Watson’s Weekly 17-05-2019

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. You will need a FULL SUBSCRIPTION to be able to click through all the links which take you to the relevant articles.

• US manufacturing slowed down (Thursday) on trade war repercussions whilst the German economy picked up (Thursday) after narrowly missing a dip into recession not so long ago. Germany benefited from solid investment in construction and machinery as well as strengthening private consumption. It will be very sensitive to trade war developments as it is a big exporter, so although this heralds a move in the right direction for the Eurozone’s biggest economy, no-one’s getting too carried away at the moment
• UK employment reached record levels (Wednesday) as the latest figures from the Office for National Statistics showed that unemployment fell from 3.9% to 3.8% in the latest quarter. On the downside (for employees, anyway!) wage growth actually slowed down from 3.5% to 3.3% over the same period, but this isn’t too bad as it is still above inflation (which is currently at 1.9%). Brexit concerns were thought to be behind the wage slowdown
• Bitcoin smashed through $8,000 this week (Wednesday) after that mini-frenzy over the weekend, but it is now bumping along at around the $7,100 mark

• Beyond Meat competitor Impossible Foods just raised $300m (Tuesday) which effectively increased its implied valuation by two-thirds to $2bn. The fundraising came shortly after Impossible Foods announced its distribution tie-up with Burger King in the US where the latter is rolling out the “Impossible Whopper” to over 7,000 restaurants. No doubt many expect Impossible Foods to seek out a listing, especially given the success of the Beyond Meat’s recent flotation
• Amazon led a $575m investment into Deliveroo (Friday) which the food delivery company will use to buy a fleet of Ferrari and Lambo delivery vehicles build out its engineering team, broaden its reach and develop new products. Interestingly, Amazon operates its own food delivery service called Amazon Restautants offering one-hour restaurant delivery to Prime customers, but it canned the service in the UK. Exciting times for Deliveroo

• Amazon and Next signed a deal this week (Wednesday) enabling customers to collect their Amazon deliveries from Next shops. This is great for both sides as it makes things convenient for Amazon customers, but it also gives Next access to higher footfall, thus increasing its chances of making better sales. More retailers are expected to sign up with Amazon on this
• Walmart launched next-day delivery (Wednesday) for online shoppers who spend at least $35. The new service will kick off in Phoenix and Las Vegas and then be rolled out to southern California in the coming days and everywhere else in the coming months, eventually reaching 75% of the US population by the end of the year. It’s great to see Walmart making progress with its online business! Walmart also published strong results (Friday) as sales were boosted by online purchases and solid trading over the Easter period. Although the domestic business is going from strength to strength, it still needs to get its international business sorted – and it mooted the possibility of a flotation for Asda (Thursday) following its recent failed merger attempt with Sainsbury’s

• Car manufacturing continues to be tricky as both Ford and Honda confirmed UK job losses (Tuesday), Nissan announced some shocking results (Wednesday), Tesla tried to avert future fires in its cars via a software update (Friday) while growth is looking rather ropey in India (Wednesday), which isn’t great as many see it as a major growth market
• Malls are being hit by the current turmoil in UK retailing as Landsec posted a loss due to a big fall in the value of its property portfolio (Wednesday). Competitor British Land also announced a loss following property revaluation (Thursday). Neither company expects things to get much better in the near term
• Travel companies have also been hit badly as both Tui (Thursday) and Thomas Cook (Friday) saw poorer bookings as customers held off booking holidays on Brexit concerns

I normally put an “amusing” story in this section to end the week, but this article resonated with me most strongly this week for a number of reasons: Thousands praise library assistant for epic list of things they learnt from job (The Mirror, Courtney Pochin https://tinyurl.com/y5uo8oht). Support your local library if you can!

Have a great weekend!