Watson’s Weekly 08-02-2019

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. You will need a FULL SUBSCRIPTION to be able to click through all the links which take you to the relevant articles.

• Nissan decided NOT to make the new X-Trail in Sunderland (Monday) due to Brexit uncertainty, slowing car sales generally in Europe and the fact that the X-trail that was GOING to be built in Sunderland would have been the diesel version – and diesel sales are going down the toilet. Another reason is that Japan recently signed a trade deal with the EU that means that X-Trails exported from Japan to Europe would eventually attract no tax, whereas exporting them from the UK to Europe would.
• It was interesting to see that SUV/small truck sales were strong in the US for Ford (Monday) and General Motors (Thursday) while both US giants continue to struggle with their overseas businesses. However, figures suggest that US car dealerships are long of inventory with the prospect of declining sales ahead of them (Tuesday) so even though things are going well in the US economy at the moment, it won’t necessarily be all plain-sailing
• Tesla announced the purchase of Californian battery technology company Maxwell Technologies (Tuesday), which should strengthen its current capabilities, and then the company announced a price cut for its Model 3 (Thursday) to partly mitigate the phasing out of a tax credit that’s currently in place for buying electric vehicles.

• It looks like there are going to be some big changes among terrestrial broadcasters what with a big BBC/Discovery/UKTV/ITV deal in the offing (Friday) where it looks like there will be a carve-up of channels involving the BBC taking control of up to seven UKTV channels, whilst Discovery will get UKTV’s lifestyle channels and all of the BBC’s natural history content and potentially a venture with ITV as a “Best of British” rival streaming service to the likes of Netflix and Amazon. Details are yet to be finalised although it feels like something big is about to happen. Netflix is rumoured to be looking at focusing on more local content in the UK (Tuesday), which will up the ante a bit for the incumbent terrestrial broadcasters as it has a lot of money that it could splurge and then Disney unveiled quarterly results (Wednesday) along with some details on its forthcoming video-streaming plans after last year’s very high profile $71bn deal to acquire major assets of 21st Century Fox
• Some new avenues for potential revenue generation were opened up what with the popularity of 10-minute virtual DJ Marshmello gig that happened in Fortnite over the weekend (Tuesday) where developers switched off guns so players within the game could “watch” the concert at Pleasant Park and Spotify bought into podcasting (Thursday) – which is a nice move considering that people who listen to podcasts tend to use Spotify for longer, which gives more potential for ad revenues (for those on a free subscription) and more appealing proprietary content to keep existing members happy and attract new ones
• In gaming, traditional developers are facing increasing competition from the popularity of online games such as Fortnite (Thursday) which led to downbeat forecasts and steep resulting falls in the share prices of companies such as Electronic Arts, Take-Two Interactive, Activision Blizzard and Ubisoft. Video chat app Houseparty is trying to avoid the ad-revenue model (Wednesday) favoured by companies like Facebook by generating revenues from paid-for content and then there were some doubts expressed over game console sales for Sony (Tuesday) and Nintendo (Monday)
• Traditional advertisers continue to have a tough time as Publicis announced slowing sales (Friday) while the likes of Google (Tuesday), Twitter (Friday) and even Snap (Wednesday) experienced continued benefits from the ongoing migration of ad spend to digital

• Travel operators Tui and Thomas Cook announced contrasting fortunes (Friday) with Thomas Cook’s share price flying after it announced it was selling off its airline and Tui announcing a shock profit warning that sent its shares down by 19%. Superdry failed to get out of its current rut by announcing “subdued trading” (Friday) while Ladbrokes and estate agents announced more job losses to come (Wednesday) because of the clampdown on FOBTs and a slowing economy respectively
• Ikea continues to innovate (Monday) as it experiments with the idea of renting its furniture to you. The Swedish giant is a very interesting place to be at the moment!

• …as the interest rate stayed unchanged (Friday), with the Bank of England downgrading growth forecasts
• There was bad news for the engine of the economy as the services sector almost ground to a halt in January (Wednesday), which is a problem given that the services sector accounts for almost 80% of our GDP

My favourite “alternative” stories this week were about the special dog-dryer in Bizarre device claims to dry your dog in minutes – here’s where you can buy it (The Mirror, Courtney Pochin https://tinyurl.com/ya4b7b5h) as well as the rather impressive woman behind Mum spends £10,000 converting helicopter into home cinema (Metro, Richard Hartley-Parkinson https://tinyurl.com/y79tm86g).