Watson’s Weekly 12-07-2025

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 WAR NEWS…

• Netanyahu and Trump discussed a new Gaza deal at the White House and Trump then decided to sent Ukraine more arms less than a week after he stopped deliveries.

IN DEFENCE…

• German defence start-up Helsing is going to open a factory in Plymouth to produce mini-submarine drones. The company is going to invest £350m in the UK in total including the Plymouth facility, an HQ and software development centre in London.
• The Pentagon announced that it would be buying a 15% stake in MP Materials, an American rare earths producer in an unusual move. The US government only makes direct investments very rarely. It’s all about trying to wean themselves off reliance on China.

IN TRADE & TARIFFS…

• IN TRADE – China’s been managing to get around export restrictions by routing them via south-east Asian countries  but Trump is tightening up this loophole by doing deals with individual Asian countries.
• IN TARIFFS – Trump renewed a threat to hit trading partners with big tariffs but extended the deadline for compliance from July 9th to August 1st. BRICs countries got annoyed and resolved to pivot away from the US dollar, then Trump singled Brazil out for 50% tariff treatment which angered President Lula and Brazilians generally. Trump threatened massive taxes on Canada but investors took his latest threats in their stride because of his tendency to make big threats and then negotiate something slightly more manageable. The FTSE100 even hit a record high along with the DAX – so markets seem to be getting used to Trump’s dramatic approach.

IN TRUMP THINGS…

• The administration flatly rejected suggestions that recent staff cuts blunted the response to the Texas floods. Somewhat ironically, White House press secretary Karoline Leavitt said that “Many Democrat elected officials are trying to turn this into a political game and it is not”. The fact that Trump and chums did precisely this in the LA fires has probably slipped her mind…
• Meanwhile, the Supreme Court overturned a lower court decision to allow Trump’s plans for mass government lay-offs to proceed. Mass redundancies as well as cancellation of federal programmes and services are bound to follow…
• In a sort of reversal of the above situation, a district judge in New Hampshire has issued a new order that will block Trump’s efforts to end birthright citizenship. Last month, the Supreme Court blocked lower courts from doing this in a separate case – so this is quite interesting!
• Trump’s newly-passed BBB is going to be a nightmare for private health insurers (but it will obviously be more of a nightmare for people who now won’t be able to afford health insurance). A lot of them have invested big sums of money in managing government-subsidised health insurance programmes and now costs are rising, so they are going to be left out to dry!
• Trump’s administration increased the pressure on Harvard by notifying the government’s accreditation agency that the university has breached a number of federal anti-discrimination laws. This could potentially lead to the revocation of its status as a university which could have huge financial repercussions. Analysis by the FT estimates that US universities have already lost out on an estimated $1bn in collective tuition fees. Surely this is only going to continue as no-one is going to want to take the risk while Trump is in office…

IN MUSK THINGS…

• Musk launched a new political party called “the America Party”, but third parties have generally not been taken seriously in the past. I’d say the difference there is that they weren’t financed by the richest man in the world who knows the president quite well…

IN INDIVIDUAL COUNTRY NEWS…

• IN THE US – the Fed said that Trump’s tariffs are making interest rate cuts unlikely, according to the minutes of the latest meeting. This will annoy Trump, who is basically blaming the Fed chief, Jerome Powell, for being the one delaying cuts.
• IN THE UK – Macron had a state visit to Britain in the first such visit by an EU leader since Brexit! The two countries made a commitment to join forces on nuclear deterrents for the first time. The government is considering wealth taxes to plug the fiscal hole left by last week’s welfare reform climbdown at time where millionaires and non-doms have left the UK, something that has adversely affected property sales in areas like Knightsbridge. Meanwhile, it looks like Reeves is going to make another climbdown, this time on reform to UK cash ISAs because of resistance. What will this government climb down on next?? Elsewhere, ministers launched a £500m scheme to help struggling families, continuing efforts made by previous governments starting with Blair’s. The chair of the UK Statistics Authority is falling on his sword to take responsibility for all the problems with the ONS but that’s just going to leave a troubled organisation in a leadership vacuum.

