Watson’s Weekly 💘 14-02-2026

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 WAR NEWS…

• UKRAINE – Zelenskyy is planning presidential elections and a referendum to coincide with a potential peace agreement with Russia as the Trump administration pressures Kyiv to decide the presidency and the end of the war by May 15th. Failure to do so could result in the withdrawal of proposed US security guarantees. Trump is presumably keen to showcase peace progress ahead of November’s midterms. Officials say the announcement of the elections and referendum will come on February 24th, the fourth anniversary of Russia’s invasion.

IN TRUMP THINGS…

• TARIFFS – the US House of Representatives voted to terminate the national state of emergency that Trump invoked in February last year to empower him to slap tariffs on Canadian imports. Notably, six Republicans crossed party lines to join the Democrats on this despite threats from Trump that dissenters would face electoral consequences. Polls show most Americans oppose the tariffs. This raises the likelihood that other tariffs could be challenged.
• Federal Reserve research shows that US businesses and consumers (not the foreign companies exporting goods to America!) paid around 90% of tariff costs in 2025! Foreign exporters did actually absorb more costs as the year wore on, though. White House officials argued that inflation fell and corporate profits rose despite the higher tariffs. Some economists expect delayed inflation effects as pre-tariff stockpiles run down, while others think the worst has passed.
• TAIWAN – the US and Taiwan signed a trade agreement that cut tariffs on Taiwan to 15% in return for a $250bn commitment to US semiconductor investment.
• CLIMATE – Trump scrapped the legal basis which US climate regulation has relied upon since 2009, marking Trump’s biggest rollback of environmental policy so far! He argues that the legislation was “the legal foundation for the green new scam – one of the greatest scams in history”, held industry back and pushed prices up for consumers.
• IMMIGRATION – Trump’s border tsar ended the Minnesota immigration crackdown after Operation Metro Surge caused outrage and two deaths. Although over 4,000 arrests were made, polls suggest most Americans felt federal deployments in cities went too far, underscoring political sensitivity in the year of the midterms.

IN REGIONAL/COUNTRY NEWS…

THE AMERICAS

• THE US – Although received wisdom suggests that America is lost to the world now, at least while under Trump’s stewardship, it’s still possible that relations could normalise. There have been recent signs of push-back against his policies both internationally and domestically, from Davos speeches urging unity among middle powers to protests against immigration enforcement and criticism from Republicans and business leaders. For the next few years at least, though, countries will no doubt endeavour to reduce reliance on the US.
• Epstein repercussions continued as lawmakers urged commerce secretary Howard Lutnick to step down over previously undisclosed links to Epstein. Although interactions appear to have been limited, his denial raises political risk.

ASIA

• CHINA – China stepped up activities near Taiwan as fighter jets manoeuvred close to Taiwanese aircraft and fired flares, reflecting heightened tensions.
• China is keen to open up new shipping routes- a Polar Silk Road – in the Arctic. It’s been producing powerful new icebreakers to help its presence there. Western concern is rising over Chinese and Russian activity.
• JAPAN – Japanese stocks boomed after Sanae Takaichi’s landslide election victory delivered a two-thirds lower-house supermajority, boosting expectations of stimulus and corporate investment. The feelgood pushed major indices to record highs.
• Takaichi is considering constitutional reform, potentially revisiting pacifist Article 9 which forbids Japan from having an army, navy and air force (although it does have a “Self Defence Force”). This will be hugely challenging, even with her supermajority, but China’s sabre-rattling in the region might tip the balance. If – and it’s a big if – she manages to change Article 9, it could have a major impact on defence spending (i.e. if will go up a lot).

EUROPE

• SWITZERLAND – Switzerland will vote on capping population at 10m by 2050 amid strong support from the Swiss People’s Party. Rapid population growth and high foreign residency are driving concerns about infrastructure, environment and housing.

