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...
In MACRO NEWS…
- US made a Nord Stream threat (Wednesday) in an attempt to stop Russia from invading Ukraine.
- BoJo announced Plan B (Thursday) in an effort to limit the spread of the Omicron variant. The CBI downgraded UK GDP growth forecasts for this year and next (Monday) although the latest ONS data suggests that the new curbs will only have a limited impact on the economy overall (Friday) – but try telling that to the leisure industry! Pubs and restaurants have already been hit by cancellations etc., jobsite Adzuna has seen a meaningful drop-off of job vacancies in the sector (Wednesday) and the whole industry is calling for more help from the government (Thursday), but it looks like they’re not going to get it (Friday). Tui, Europe’s biggest travel and tourism business, has decided to cut winter capacity as a result (Thursday), but is hanging onto hopes for a better summer.
In CRYPTO NEWS…
CONSUMERS SPEND WHILE RETAILERS AND EMPLOYEE RIGHTS CONTINUE TO EVOLVE...
- Black Friday prompted shoppers to go out and buy more (Tuesday), according to a report published by KPMG and the BRC and it showed that clothing, toys and jewellery were the most popular items. Bars and restaurants also saw a lot of action. Some customers are doing very well, though as Watches of Switzerland said it had run out of Rolexes (Friday) and had to restock between August and the end of October! Meanwhile, most of the rest of us are facing rising energy bills next year (Thursday) and we can’t even console ourselves with a cheap-and-cheerful cup of coffee as coffee bean prices have skyrocketed (Thursday) for various reasons!
- It was an eventful week for some retailers as well! Tesco has decided to use the vast trove of data it has collected over the years via its Clubcard to diversify into advertising (Thursday). Meanwhile, Frasers says that it’ll swing into chunky profit for the full year (Friday) as long as there aren’t many major lockdowns.
- On the high street, it was interesting to see that posh bakery Gail’s is keen to take on Pret (Monday) and that Franco Manca owner Fulham Shore announced it had exceeded targets (Tuesday).
- It was an important week for employees this week as a group of Starbucks employees voted to get unionised (Friday), something that could spread, IMO, not only within Starbucks itself but also beyond. In the UK, Tesco workers looked like they might strike (Tuesday) but in the end, Tesco caved and offered them a pay rise and some extras (Thursday) so as not to disrupt Christmas. Still, their pay rise was nowhere near as good as the one Harrods restaurant employees managed to extract (Wednesday) from their employers, but then if your company is ultimately owned by a Qatari sovereign wealth fund there’s not really much the employers can do to say they can’t afford it given the recent state of the oil price! There was another very important development that happened this week – the European Commission decided that gig company workers will, by default, be treated as employees (Friday) rather than contractors and legislation to this effect will apply to all such companies who operate in the European Union.
THE REAL ESTATE SECTOR CONTINUES TO BE A SOURCE OF DRAMA...
- Evergrande continued to suffer this week as its stock cratered (Tuesday) while the government moved in to take increasing control (Wednesday), leading its share price to record lows (Thursday) before ratings agency Fitch officially declared it as being in default (Friday). Concerns increased about the Chinese real estate sector generally as the shares of Kaisa Group Holdings were suspended on the Hong Kong stock exchange (Thursday).
- In EUROPE, there are rising concerns about the ongoing inflation of Germany’s property bubble (Tuesday) as prices have doubled relative to incomes in Frankfurt over the last ten years, for instance. Meanwhile, the ECB continues to sit on its hands regarding raising interest rates…and in the UK, property prices keep rising (Thursday), mainly because supply of new properties just isn’t satisfying demand and so companies like posh paint company Farrow & Ball are prospering (Wednesday) as new owners insist on “putting their stamp on the property”, existing owners spruce up their abodes to maximise selling prices or decide that prices are rising too quickly and want to just say put and upgrade where they already are.
THERE WAS SOME INTERESTING STUFF ON EVs THIS WEEK...
- EV sales are booming (Tuesday) and are now making up a higher proportion of new car sales (Monday), so Halfords has warned that the government needs to help train specialist mechanics (Monday) to cope with their increased uptake otherwise there will be problems! Meanwhile, Gridserve has committed to rolling out a big upgrade in the motorway charging network (Thursday).
...AND IN OTHER INTERESTING DEVELOPMENTS THIS WEEK...
- In FINANCIALS, Lloyds Bank announced major growth plans (Monday) after years of “meh” under the old boss. He’s going to move into more racy stuff like property, wealth and commercial and investment banking, so it should be a wild ride 🤠 yee-hah.
- In PROFESSIONAL SERVICES, the Big Four accountancy firms posted their best financial performance since the collapse of Enron in 2002 (Thursday), mainly thanks to the advisory business.
- In M&A NEWS this week, we saw that Nestlé offloaded a massive stake in L’Oréal (Thursday) to L’Oréal, although it’s still got a fair chunk left over while CMA CGM did a $3bn logistics deal (Thursday) as it bought a load of warehouses in the US and Europe along with cloud-based digital platform Shipwire from US tech group Ingram Micro.
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly
BANTER
My favourite “alternative” stories this week were about the culinary abomination in People left divided over dad’s bizarre Yorkshire pudding pies filled with KFC (The Mirror, Emma Rosemurgey) and the brilliantly talented flipchart lady. Do they inspire you??