Watson’s Weekly 10-01-2026

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 TRUMP THINGS…

• VENEZUELA – The US invaded Caracas, extracted long-time leader Nicolás Maduro and his wife and flew him to the US to face charges that he led a 25-year cocaine conspiracy and used his political power to protect drug traffickers and money launderers. Trump declared that Washington would now “run” Venezuela for the foreseeable future and seize control of its oil sector and warned Venezuela’s de facto leader Delcy Rodríguez that if she does not follow US directives there would be a “second strike”. Although US Secretary of State Marco Rubio insisted that America does not intend to occupy Venezuela, it is very clear that Washington intends to dictate policy. Trump said that Venezuelan oil worth up to $3bn would be sold at market prices “to ensure it is used to benefit the people of Venezuela and the United States”. The president and oil execs from the likes of Chevron, ConocoPhillips and Exxon are due to meet at the end of this week to discuss what happens next, but it looks like the Americans are going to take control of Venezuela’s oil for the foreseeable future. However, on Thursday, the Republican-controlled Senate voted to advance the war powers legislation to prevent the president from taking further action in Venezuela without approval from Congress.
• IN TERMS OF REACTION – Critics argued that the intervention was poorly communicated, bypassed Congress and the UN and demonstrated Trump’s disregard for international norms. That being said, markets barely flinched. Oil prices remained steady, largely because Venezuela currently produces less than 1% of global supply and because traders expect significant barriers to restoring output after decades of corruption and mismanagement. US oil company share prices then rose because of the prospect of Venezuelan oil coming back online.
• In terms of Venezuelans themselves, expats were over the moon although there is deep unease about Rodríguez given her links to the old regime. However, in the country itself the Venezuelan government called a state of emergency, arresting journalists and using paramilitary forces to snuff out any show of support for Maduro’s removal.
• IN TERMS OF RATIONALE – observers are saying that Trump did this to boost oil refiners on America’s Gulf coast that are specifically set up to process the type of oil that Venezuela produces, that this move means that America will be less reliant on Canada for oil supplies and that his invasion will essential cut China out, meaning that it will have to rely more heavily on Russia and Iran. He wants to show the American people that he’s keeping his promises on cutting fuel costs (he’s aiming for $50 a barrel).
• IMPACT – Oilfield services firms like SLB, Baker Hughes and traders such as Vitol stand to gain as well as oil majors such as Chevron, ConocoPhillips and Exxon.
• However, this could spell trouble for US shale producers who need higher prices to remain profitable but Trump may be willing to sacrifice them for access to Venezuela’s reserves.
• Away from the oil sector, Venezuela’s devastated property market could boom if stability returns, potentially drawing back millions who fled hyperinflation and repression.
• GREENLAND – Denmark has firmly told Trump to stop threatening to seize Greenland, but concern is spreading across Europe. While toppling Maduro is one thing, attacking an ally’s territory is another – and it risks emboldening Russia and China elsewhere.
• The US is considering military options to acquire Greenland and Trump’s due to discuss the future of Greenland with Danish officials next week. In the meantime, Greenland-linked companies including like Grønlandsbanken, Critical Metals and Føroya Banki have seen their share prices rise strongly.
• IMPACT – if the US invades and annexes Greenland, it could signal the end of NATO because the head of NATO, the US, would be in breach of article V, which states that an attack on one is an attack on all.
• Canada is getting increasingly concerned about the vulnerability of its part of the Arctic, particularly the Northwest Passage because it’s getting increasingly important as a shipping lane as the polar icecaps melt.
• OTHER – Back home, Trump faces growing voter frustration. Rural Americans are squeezed by high food prices and healthcare costs, with polling showing widespread belief that the economy is being mishandled.
• Trump has proposed banning large institutional investors like Blackstone from buying single-family homes, blaming them for affordability problems. Critics argue smaller landlords play a bigger role, but the move clearly plays well politically. He then announced, later in the week, the launch of $200bn mortgage bond buying programme as part of an effort to push down mortgage rates and address the affordability crisis that’s denting his popularity.
• He has also ordered a crackdown on defence industry share buybacks, hitting companies such as Lockheed Martin and Northrop Grumman. He’s been getting increasingly frustrated with companies – particularly defence companies – whose projects get delayed and come in over budget and is now threatening to withdraw contracts unless companies step up. This is classic Trump optics. Share buybacks are complex and often benefit pensions and employees, but it’s easier to frame them as corporate greed.
• Trump has also called for a 50% increase in defence spending by 2027 – which maintains would be funded by tariffs – and unveiled a $200bn mortgage bond-buying programme to push down mortgage rates ahead of the midterms.