THE UK

• Starmer faced a tricky week following Epstein-related fallout and the resignation of his chief of staff and head of comms. Starmer defied calls to quit and managed to get cabinet backing (eventually!), which helped to stabilise markets and calm fears. Expectations of higher taxes and stricter labour laws under a more left-leaning leadership is a worry for businesses.
• The UK economy grew just 0.1% in the final quarter of 2025 but I think that even this was quite an achievement given how late the Budget was! Early signs of renewed consumption suggest cautious optimism…

IN COMMODITIES…

• OIL – BP decided to stop share buy-backs due to weakened annual profits. It became the first big oil company to suspend share buy-backs but all of them have delivered lacklustre performances over the past year, so BP’s move could prompt similar action across the sector.
• SILVER – Retail traders kept buying silver despite price plunges that erased most of the gains made this year. Investors poured about $430m into the largest silver ETF last week alone! This behaviour suggests investors are chasing a meme-style rebound…
• NICKEL – The nickel price jumped as Indonesia slashed production quotas at the world’s biggest mine in order to tighten supply and support the price. Authorities have been trying to counter years of oversupply that pushed prices from above $100,000 per tonne in 2022 to below $20,000 for the past eighteen months. Nickel remains crucial for stainless steel and EV batteries, so supply discipline matters.

IN MARKET & INVESTMENT TRENDS…

• IN MARKETS – we saw the emergence of Wall Street’s “anything-but-tech” trade as investors rotated away from expensive tech company shares and into supermarkets, energy companies and manufacturers. Funds focused on non-tech companies attracted $62bn in the last five weeks alone, exceeding inflows for all of 2025! Investors are getting increasingly worried about AI capex.
• THE SECTOR SELL-OFFS – the share prices of US brokerages including Charles Schwab, Morgan Stanley and Raymond James weakened following the launch of a new AI-powered tax planning tool from fintech Altruist. That was then followed by plummeting share prices of UK wealth managers including St James’s Place, AJ Bell, Quilter and Aberdeen, alongside Switzerland’s Julius Baer and France’s Amundi who also tanked for the same reason.
• Companies behind price comparison sites including MoneySupermarket and Go Compare also fell following the launch of an AI-powered tool from Insurify that offers personalised insurance quotes. Markets currently assume new AI tools will quickly disrupt incumbents, although real-world effectiveness may vary.
• Property services companies including Savills, British Land, CBRE and others also fell on fears that labour-intensive models face AI disruption. I believe that such sweeping declines may create buying opportunities because disruption will differ widely across firms with established reputations and resilient niches.
• IN IPOs – banks pushed for faster European IPOs to reduce market risk, with bookbuilding periods shrinking to about five days on average and sometimes just three. Shorter timelines reflect concern that sudden political shocks could derail valuations mid-process. Strong current valuations encourage urgency in bringing listings to market.
• Broker Clear Street’s postponed IPO illustrates this risk, as volatile markets and weak demand halted plans to raise up to $1.1bn. Companies hoping to float may need to act quickly before favourable conditions disappear.
• IN M&A – NatWest agreed to buy wealth manager Evelyn Partners for £2.7bn after outbidding Barclays, marking NatWest’s largest deal since the financial crisis bailout. The acquisition strengthens NatWest’s wealth management presence and diversifies income away from interest rate sensitivity, complementing its ownership of Coutts and adding roughly £69bn in client assets.
• Schroders agreed to a £9.9bn takeover by US manager Nuveen. The combined group will nearly double Nuveen’s size and rank among the world’s largest active managers. Strategically the deal fits because Nuveen is strong in US and private markets while Schroders brings complementary capabilities and brand value.

IN FUNDING/MONEY-RAISING…

• Anthropic raised $30bn at a $350bn valuation, giving the young AI company major resources to compete with leading tech giants despite being founded only in 2021!
• A 25-year-old founder raised $220mn for AI chip start-up Olix, targeting faster and cheaper chips focused on inference demand. Success could strengthen the UK’s AI ecosystem if American Big Tech doesn’t swoop in to buy it!
• British self-driving start-up Wayve is meanwhile pursuing funding that could value it near $9bn. Its technology differs from rivals by learning roads without detailed prior mapping, supporting the expected rollout of driverless taxis in the UK.