IN COMMODITIES…

• COPPER – US copper prices hit a record high as Trump threatened a 50% tariff on it to discourage big imports of the stuff, but this won’t be enough to solve the copper problem – more investment is needed!
• CHOCOLATE – the world’s biggest cocoa processor, Barry Callebaut, decided to cut its forecasts for the third time this year, news that sent its shares tumbling by 13.4%. Cocoa prices have shot up thanks to adverse weather conditions and crop disease and the the global chocolate market had seen its worst decline in a decade during Q3.
• COFFEE – prices climbed following Trump’s threats of 50% tariffs on Brazil. The US is the main buyer of Brazilian coffee. Prices of arabica and robusta coffee have already been high over the last few years thanks to poor harvests in the world’s biggest coffee growing countries – Brazil and Vietnam.

IN ENERGY…

• NUCLEAR – Japan continues to re-engage with nuclear power 14 years after Fukushima. At the moment 14 of the 54 reactors that were shut down following the disaster have been reopened. Interestingly, it’s not so keen on SMRs because it wants to see how those work elsewhere first. There was good news for Sizewell C’s financing as Canadian investor Brookfield Asset Management said it would take a 20% stake while the government’s stake will be diluted to 47.5%, Centrica will take 15% and EDF’s slice will fall to 12.5%.
• RENEWABLES – Data from Global Energy Monitor shows that almost 75% of all the solar and wind power projects being built globally are in China! And it seems that the US is going in the opposite direction!

IN BUSINESS TRENDS…

• Chinese companies are buying up mines around the world at the fastest rate since 2013 in a rush to secure resources, presumably because of the ongoing geopolitical situation.
• Japanese shipbuilder Imabari Shipbuilding is taking a 60% stake in Japan Marine to form the world’s fourth biggest shipbuilder that would take on the likes of China State Shipbuilding Corporation and South Korea’s HD Hyundai Heavy Industries. It could also benefit from the injection of cash from a proposed ¥1tn public-private fund.
• “Upward-only rent reviews” for office tenants could become a thing of the past thanks to a new bill being debated by parliament at the moment. If this gets passed it would be a game-changer because the “upward-only” state of affairs has been the default for decades. The changes won’t affect existing contracts.
• Research by the British Beer and Pub Association (BBPA) made the prediction that 378 pubs in England, Wales and Scotland will close this year unless the government cuts business rates. That’s more than the 350 that closed last year.

IN INVESTMENT NEWS/TRENDS…

• L&G announced a partnership with the American alternative assets giant, Blackstone. The idea will be that Blackstone will source private credit deals from L&G’s annuities business and L&G will invest up to 10% of new flows from its annuities business.
• IN IPOs – Fundraising from flotations on the London Stock Exchange has hit its lowest level since at least 1995 with just five listings in H1 raising a paltry £160m.  As if to rub it in, Shein filed for a Hong Kong listing, putting pressure on the LSE to make up its mind but we also heard that the number of primary listings in India hit their highest year-to-date level of $6.7bn  thanks to interest rate cuts and continued strong domestic demand for equities.
• IN M&A – AI data centre group CoreWeave announced a $9bn all-paper deal to buy rival Core Scientific, Ferrero is in talks to buy breakfast cereal company WK Kellogg and UK-based biotech company Verona was bought by US multinational pharma company Merck for $10bn.

IN EMPLOYMENT TRENDS…

• PageGroup had disappointing gross profits in Q2 but it said that it is seeing signs of recovery in the US jobs market as American employers are getting more confident.
• The AI employment market is still red-hot as evidenced by Meta luring an ex-Apple AI expert with a $200m pay offer!
• There’s debate about on-the-job learning and how AI has affected it. It seems that a more structured approach with less “character building” tasks is the way forward…

IN CONSUMER TRENDS…

• Although beer is “having a bad year”, one rare bright spot is Michelob Ultra, the low-calorie, low-carb beer for health-conscious consumers. It seems that the thirst for Ultra is tapping into younger-adult customers’ interest in moderation and the current heatwave.
• Jet2 has beaten expectations to post decent annual profits thanks to record passenger numbers, more airport bases and robust demand and it said that customers are still keen on overseas holidays at the right price. It noted the trend of customers booking nearer to the date of their holiday is continuing, which probably explains why they’ve still got a lot of winter capacity to sell.
• IN PROPERTY-RELATED NEWS – Halifax figures showed that property prices were flat in June, chancellor Reeves is about to extend the mortgage guarantee scheme brought in by the Conservatives in April 2021 to help first time buyers get on the property ladder and the Bank of England is looking to loosen mortgage lending restrictions while UK landlords continue to quit, resulting in the ongoing fall in rental properties, according to the latest RICs survey.