IN REGIONAL/COUNTRY NEWS

IN EUROPE…

• (ITALY) – Italy’s government and Pirelli are exploring ways to unwind the involvement of China’s Sinochem, which owns a 37% stake in the tyre maker. The urgency comes from the risk that Pirelli could be shut out of the US market because of Sinochem’s shareholding – a serious issue given that the US accounts for roughly 20% of revenues.
• Meanwhile, Italian prime minister Giorgia Meloni is planning another overhaul of Italy’s voting system ahead of the 2027 election, potentially shifting towards proportional representation to give her party more chance of another term. This would be Italy’s fifth electoral reform since the 1990s.

THE UK…

• Back home, ministers considered concessions for pubs after backlash over business-rate hikes, with industry leaders warning many venues will not survive without relief. This resulted in Chancellor Rachel Reeves announcing a partial climbdown of what she said in the Budget and will be the government’s latest U-turn!
• Keir Starmer plans to exclude financial services from closer EU alignment talks – a sensible move given the sector’s size and importance to the UK’s economy!

IN ENERGY…

• Scotland’s Seagreen offshore wind farm wasted 77% of its output last year because there’s not enough grid capacity to transport it to where it’s actually needed. Energy generation is not effective without the infrastructure to support it!

IN CRYPTO NEWS…

• The Trump family’s World Liberty Financial crypto venture has applied for a US banking licence, a step that would deepen its access to the mainstream financial system. It still amazes me that everyone’s OK with the Trump family – and the families of close friends and allies – being able to make money so blatantly whilst also being the ones that make the rules!

INVESTMENT NEWS / TRENDS

• IN IPOs – 2026 is widely expected to be a bumper year for IPOs and there are even hopes this could finally resuscitate the near-dead London Stock Exchange. After an embarrassing start to 2025 (the LSE raised less from new listings in the first nine months than the Angolan exchange… yikes), Q4 provided a late reprieve via Shawbrook, Beauty Tech and Princes Group, plus a few dual listings. Looking ahead, the names being floated for London include Visma, Ebury (which pulled a planned listing last year), Monzo, Starling, ClearScore, Zilch, insurance broker Howden and cyber insurance group CFC. But it’s still fragile: geopolitical and economic uncertainty could easily derail sentiment.
• But let’s face it, the US pipeline looks waaaaaaaay bigger and much more s3xy with SpaceX, OpenAI and Anthropic all preparing landmark flotations (timing still unclear). If I were advising, I’d be pushing to get deals done sooner rather than later. Momentum and valuations look strong, but markets can turn fast – whether via an AI “bubble bursting”, another DeepSpeak moment, or geopolitical flare-ups.
• China is also packing some serious IPO heat, though –  Shanghai-based LLM firm MiniMax surged over 60% on debut in Hong Kong, shortly after rival Zhipu jumped 29%! Both flotations happened at the end of the week!
• IN M&A – momentum is picking up, especially in asset management. US asset managers set a record with $38bn of deal value last year and the number of transactions hit the highest total since records began in 1980. Recent examples include Janus Henderson taken private by Trian, Rithm buying Crestline, and Nomura purchasing Macquarie’s US/European public asset management units.
• Warner Bros Discovery rejected the “inadequate” $108bn takeover bid from Paramount Skydance – and it doesn’t look like the offer will be raised.
• Meanwhile, Merck is in talks to buy Revolution Medicines for up to $32bn and Glencore and Rio Tinto have restarted merger discussions with a February 5 deadline for a formal offer) while Chevron and Quantum Energy are eyeing $22bn of Lukoil international assets. Any resulting deal would be subject to US approval.
• China is reviewing Meta’s proposed $2bn purchase of AI start-up Manus for possible tech export-control issues.
• MONEY RAISING – Elon Musk’s xAI raised $20bn, doubling its valuation, despite mounting controversy over illegal content generated by Grok (including sexualised imagery and non-consensual “undressing”). X insists it removes material and suspends accounts, while training continues on Grok 5.
• Anthropic is reportedly raising $10bn at an implied $350bn valuation – which bodes well for eventual IPO plans.