IN BUSINESS TRENDS…

• Investors – and companies – are getting jumpy about AI start-ups who disrupt the business of big companies that splice and dice information for distribution to customers. This is why we’ve seen whole sectors sold off one by one over the last two weeks!

IN EMPLOYMENT TRENDS…

• IN THE US – job creation beat forecasts with 130,000 new roles in January but then projections for 2025’s overall numbers were sharply downgraded, making last year one of the weakest for employment growth outside the financial crisis and Covid. This stronger-than-expected data may reduce pressure on the Federal Reserve to cut interest rates in the short term.
• Concerns about “AI-washing” are also growing as companies attribute layoffs to artificial intelligence rather than tariffs, pandemic over-hiring or profit pressures. While AI will eventually reshape many roles, widespread immediate replacement seems unlikely despite political convenience in blaming technology.
• IN THE UK – UK unemployment increased to about 5.1% but surveys suggest hiring declines may be stabilising and some freezes are being lifted now that Budget uncertainty has passed. This improvement could still be fragile if political instability returns and clouds the economic outlook.
• Barclays replaced most of a London copywriting team with staff in India, who will be supported by AI. The move reflects cost management rather than pure automation, forming part of a broader £2bn savings plan – but it is interesting and maybe others will consider taking similar action…

IN CONSUMER TRENDS…

• IN HOSPITALITY – research by CoStar shows that the world’s most expensive hotels have been able to charge record prices in defiance of the luxury slowdown, showing that affluent travellers continued spending heavily last year. Hoteliers are therefore prioritising richer customers who are less sensitive to economic swings, creating a widening divide between ultra-luxury venues and the broader hospitality market, particularly in the US.
• IN FOOD CONSUMPTION – the rising use of weight-loss jabs has resulted in sugar prices crashing to their lowest levels in five-years. The jabs suppress appetite and cravings for sweet things, which in turn is hitting demand for sugar. It could even worsen from here as pill versions of these drugs become cheaper and more widely available. 
• IN TRAVEL – Europeans are shunning the US as travel to the Emirates and Asia is proving to be more popular. Immigration concerns and stricter border scrutiny are contributing factors to weakening long-haul demand to America. Tui said that Western European visits to the US fell 4% year on year in December, yet Tui still delivered its strongest first quarter in over a decade, driven partly by cruise demand.
• IN THE UK – the latest BRC figures show that retail spending bounced back after a weak December but retail volumes are still below pre-pandemic levels, suggesting discounts may be required to sustain momentum.

IN REAL ESTATE…

• The property market in England and Wales is showing tentative signs of recovery, according to the latest RICS survey. Buyer inquiries, agreed sales and prices are all on the up and optimism about the outlook is better than its been at any time since December 2024!
• However, research from the Building Societies Association suggests UK would-be first-time buyers are being overly pessimistic as many have not explored mortgage options – and are subsequently discovering they could buy sooner than expected. Perceived inaccessibility is delaying life decisions such as marriage, children and business creation. Efforts to promote low-deposit mortgages may help, though changing attitudes will take time.

IN RETAIL NEWS…

• Tesco bought Amazon Fresh shops to support expansion of more than 70 new Express convenience stores by 2027, adding to its existing network of over 2,000 outlets. Rival supermarkets are pursuing similar strategies, squeezing smaller convenience store competitors lacking scale and buying power.
• Ocado is planning to cut around 1,000 jobs as it seeks cost savings following warehouse closures by overseas partners and a share price fall exceeding 40% in six months.

