Watson’s Weekly 09-07-2022

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.


I think we’d all agree that was quite an eventful week!

  • IN THE UK – Boris Johnson quit as PM (Friday) after much pressure and a mass-exodus of ministers. Markets seemed to take it quite well and sterling actually strengthened versus the dollar. As things stand currently, the expectation is that a new PM will be installed by early September straight after the House of Commons’ summer recess. It’s hoped that the first bit (cutting the candidate list down to two from a longlist) can get done quickly, something that requires a bit of a rule change. The second part will be both candidates campaigning for the top job. Expect loads of noise from the media as to runners and riders etc. The Bank of England warned that the UK’s economic outlook had “deteriorated materially” (Wednesday) as inflation continues to pile the pressure on household and company finances.
  • TALKING ABOUT INFLATION/INTEREST RATES – South Korea’s central bank is looking at making its first ever 0.5% interest rate increase (Wednesday) to take the edge off inflation, which rose at its quickest rate since 1998, but it was even worse in Turkey as its inflation rate hit 78.6% (Tuesday), its highest for 24 years. The situation has been made worse by Erdogan cutting interest rates rather than raising them and the Turkish lira collapsing. Turkish people are facing really tough times (Friday). Meanwhile, Hungary put its interest rates up by 2% (Friday) to 9.75% to prop up its currency and address inflation while Poland raised its interest rates by 0.5% (Friday) to an 18-year high of 6.5%.
  • IN EUROPEGermany announced a massive €1bn trade deficit (Tuesday) that’s likely to get worse and Norway managed to avert strikes in the oil and gas industry (Wednesday), which is good because oil and gas prices would have been even worse had they gone ahead!

Commodities and energy news continued to be prominent this week…

  • IN OILShell continues to benefit from record fuel prices (Friday) as its indicative gross profit margin for fuel refining has tripled between Q1 and Q2
  • IN COALdemand continues to rise in Europe, the US and China (Tuesday), so miners like Glencore are raking it in!
  • IN GASUK gas prices reached their highest level for three months (Tuesday) due to ongoing concerns about Russian supply and Japan continues to import gas from Russia (Monday), even though it doesn’t want to, because it’s tied in to long-term contracts. In the meantime, Qatar is benefiting from the war (Thursday) as QatarEnergy, the state-owned gas producer, is significantly increasing its gas export capacity as more countries seek alternative sources to their existing suppliers.
  • IN COMMODITIESthere was news of a possible $60bn merger between Norilsk and Rusal (Wednesday) to create a Russian national metals champion. If it went ahead, it would be bigger than Glencore.

Crypto’s rocky ride continued this week…

  • Celsius Network continued its freeze on asset withdrawals (Monday) and the broker/”bank” that precipitated the collapse of Three Arrows Capital last week, Voyager Digital, filed for bankruptcy (Thursday). Against this rather shaky backdrop, Facebook owner Meta reiterated that it is sticking with its plans to broaden access to NFTs (Thursday).


  • EU lawmakers geared up to approve two important new pieces of legislation (Wednesday) – the Digital Markets Act and the Digital Services Act that could, if implemented well, really affect Big Tech companies.
  • It seems that we’re moving closer to having US-style class-actions (Monday) as cash-rich litigation funders are keen to make money in what could be a major growth market. Many of us are already part of one (without knowing it!) with Mastercard regarding “interchange fees” charged between May 1992 and June 2008. If this progresses, it could open the door to further actions.
  • Facebook was threatened with an EU ban (Friday) by Ireland’s Data Protection Commission, which has provisionally ruled that it can no longer send user data to the US. It now has four weeks to protest the recommendations. It certainly seems that momentum is with the lawmakers at the moment and I guess that they are being helped by the fact that the tech sector as a whole has been suffering a general sell-off.
  • Shein continues to face dozens of lawsuits (Monday) for design theft as it seems to have a broad interpretation of copyrights! It, along with its Hong Kong-based parent Zoetop, has been a defendant in at least 50 US federal lawsuits over the last three years. It looks to me like we’re overdue a crackdown! I remember a few years ago that the Chinese government was trying to crackdown on counterfeit goods (Alibaba was notorious for this, for instance), but it seems that this has gone on the backburner…