IN BUSINESS NEWS/TRENDS

• According to the latest BCC data, UK business confidence has weakened, with SMEs citing tax rises and labour-cost pressures. Retail and hospitality still the weakest. The survey was carried out between November 10th and December 8th which spans a time period before and after the Budget. Given that 91% of respondents were SMEs, the conclusions are interesting to note but I’d like to see the next report to see whether the current report was an anomaly.
• Britain’s newest arms factory is owned by BAE and is on a former Sheffield steelworks site. It’s part of a broader defence industry push backed by a £250m regional “Defence Growth Deal”. I would have thought we will see more of these given how governments around the world are boosting defence spending.

IN EMPLOYMENT TRENDS

• UK unemployment is now within one percentage point of the EU’s unemployment rate for the first time ever as our situation worsens and Europe’s improves. UK youth unemployment is particularly bad – it hit 16% in October and is at  its highest level in a decade.
• Economists warn UK unemployment could hit an 11-year high in 2026 without rate cuts.
• An ACS survey found that a quarter of British workers say their job makes them unhappy and a chunk of them are thinking about quitting this month.
• Many workers are avoiding promotions to stay below £100k due to childcare benefit cliffs and punitive effective marginal tax rates (this is even worse with student loans).
• On a brighter note, grid and power jobs are booming as the energy transition accelerates, with Scottish Power hiring at its fastest pace since the 1950s.

CONSUMER TRENDS

• IN THE US – America appears to be falling out of love with pizza. US pizza chains have seen sales growth lag the wider fast-food market for several years, with a wave of bankruptcies and strategic reviews sweeping the sector. The number of pizza restaurants peaked in 2019 and has been declining ever since as competition intensified and consumers’ wallets came under pressure.
• IN THE UK – in terms of spending trends, Supermarkets are taking a bigger slice of “pizza night” as they improve quality while restaurants struggle with soaring costs. The former boss of Domino’s Pizza even recently declared the UK had hit “peak pizza”, while Yum Brands is exploring a sale of Pizza Hut because things aren’t going so well. Household spending on alcohol fell at its sharpest rate since Christmas 2021, according to Worldpanel, with cost-of-living pressures hitting younger families hardest. A separate NielsenIQ survey found that 10% of households either cut back sharply or skipped alcohol entirely over Christmas. This is bad news not just for drinks producers but also for specialist retailers such as Majestic Wine because cash-strapped consumers are more likely to trade down to cheaper supermarket options.
• Rising shop-price inflation has pushed shoppers towards cheaper own-label ranges, helping discounters like Aldi to notch up record Christmas sales.
• UK credit-card borrowing rose at its fastest annual pace in almost two years, adding to concerns that households are leaning on debt to make ends meet.

RETAIL NEWS

• IN SUPERMARKETS – Tesco claimed its best Christmas market share in over a decade (almost 29%), though weaker-than-expected Q3 sales dented its share price.
• Sainsbury’s is pushing its Tu clothing brand upmarket. Things are going to be interesting here because Asda’s trying to differentiate itself by pushing its own clothing brand, George. I think that George was the OG of supermarket clothing brands. Fun facts: “George” is named after the brand’s creator, George Davies, who joined Asda in the 90s after a successful stint at Next in the 80s. He then went to M&S in 2000 where he started the Per Una range.
• The latest figures from Worldpanel showed that Asda was the only major supermarket to see sales fall over the festive period. Its market share hit its lowest ever level over that period.
• Meanwhile, Marks & Spencer saw strong food sales but weaker fashion, although that was probably due to the hangover from the cybersecurity nightmare it had earlier in the year.
• IN APPAREL – Uniqlo benefited from Japan’s tourism boom, with foreign visitors now accounting for 10% of domestic sales.
• In the UK, Primark warned that weak European clothing demand would hit profits at parent Associated British Foods, putting its mooted spin-off under scrutiny (it won’t get a good flotation price if it’s not doing well).
• Next had a great Christmas but was cautious about the outlook in 2026. Let’s face it, though – Next is a serial under-promiser and over-achiever, so I don’t think investors are going to panic all that much.

LEISURE NEWS

• RESTAURANTS – Greggs raised the price of its sausage roll to £1.35 to offset rising costs, while striking a cautious tone on consumer confidence. This is probably prudent given that household finances are still feeling the pinch.