IN CONSUMER GOODS…

• L’Oréal reported improving beauty demand in the US and China during late 2025, signalling recovery after post-pandemic weakness although results slightly missed expectations. The rebound reinforces what other luxury names has been saying.
• Mattel shares cratered after poor holiday sales forced discounting and drove an unexpected profit decline, reflecting tariff exposure due to overseas manufacturing. This doesn’t appear to be an “industry” thing because Hasbro actually put in a decent performance over the same time period! However, both are downbeat about the outlook as they expect consumers to be thrifty against an uncertain economic backdrop.
• Kraft Heinz has made the dramatic decision to reverse out of its plans to split the business, with its new CEO instead pursuing organic turnaround following investor scepticism toward the proposed break-up. Weak quarterly results and reversal of strategy suggest deeper structural challenges across the combined business.
• Heineken is planning to cut about 6,000 jobs over two years as global beer demand weakens and profit growth expectations fall, echoing similar pressures across the alcohol industry.
• Oatly is barred from using the word “milk” for plant-based products in the UK after a supreme court ruling, marking another setback for a sector already facing slowing momentum.

IN TECH NEWS…

• Co-founders of Elon Musk’s xAI continue to depart as internal tensions rise, with research and safety leader Jimmy Ba becoming the latest to leave. Half of the original founders have now left and the sale of xAI to SpaceX has added further strain. Although this instability is concerning, Musk’s reputation will still attract new talent.
• IN AI – French start-up Mistral has seen revenues surging twentyfold to over $400mn as European governments and businesses seek non-US AI alternatives. Its strategy of operating independent data centres rather than relying on American hyperscalers highlights Europe’s push for technological autonomy.
• IN HARDWARE – Apple is facing renewed political friction with the Trump administration amid accusations of promoting biased media content. The dispute reflects broader tensions between Trump and major tech groups over perceived ideological control of information.
• Apple and Google have meanwhile agreed with the UK competition regulator to reform app store practices by avoiding preferential treatment for their own services and limiting the use of third-party data. Additional developer access to operating system features has also been promised. The softer regulatory approach compared with the EU has disappointed some critics who wanted them to take a tougher line.

IN SOCIAL MEDIA NEWS…

• European governments are increasingly attempting to restrict children’s access to social media as France, Spain, Greece, the Netherlands and Denmark are all currently some way towards implementing some kind of social media ban for younger people while the UK parliament is giving it some serious consideration. Stronger age verification at operating system or app-store level may be necessary alongside tighter controls on circumvention tools like VPNs.
• Russia blocked WhatsApp and is instead promoting a state-aligned messaging alternative designed for surveillance, following earlier action against Facebook, Instagram and YouTube. The move reflects broader efforts to monitor dissent and control information flows.

IN STREAMING…

• Spotify has tripled profits and added record users despite global price rises, demonstrating strong demand and pricing power. Recent US price increases were not yet reflected in results, suggesting that there could be further potential upside.
• Pinterest shares have fallen sharply after warning of weaker advertising demand as retailers cut marketing spend to protect margins from tariffs. If such behaviour spreads, dissatisfaction with trade policy could grow.

• Ferrari reassured investors with stronger-than-expected results and confident forecasts alongside plans to launch six new models this year, easing prior concerns about sustainability of performance.
• Ford is continuing to struggle with EV-related losses, reporting a large annual deficit and outlining expectations that its EV division is going to remain unprofitable for several years. Tariffs and supply disruptions have compounded difficulties although traditional vehicle demand is actually pretty robust. Meanwhile, Ford has now been overtaken in sales by China’s BYD, highlighting shifting global competitive dynamics.

• Hims & Hers has abandoned plans to sell a cheaper copy of Novo Nordisk’s weight-loss drug following regulatory scrutiny, removing a potential legal conflict and benefiting the original manufacturer, Novo Nordisk.
• AstraZeneca, meanwhile, is outperforming industry peers through particularly strong drug development success rates and a robust research pipeline, allowing it to trade at a valuation premium while avoiding the acquisition pressures faced by rivals confronting patent expiries and higher debt.

My favourite video of the week is the one with the barcode musicians – how did they even think of this??