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.
IN BIG PICTURE NEWS...
This was another week of sanctions and consequences with some innovation thrown in.
- Overall, the head of the Bank of International Settlements said that we’re all going to have to get used to higher inflation for longer (Wednesday). Wages, inflation and house prices are all rising currently, but this can’t last forever. Aggressive interest rate rises from central banks will still take a few months to kick in properly and the war is still ongoing, so things are very difficult to predict currently.
- The US is heading for recession (Wednesday), according to the US economist at Deutsche Bank – and he also reckons Biden is not going to be in a strong position at the next presidential election. Biden did, however, announce a new agreement with the UK and Australia on the co-development of hypersonic weapons (Wednesday), which will no doubt irk the Chinese who seem to be itching to get their hands on Taiwan.
With regard to sanctions…
- The EU was talking about implementing more sanctions on Russia (Monday), all of which intensified as more reports of atrocities came to light (Tuesday) and the US then ratcheted the pressure up even further (Thursday). France’s President Macron called for a ban on Russian oil and coal imports (Tuesday) while Lithuania became the first EU country to end imports of Russian gas (Monday) and some businesses are trying to cut their energy costs by doing what they can to reduce their usage (Tuesday). Germany moved to take over Gazprom’s gas storage facility (Tuesday) and, talking of gas, the UK is looking at ways to help Europeans get their LNG supplies (Friday).
It was a big week for the UK in terms of energy…
- BoJo announced a new energy strategy plan that involves a quintupling of the UK’s offshore wind power (Thursday) among other things. It had a mixed reception though (Friday) but there was some ground-breaking news on nuclear fusion (Tuesday) from the Oxford-based First Light Fusion taking us a step closer to the Holy Grail of power generation.
Global trade is navigating choppy waters at the moment…
- Shanghai’s lockdown-induced backlog is hitting supply chains and UK businesses (Friday) but has global implications (Thursday), with the trucking industry having particular difficulties because there are a lot of no-go areas in China.
- Agriculture is taking a serious hit from China’s super-strict Covid policies (Wednesday) to the extent that there is debate about introducing GMOs (Wednesday) while UK farmers are facing the challenges of the “four F’s” (Monday) – feed, fertiliser, fuel and financing, leading to fears that the UK food industry could shrink permanently (Wednesday), especially if the government doesn’t do anything to address the Brexit-induced labour shortage.
Meanwhile, Turkey’s inflation hit a 20-year high of 61% (Tuesday) thanks to rising food and energy costs.
THERE WAS A LOT OF CAR-RELATED NEWS THIS WEEK...
- In ELECTRIC VEHICLE NEWS, Polestar sold 65,000 cars to Hertz (Tuesday), GM and Honda teamed up to make “affordable” EVs (Wednesday) and Tesla’s deliveries rose for the first quarter but fell short of analyst expectations (Monday). Britons are buying a lot of EVs (Wednesday) and our EV take-up plans look pretty punchy (Friday) while Vietnamese carmaker VinFast announced plans to do a US IPO (Friday) to raise funds to help it switch to 100% EV manufacturing. Battery raw material prices continue to rise (Monday) and Chinese manufacturer Nio is trying to tout the advantages of swappable batteries (Wednesday).
- Meanwhile, in petrol vehicles, dealership Lookers reckons strength in the used market will continue (Thursday) and VW said that it wants to axe a huge number of models (Thursday) in order to concentrate its efforts on more premium vehicles where it makes more money.
THERE WERE SOME INTERESTING CONSUMER AND EMPLOYMENT TRENDS..
- In the US, consumers are starting to cut back on essentials now (Tuesday) but the employment market remains tight as Walmart is offering big bucks for its truck drivers (Friday) and Amazon workers are getting unionised (Monday) as they get increasingly emboldened to stick up for themselves (Thursday). Howard Schultz returned to Starbucks this week (Tuesday) and immediately voiced his intentions to focus more on staff and customers rather than shareholders (presumably because he is trying to stop his baristas from getting unionised!).
- In the UK, household finances continue to get squeezed (Monday) by rising prices of staples like cooking oil (Tuesday) and a new survey from PwC showed that concern about rising prices has dented consumer confidence (Monday). UK house prices are reaching record highs (Friday), which is no doubt contributing to more consumers getting 35-year mortgages (Thursday). The recovery of leisure travel in the UK is being scuppered by a lack of available staff (Tuesday), the operation of the Channel Tunnel was disrupted (Tuesday) and Ryanair got more downbeat on their full-year expectations (Tuesday). In UK employment, the Communication Workers’ Union rejected BT’s pay offer (Friday) because it was below inflation and over 3,000 workers at 60 companies across the UK are going to start experimenting with a four-day week (Monday).
THE RETAIL SECTOR SAW SOME ACTION...
- In APPAREL RETAIL, Shein got a massive valuation at its latest funding round (Wednesday) as it continues to go from strength to strength, Ted Baker put itself up for sale (Tuesday) and Primark upgraded its website (Friday), bringing it closer to the point where you might be able to actually (but not quite!) buy stuff online from there! M&S announced the launch of resale (Tuesday) via a partnership with resale platform Dotte.
- In GROCERY RETAIL, Morrisons warned that its profits would take a major hit this year (Tuesday) and the Co-op is also looking pretty iffy (Friday).
AND IN OTHER NEWS...
- In TECH, Elon Musk became Twitter’s biggest shareholder (Tuesday) and he was offered a seat on the board (Wednesday). Meanwhile, Amazon signed satellite deals (Wednesday) that will put it head-to-head with SpaceX and the UK government-owned OneWeb.
- In INDIVIDUAL COMPANY NEWS, Uber is now broadening its offering to cover trains and coaches (Wednesday) and the pre-paid funeral industry looks like it’s going to get a serious shake-out (Friday) as the failure of Safe Hands has prompted scrutiny of the finances of the whole sector.
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document!