  • IN US EMPLOYMENT NEWS – Starbucks hit back at workers for unionisation (Tuesday) by shutting down the outlet in Ithaca that supported it. CEO Howard Schultz is not taking this pressure lying down and is clearly doing his best to nip unionisation in the bud. It also seems that there is a trend where workers are getting midyear raises (Wednesday) in order to retain employees.
  • IN UK EMPLOYMENT NEWSthe labour market remains super-tight (Friday), according to the latest survey by the Recruitment and Employment Confederation and KPMG, something that was echoed in recruiter Robert Walters’ results (Thursday).
  • IN CONSUMER NEWS – Generation Z is the most confident demographic regarding personal finances (Tuesday), but consumers generally are getting increasingly concerned about debt (Thursday) as demand for debt services from Lloyds Bank customers shot up by 30% in the first half of this year. More firms are passing costs onto customers (Monday) as suppliers pass on higher costs (Tuesday) and dairy farmers warn of price rises (Friday) because they just can’t get the staff. Tesco’s continues to push back on supplier demands for price rises (Wednesday), but I think that this is largely symbolic because they need each other and price rises are bound to result eventually. Consumers are facing rising car insurance premiums (Monday) because the number of claims and costs per claim are rising because there are more people on the road now than under lockdown and repairs costing more due to supply chain issues, house prices continue to defy gravity (Friday), according to the latest Halifax figures and consumers are spending on travel and pubs (Wednesday) and luxury watches (Friday), with Watches of Switzerland remaining confident for the rest of the year. On the downside, consumers are avoiding the high street (Thursday), according to the latest Springboard figures and flight prices are shooting up (Tuesday) as couped-up consumers scramble to go on their holidays. Without meaning to be a doomsayer, it is worth remembering that a lot of people who took out super-low fixed rate mortgages will be coming off them over the coming months and years (Monday) and have a nasty shock.
  • IN RETAIL NEWS – there were some contrasting stories on livestreaming retail. TikTok has abandoned a livestream rollout in the US and Europe (Wednesday) to get the offer right in the UK before it has another go, but Amazon has decided to put more into this potentially new revenue-generative area (Friday). Talking about Amazon, it struck a deal with Grubhub in the US (Thursday) which will give Prime Customers there access to Grubhub’s food delivery app but it also faces an investigation by the UK’s CMA (Thursday)  over its Marketplace practices. Meanwhile, in electricals retailers, AO World’s shares hit a two-year low (Tuesday) as investors got concerned about the company’s finances as the company decided to concentrate on the domestic market. It then decided to do an equity issue to raise capital (Thursday). Rival Currys voiced concerns about the future (Friday) given that it sells big-ticket discretionary items in an inflationary environment, but it did actually put in a decent performance.


  • EV sales rose in the UK (Monday), but EVs still only represent around 1.2% of the cars on British roads currently. Demand for EVs is rising, presumably because of the rising cost of petrol! “Normal” car sales in the UK continued to be weak, though (Wednesday), according to the latest SMMT figures.
  • It was a mixed week for Tesla. 20% of EVs sold in the UK are made by Tesla (Monday), but it lost its top spot in China to BYD (Wednesday). Tesla deliveries fell in China (Monday) because of Covid shutdowns and supply shortages and the company also took at Bitcoin hit (Monday) as there was a big valuation write-down.
  • IN OTHER NEWSChinese manufacturer Geely diversified into making phones (Tuesday), in an interesting reversal of what Foxconn is going (going from iPhone assembler to car maker). It was also interesting to see Evergrande unveiling its first car (Friday), which is an electric SUV coming in at about half the price of a Tesla Model Y. It sounds like a move in the right direction, but the parent company is the embattled, indebted real estate developer – so I do wonder whether people are really going to trust the brand all that much.


  • Canadian private equity firm Brookfield is downbeat about UK commercial real estate (Wednesday) and says that it thinks deals will dry up as the world’s attention is more focused on interest rates and recessions. Banks are being more selective about who they lend to, meaning that there will be fewer buyers and, therefore, lower prices.
  • UBS said it was subletting two floors of its London HQ (Wednesday) because it is has found that, after all this WFH malarkey that it has too much space on its hands. When other big companies do this, they may find the same thing – which is bad news for office space players like WeWork and IWG, because there will be more competition in the market.
  • DHL announced a UK expansion (Wednesday) showing that there’s still scope for growth in warehousing and logistics.
  • US developer Greystar has raised more money (Thursday) to put into residential rental investment in Europe as it sees it as an inflation hedge because property in this category has shorter leases (they are reviewed annually versus offices and retail which are on multiyear deals).


  • In TECH – this didn’t make it into Watson’s Daily because it happened later on Friday after publication, but Elon Musk announced he was walking away from his $44bn takeover bid for Twitter. This came shortly after Twitter announced it was cutting its recruitment team by 30% (Friday), in a sign that recruitment is going to take a back seat for now. In tech hardware, Samsung Electronics disappointed (Friday) as inflation took the edge of demand for gadgets and the semiconductors that they contain, something echoed by rivals including Intel, Micron Technology and AMD. PC sales and cryto demand (from miners) is also slowing chip demand (Tuesday), although it’s still strong for cars and data centres.
  • GSK got approval for a spin-off of its consumer brands (Thursday) that will have a separate stock market listing at a hoped-for valuation of up to £45bn.
  • British banks made more money than their European counterparts (Monday), despite the EU trying to force staff to go to Europe after Brexit. I suspect this won’t be forgotten about and that efforts will be renewed to put more pressure on.


  • 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! 


My favourite “alternative” stories of the week were New £1 pill ‘that prevents hangovers’ launches in UK after 30 years of research (The Mirror, Kieren Williams and Neil Shaw) for obvious reasons and Best and worst butter brands compared as Lurpak soars to £7.25 in supermarkets (The Mirror, Sanjeeta Bains) because it’s very useful at the moment!