Watson’s Weekly 14-09-2018

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. Clicking on the day will take you to the appropriate edition of Watson’s Daily.


  • Sweden got the results of its parliamentary elections (Tuesday) which showed a swing in support for the anti-immigration Sweden Democrats. Although the swing wasn’t quite as bad as originally feared, it was strong enough to leave behind a sticky situation for the remaining centre-left and centre-right parties in forming a government. They really need to sort this before the budget vote, which is due in December
  • Although it kind of doesn’t feel like it right now, it was actually a reasonably good week for the UK stats-wise. Wages are going up (Wednesday), job growth in UK manufacturing is at record levels (Friday) and even UK GDP is on the rise (Tuesday). This is good news, but I expect things to calm down the closer we get to Brexit
  • The oil price trended higher (Thursday) as global supplies are get tighter. Venezuelan supply has collapsed, Iran can’t take up any production slack because the US is imposing sanctions on it whilst severe outages in Libya and falling supply in Angola are all contributory factors hitting supply just as the US is facing storms that could disrupt the Colonial Pipeline (which runs through the Carolinas) or even the Gulf of Mexico


  • Chinese ride-hailing giant Didi Chuxing announced a big loss (Tuesday) for the first half of the year, against a hostile backdrop due to two of its drivers being involved in the murder of their passengers and public calls for greater safety. The fact is that Didi is WAAAAAY bigger than even its nearest rivals and has built itself up into an absolute beast of a company with 550m registered users – more than 50% of all of China’s internet users – and 30m drivers. I think its sheer scale will see it through, but it needs to square away all this bad news right now or it could find itself in an Uber-like nightmare.
  • Volvo decided to postpone its proposed initial public offering (Tuesday) to wait for better market conditions. Volvo, which is owned by China’s Geely, had originally pencilled in an IPO before the end of the year but Trump’s tariff shenanigans has obviously put paid to that for the time being. Not a surprise.
  • Yet another senior exec has left Tesla (Friday), as the company’s vice president of worldwide finance and operation, Justin McAnear, following the recent departures of its chief of HR, communications director and senior vice-president of software engineering. Things aren’t going great for Elon Musk at the moment.
  • Williams is working on a new joint venture with Unipart, called Hyperbat, which will make batteries for electric cars (Tuesday) that are twice as powerful as those currently being put into Tesla cars. The batteries will be for Aston Martin’s first ever electric car, the RadpidE.


  • The world’s biggest retailer, Inditex, unveiled a decent set of results (Thursday) against a mixed backdrop for retailers worldwide. It has managed to strike a decent balance between online and offline services, but other apparel retailers have started to copy its model and it is also facing potential headwinds in the form of currency problems given that almost all of its merch is made in Europe but over half of it is sold outside the Eurozone.
  • Debenhams hit the headlines a lot this week, firstly batting away suggestions it was in trouble (Monday) and then towards the end of the week Sports Direct had to issue a formal statement saying that it did not plan on making a formal bid for the department store (Thursday) for six months, whilst at the same time reserving the right to make a bid if there was a “material change of circumstances” with agreement from the board or after a bid from a third party. This all happened because one of the senior execs let slip that the board had discussed the possibility of taking it over.
  • John Lewis saw its profits fall by a whopping 99% (Friday) as it continues its major restructuring programme. Its “Never knowingly undersold” promise came in for a lot of criticism, although its chairman Sir Charlie Mayfield defended it. I think it is massively outdated and needs to get ditched given the current retail environment.
  • Morrisons announced its best sales figures in years (Friday) as the fruits of the turnaround are starting to come through after store revamps, broadening of product ranges and pepping up the online business via its partnerships with Ocado and Amazon.


  • The US Federal Drug Administration said it might ban all flavoured e-cigarettes (Thursday) in order to “narrow the off-ramp for adults to close the on-ramp for kids”. Players in this area such as Juul Labs (which has a massive 70% market share in e-cigarettes) will have 60 days to come up with a plan to stop young people starting the habit. Big tobacco companies saw their shares rise because a) they are used to tons of restrictions b) because vaping is only a tiny bit of their overall business and c) they have far deeper pockets than the smaller specialists.


My favourite bit of “bants” this week was about Surrey Police getting down with the kids in Police hope this embarrassing ‘slang dictionary’ will help them engage with young people (Metro, Harley Tamplin https://tinyurl.com/ycqxxm69). Brilliant. Especially the bit about Stormzy!

Have a great weekend!