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.
AMERICA STAYS STEADY, EUROPE WOBBLES AND THE OIL PRICE HITS $60 A BARREL...
- The Fed reiterated its commitment to low interest rates (Thursday) as chief Jerome Powell keeps everything unchanged, including the 2% inflation target.
- China may actually get a coronavirus boost this month (Friday) as the traditional mass migration of workers to their respective home towns and villages is likely to be way lower than normal due to travel restrictions. This means that factories will stay open and exports won’t have their normal dip at this time of year. China continues to win at the moment!
- In Europe, Mario Draghi is getting close to putting together an Italian government (Tuesday) as he brings opposite sides of the coalition together while EC boss Ursula von der Leyen eats humble pie (Thursday) and admits shortcomings in her centralised vaccination distribution strategy
- The oil price returned to pre-Covid levels as it breached $60 a barrel (Tuesday). Oil bulls will say that prices should rise due to a combination of vaccine rollout, co-ordinated economic stimulus packages and potential supply shortages from having cut projects and capacity last year. Oil bears will say that China demand is already at normal levels and that hopes of European and US recovery are too optimistic.
- In specific oil company news, Total was the latest major to announce a big loss (Wednesday), but it was actually less than everyone had been expecting. BP paid £900m for rights to build wind farms in the Irish sea (Tuesday) and Shell announced that it would be carbon-neutral by 2050
M&A ACTIVITY CONTINUED AND BUMBLE MADE ITS DEBUT...
- Match Group bought South Korean media company Hyperconnect for €1.73bn (Wednesday) – its biggest ever acquisition. It signals a departure from its core dating-focused business. While we are on the subject of dating, Bumble had a successful IPO (Friday), proving continued investor interest in IPOs and tech stocks.
- Electronic Arts bought Glu Mobile for $2.4bn (Tuesday) as part of its aim to become “a market leader in lifestyle and sports”
- The UK had its fastest start to M&A deals since the 2008 financial crisis (Monday) and I think momentum will continue to pick up as more businesses get distressed the longer lockdown goes on and investors continue to accumulate cash
- Kraft Heinz sold Planters peanuts sale to Hormel Foods for $3.35bn (Friday) as part of its plans to cut debt levels
BITCOIN GOT MORE ENDORSEMENT, MUSK SHOWED HIS POWER AND CANNABIS GOT THE REDDIT TREATMENT...
- Bitcoin got endorsement from Tesla at the beginning of the week (Tuesday) as the EV manufacturer revealed that it had spent $1.5bn on the cryptocurrency. Then it turned out that both Uber and Mastercard have plans to accept Bitcoin payment (Friday), sending it even further north!
- Trading-advice-hub-of-the-moment Reddit raised $250m in its latest funding round (Tuesday) and said that it would spend the money on video, advertising and consumer products
- Cannabis attracted the attention of amateur traders this week (Thursday) after targeting the likes of GameStop, AMC Entertainment and silver in the last couple of weeks. Tilray’s share price shot up by over 50% in trading on Wednesday!
...WHILE THE HIGH STREET AND RETAILERS CONTINUE TO HAVE A BUMPY RIDE...
- Our high streets are going to be increasingly “gappy” once lockdown lifts as Debenhams on Oxford Street is due to close down next week (Wednesday). This probably explains why landlords are going to be losing out on £140m in rent (Tuesday) as Boohoo bought the remnants of Arcadia (Tuesday) – but not the shops. The trend of online apparel retailers buying brands but not the outlets continues…meanwhile, Frasers Group sold its 25% stake in French Connection (Tuesday) at a loss compared to its purchase price.
- In restaurants, coronavirus restrictions have hit hard. The new owner of Prezzo is closing more restaurants (Thursday) but drinks companies including Carlsberg (Monday), Heineken (Thursday) and Coca-Cola (Thursday) have also suffered as a result of people not being able to go out. On the other hand, Fulham Shore is ploughing ahead with expansion of its pizza chain Franco Manca (Tuesday) as landlords fall over themselves to offer them rent-free prime sites.
- In groceries, Sainsbury’s is putting pressure on Aldi (Thursday) by price-matching 250 products and we saw official figures confirming what we already know – that online grocery shopping has been increasing (Wednesday) under lockdown
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
I’m just going to leave you this week with my favourite Japanese yodeller, Takeo Ishci in one of his more recent works, Chicken Pig Attack. Watch out for the dodgy lyrics – but hey, you just can’t fault the yodelling 👍. Gotta love YouTube for things like this! Have a great weekend!