IN TECH NEWS…

• Nvidia became the world’s first $4tn public company as the AI frenzy continues! Will there be any more DeepSeek moments to burst the bubble, though??
• Apple appealed against a €500m fine from the European Commission for preventing developers from directing users to cheaper deals outside the app store. It is also bidding for Formula 1 rights in the US following the success of the Brad Pitt film and named a new COO.
• Samsung profits took a big hit from US chip controls and a disappointing performance in AI memory chips.
• OpenAI is clamping down on security following an overhaul of its security operations to protect its corporate IP. There have been claims of corporate espionage by Chinese rivals.
• IN CYBER ATTACKS – M&S is putting a positive spin on its recent problems, saying it’s a good time for a reset and we saw the US state department tightening cyber security after someone tried to use AI to impersonate secretary of state Marco Rubio in order to contact at least three foreign ministers via voice and text messages on Signal.

IN MEDIA NEWS…

• The UK’s biggest advertising firm, WPP, issued a profit warning in an unscheduled trading update. Later in the week, the company named a new CEO. It’s a positive move, but she’s got a big job on her hands to get things back on track!

IN SOCIAL MEDIA NEWS…

• Linda Yaccarino stepped down as CEO of X after a tricky time and X’s merger with xAI, which essentially demoted her. What now for X??

• Amazon had Prime Day this week, but kind of stretched it over a week to make more sales! Interest in what is essentially Amazon’s own Black Friday, has lost momentum over the years so it’s having to be more creative about discounting throughout the year.
• Fast Retailing, parent company of Uniqlo, has benefitted from identifying “summer all year” clothes as summers get longer and hotter in Europe, Asia and the US. The company is now on course to hit its most profitable year yet!
• IN SUPERMARKET NEWS – there’s increasing pressure by The Palestine Solidarity Campaign to raise awareness of the amount of Israeli food being sold in supermarkets. On the other side, Campaign Against Antisemitism said that the majority of British Jews believe that this constitutes an act of intimidation. Meanwhile, Asda has a new chief commercial officer who has a big reputation. His job is to get suppliers to lower their prices as the supermarket as a whole is trying to cut prices for customers. Good luck with that. I think the competitive environment is very different when he did the job before in 2006 to 2010.
• ON THE HIGH STREET – Poundland is struggling as big suppliers are tightening credit lines and payment windows because they believe that the chain’s future is uncertain. The discount retailer was sold last month for £1 to restructuring firm Gordon Brothers and they’ve already announced the closure of 68 stores, among other things. Stats from property analytics firm CoStar show that the London mayor’s expansion of the ULEZ has resulted in higher shop vacancies as footfall drops.
• IN RESTAURANTS – Pret a Manger has launched a new product – a bigger, posher and more expensive salad! Three of their new “Super Plate” salad offerings breach the £10 psychological price barrier, which is believed to be the limit of what people are willing to pay for a takeaway lunch! They say that there’s a trend for people to treat themselves when they’re in the office!

• Tesla’s share price took another dive as investors reacted to him creating a new political party. The company continues to lose ground in China…
• In the UK, carmakers are actually on track to meet EV sales targets. Meanwhile, according to Slater & Gordon, 23m people are expecting compensation for the car financing scandal! The Supreme Court is due to rule this month on a case that could open the floodgates to all sorts of claims for a very wide range of products.

• WeightWatchers (now called WW International) is reinventing itself after filing for bankruptcy in May and will offer a menopause programme as it pivots to female healthcare. This sounds like a great idea, particularly given the company’s experience of building communities.
• Novartis got approval from the Swissmedic official agency for for the world’s first ever malaria drug for newborns and infants! This is pretty brilliant given that malaria is deadliest for children under the age of five.
• US measles cases have hit their highest level since 1992, according to the latest data from the Centers for Disease Control and Prevention. Interestingly, US health secretary and vocal anti-vaxxer Robert F Kennedy visited West Texas to increase awareness about the measles outbreak – and his agency encouraged people to get vaccinated against it!
• Britain’s biggest student landlord, Unite Group, has seen its slowest start to the year in terms of bookings and some see it as a reflection of waning interest in university education.

I am so sorry to Ralph, but although his mountain biking video was great, I have to say that my fave video this week was the one of the mind-reading trick! I haven’t yet tried it on my kids but I am definitely going to!