TECH NEWS

• REGULATION – Efforts to rein in Big Tech in the US are failing to gain traction, with American courts repeatedly baulking at the kind of aggressive remedies regulators believe are needed to curb the power of companies like Google, Meta, Apple and X. By contrast, the EU is gearing up for a much tougher fight in 2026 as it prepares to enforce its digital rulebook, including the Digital Markets Act, despite warnings from Donald Trump that there could be retaliation. Will the EU courts end up being the tech  fun police??
• IN AI – At CES, Jensen Huang unveiled Alpamayo, a new Nvidia AI model designed to “teach cars how to drive”.
• Meanwhile, Character.ai and Google are settling lawsuits linked to teen self-harm allegedly connected to chatbot interactions – a sobering reminder of AI’s real-world risks.
• IN CHIPS – Samsung forecast record profits on the back of AI-driven chip demand, signalling a dramatic turnaround and growing importance as a supplier to Nvidia. US rival Micron Technology is also benefiting from the same drivers.
• IN HARDWARE – TDK is pushing into AI-powered smart glasses, leveraging its dominance in batteries and sensors but I don’t think it’s going to be worrying Meta-Ray Ban any time soon…
• LG Electronics is suffering with higher tariffs and restructuring costs and expects to unveil a quarterly operating loss for the first time in nine years. Poor demand for TVs and other electronics have been to blame…

IN SOCIAL MEDIA NEWS

• Somewhat ironically, the founders of Twitter and Pinterest have launched an “anti–social media” app called Tangle, where users share personal objectives or “intentions” with their friends and support each other whilst also “reflecting” on how they are achieved. Sounds like an echo chamber to me 🤣.
• Telegram had $500m of Russian-linked bonds frozen under Western sanctions, underlining its lingering exposure to Russia and renewed scrutiny of founder Pavel Durov. Whether this is existential or just painful remains to be seen.

AUTOMOTIVE NEWS

In the US, data from Cox Automotive suggests that new car sales will weaken this year for the first time in four years as higher prices, interest rates and insurance costs continue to squeeze buyers. Meanwhile, Chinese manufacturers are pushing hard overseas. With domestic demand cooling, China’s car exports are forecast to jump by as much as 25% this year as makers chase more profitable foreign markets. In the UK, total car sales topped 2m units in 2025 for the first time since 2019! Chinese brands have doubled their share of new registrations since 2024 – a remarkable shift in a short space of time.

• IN EVs – Research from Benchmark Mineral Intelligence suggested that EV sales are heading for their slowest annual growth since the pandemic as the shift towards electrification is being hit by weaker demand in China, Europe and the US. EV sales are still growing – just more slowly.
• BYD has overtaken Tesla as the world’s biggest EV seller. However, Tesla still has an edge in large batteries and energy storage, particularly in the US, where customers value bundled systems, grid integration and long-term service – areas where Chinese firms struggle to compete.
• General Motors took a $6bn hit linked to weak EV demand and is pivoting back towards more profitable big trucks and SUVs.
• DRIVERLESS – London is shaping up as a battleground for robotaxis in 2026, with Waymo set to face Baidu via Uber. The launch has been accelerated because the UK government announced that it would allow commercial trials of driverless cars this spring. It’s far from proven that driverless cars will actually improve safety or congestion, particularly on Europe’s narrow and congested roads.

• REAL ESTATE – UK construction is having a rough time. The latest S&P PMI survey shows output has fallen for the 12th consecutive month, marking the sector’s worst run since the 2007-09 financial crisis. While there are small pockets of optimism, this is clearly at odds with the government’s big ambitions around housebuilding and infrastructure. Meanwhile, the shortage of high-quality office space in London is forcing large companies to stay put. Firms including Accenture, Vodafone Group, Investec, EY, Salesforce, LSEG and Nomura all abandoned potential office moves last year.
• IN FINANCIALS – Lloyds Banking Group is pushing ahead with using blockchain and “deposit tokenisation” to speed up the home-buying and remortgaging processes. Elsewhere, JPMorgan Chase is taking over Apple’s $20bn credit card portfolio from Goldman Sachs, marking the end of Goldman’s ill-fated Marcus retail banking push. Meanwhile, fintech Zilch bought Lithuania’s Fjord Bank for $38m to secure a European banking licence.
• IN PRO SERVICES – Accenture is buying British AI firm Faculty in a $1bn deal, while law firm Pogust Goodhead faces existential funding doubts after £400m of losses in two years.
• IN PHARMACEUTICALS – Novo Nordisk has launched a pill version of Wegovy in the US, triggering a price war and potentially broadening the appeal of weight-loss drugs dramatically.

My favourite video of the week was the one that had the fascinating facts about US vs British eggs! I know – I probably need to get out more…