgrade its full-year profit guidance.
• IN RESTAURANTS – Pasta Evangelists announced plans to open 100 new restaurants, creating up to 1,500 jobs. Will this become the next “Jamie’s Italian” or “Carluccio’s”?? The world’s biggest pasta producer, Barilla, has a majority stake in the company (which it bought for £40m) so the restaurant chain is certainly well financed.
• IN GAMBLING – the CEO of gambling company Entain whinged about punters going to the black market to gamble if the government taxes it too much. I don’t think anyone would be surprised about this reaction!

IN CHIP NEWS…

• Nvidia and AMD are going to pay away 15% of the revenues they get from selling chips to China to the US government as part of the deal for them to keep selling into the China market. Trump also sounded more open to the idea of Nvidia selling more advanced AI chips to China but Beijing is not so keen and is asking tech giants like Alibaba and ByteDance to justify why they’re using Nvidia chips and not domestic alternatives.
• Although Apple managed to avoid a 100% chip tariff, it did so by pledging a huge chunk of money to increase production in the US. However, smaller vendors and suppliers just don’t have the same ability to do this so they look like they’ll be hugely impacted because they don’t have the same ability to promise huge investment in US production.

IN AI NEWS…

• South Korean AI start-up Upstage has caused a stir because it has produced an LLM that performs on a par with more advanced and expensive LLMs made in the US and China. It has become the only Korean LLM to be classified as a leading edge “frontier model” by the benchmarking analysis provider Artificial Analysis.
• Anthropic has offered the Claude chatbot to US lawmakers for $1! It’s thought that this will encourage the wider adoption of AI tools in the federal government. OpenAI already has such an arrangement in place and it’s thought that Google is also looking to do something similar.
• Perplexity AI has seemingly made a $34.5bn offer to buy Google Chrome’s browser. This sounds somewhat bizarre given that the whole of Perplexity AI itself is only worth half that! It said that it has the finances in place but you do wonder…
• Musk is threatening to sue Apple because it keeps putting ChatGPT ahead of Grok on the download charts. I think this is just noise because less than 24 hours before this he was celebrating Grok hitting #1 in Apple’s download charts in Singapore.
• Sam Altman and OpenAI announced plans to invest in a venture called Merge Labs that will connect human brains with computers, in competition with Musk’s Neuralink. Sounds interesting, no??
• DeepSeek’s next AI model has been delayed because it’s trying to use Huawei chips and not Nvidia’s. There have been a lot of technical problems as a result.
• CoreWeave’s shares collapsed by 20% in reaction to it posting bigger-than-expected Q2 losses. That being said, the company said that demand for its services is running ahead of its ability to build fast enough.

IN MEDIA NEWS…

• Paramount sealed a $7.7bn exclusive US rights deal with UFC for seven years to be the US broadcaster of the UFC slugfest.

IN SOCIAL MEDIA NEWS…

• TikTok is going to shut down its Berlin moderation team and replace them with contract workers and AI. Workers are now, understandably, striking. Is this the sign of things to come, though?

• IN REAL ESTATE DEVELOPMENTS – HSBC has decided to reverse its decision to quit Canary Wharf. It’s just signed a 15-year lease for an office that’s a short walk away from its current global HQ, which it will leave in 2027 to relocate to the City. The latest RICS survey showed that the residential property market is cooling down as the prospect of tax increases and uncertainty over interest rate cuts weighs on prospective buyers. Posh estate agent Savills piped up, adding that inheritance tax raid fears are also hitting house sales. Meanwhile, a merger between student accommodation players Unite Group and Empiric was announced this week. It comes after a tricky few years in a sector that has been particularly badly impacted by the pandemic and the rise in construction costs.
• Tesla is looking to introduce robotaxis in New York. It’s keen to roll out its robotaxi service in America’s most populated city and is recruiting data collectors to drive vehicles around the streets. The drivers will collect audio and video to train Tesla’s Autopilot software.

My favourite video this week was, obviously the one with the only four things you will ever need for a top notch video – an old man, a guitar, a dog and some false teeth 😁 Superb 🤣🤣🤣