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.
TRUMP HAD A LOT TO SAY THIS WEEK AND GERMANY HAD A WOBBLE...
- President Trump had a lot to say for himself this week! He put tariffs on aluminium and steel from Brazil and Argentina (Tuesday) and threatened France with 100% tariffs (Tuesday) if they went through with imposing a 3% digital services tax to extract tax from tech giants. Boris Johnson talked about the UK imposing a similar tax (Wednesday) and although the OECD is currently trying to get 135 countries to agree to a more wide-ranging digital tax rate, the EU said that if the OECD couldn’t get agreement, they would seek out a European solution (Friday), so it seems that Europe is currently underwriting a potential digital services tax
- Trump also poured cold water on the idea that a US-China trade deal was imminent (Wednesday) and even speculated that one may not even materialise until after next year’s presidential election
- Meanwhile in Europe, Germany had a shaky start to the week as newly-elected leaders of SPD coalition partners sounded like they were threatening to leave the coalition (Monday), but it seemed that they backpedaled somewhat by the end of the week (Friday) so the government stays intact – for now
TECH SAW SOME INTERESTING DEVELOPMENTS...
- Alphabet/Google co-founders Larry Page and Sergey Brin stepped down from Alphabet (Wednesday), leaving Google Sundar Pichai in charge of the whole lot. Pichai’s selection would imply that the Alphabet “moonshots” business will be toned down (Friday) as the company concentrates more on making money and growing businesses in cloud computing and healthcare
- Elsewhere in software-related business, Slack seems to be growing its customer base (Thursday) but it continues to face massive competition from much larger rival Microsoft with its product “Teams” which is free for every Microsoft 365 subscriber. Epic Games appears to be preparing for life after Fortnite (Wednesday) as it reveals plans to make its games toolkit Unreal Engine available to third party developers. The idea is that the toolkit is free to use, but Epic Games will take a 5% royalty fee for any games that are built using it
- On the hardware side of things, Huawei has released a new phone, called the Mate 30, that has no US-sourced parts (Monday). This could be bad for American companies like Qualcomm and Intel as Huawei’s ban has led to an acceleration in plans to make its products independent of the US and thus threat-proof
THERE WERE SOME RATHER EMBARRASSING ACCOUNTING SCANDALS AS WELL...
- Ted Baker’s new CFO found a £25m hole in the accounts (Tuesday) as it turns out that the company had been overstating the value of its inventory. New accountants and lawyers have been hired and Alix Partners has now been brought in to do a thorough review of its operations. If troubled founder Ray Kelvin harbours any ambitions to buy his company back and take it private, it just got a whole lot cheaper…
- It turns out that ad agency M&C Saatchi had an accounting problem of its own (Thursday) as forensic accountants brought in a few months back concluded that the company had been overstating its performance for up to five years! Shocker! The company’s share price almost halved in response. I would have thought that irate investors could try to sue them. Other than that, the cratering of the share price could attract potential bidders – and I wonder whether ex-WPP boss Sir Martin Sorrell could snag a bargain here
...MEANWHILE, ON THE UK HIGH STREET...
- The latest figures from the British Retail Consortium suggested an uptick in sales going into Black Friday (Tuesday), giving some hope to our embattled retailers in the run-up to Christmas but the ongoing slump in retail isn’t just giving shops and their landlords a headache. M&G took the decision to close trading in their property fund (Thursday) as they couldn’t sell assets fast enough to keep up with rising demands from investors to withdraw their money. M&G’s property fund has particularly high exposure to retail properties. Other property funds are starting to sell assets now so they won’t have to resort to what M&G are doing
My favourite “alternative” story was Woman’s ‘trippy’ optical illusion video leaves people completely bemused (The Mirror, Courtney Pochin https://tinyurl.com/trtcttr). I still can’t work this out!!!
I hope you have an enjoyable weekend!