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.
BIIIIIG DEVELOPMENTS THIS WEEK IN THE UK AND ACROSS THE POND...
- Boris Johnson won the UK general election (Friday) by a majority. He needed to, considering that UK employers became more reluctant to recruit (Tuesday), GDP had flatlined (Wednesday) and shoppers have been staying away from the high street (Monday)
- Over in the US, interest rates stayed unchanged (Thursday) in the 1.5-1.75% range, Trump signaled that the NAFTA-replacing USMCA was heading in the right direction (Wednesday) and announced a partial trade agreement with China (Friday), which sent markets stronger
- Elsewhere, Japan’s cabinet office raised its GDP forecast for the year (Tuesday), although there is concern that there will be a marked drop-off in the final quarter as spending may have increased sharply ahead of the raising of consumption tax (Japan’s equivalent of VAT) on October 1st from 8% to 10%. The Greek government announced it would be cracking down on tax evasion (Monday) by imposing a big fine on anyone who fails to spend at least 30% of their income digitally. The government has projected that it will be able to raise over €500m per annum via this initiative!
THERE WERE SOME INTERESTING REVELATIONS AND DEVELOPMENTS IN RETAIL...
- Tesco announced that it is considering the sale of its Thai and Malaysian businesses (Monday). European retailers have tended to fail miserably in their Asian businesses, but Tesco’s is an exception. The dilemma here is whether Tesco takes a fat offer here and uses the proceeds to boost its core UK business or hangs onto a business with attractive operating margins
- Accounting errors had repercussions at Ted Baker (Wednesday) as both the CEO and Chairman resigned following the revelation of a major accounting error last week and then Superdry revealed an accounting hole of its own (Friday), albeit on a much smaller scale
- The UK competition regulator asked Amazon and Deliveroo to respond to their concerns (Thursday) about the stifling of competition in food and grocery delivery given how strong they both are in their respective areas, or face a time-consuming investigation. Amazon took a 16% stake in Deliveroo in May and it’s possible that Amazon could be forced to sell or reduce its stake in the food delivery company if the investigation finds against them
THERE WAS ALSO SOME NEWS ON CAR SALES AND DRIVERLESS...
- French car parts maker Valeo said that it thought China car sales had bottomed out (Tuesday) as it saw an uptick in this third quarter with a 5% rise in like-for-like equipment sales in China but then the China Association of Automobile Manufacturers showed that sales in the world’s biggest car market could fall by 2% in 2020 (Friday) after an 8% fall this year and a 3% fall in 2018, so maybe Valeo was being a bit premature. Automobile makers could certainly do with a sales boost in the world’s #1 car market
- There were some interesting developments in autonomous driving this week what with VW making an unspecified investment into start-up Aeva (Thursday) which claims to have invented a new lidar (a light detection and ranging sensor) that is cheaper and more efficient than current options. Lidars help the car to know the distance and depth of objects by creating 3D maps. Current versions are big and unweildy (and can cost thousands of dollars) while Aeva’s is on a single chip with no moving parts and can be fitted next to a car’s lights – for the price of $500. Then there was news that Waymo bought Oxford AI firm, Latent Logic (Friday), which builds extremely realistic road and car simulations that can be used to train AI software for driverless vehicles. There were no details about how much was paid, but the company had been valued at £8m at a fund raising round earlier this year, so this is quite small in the scheme of things
BANTER
My favourite “alternative” stories of the week this week were Die Hard On Ice parody video released and it’s nothing if not Christmassy (Metro, Jamie Tabberer https://tinyurl.com/sjep2zc) and the potentially very useful How to improve your singing at karaoke with a deceivingly simple trick (SoraNews24, Eli Pang https://tinyurl.com/v5qrfvf)
I hope you have an enjoyable weekend!