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.
IT WAS ACTUALLY A FAIRLY QUIET WEEK ON THE MACRO FRONT...
- China growth fell to its slowest rate since 1992 (Monday) – 6.2% GDP growth – undershooting market expectations. However, the government will no doubt do its utmost to sort things out in the second half, including more tax cuts and an increase in infrastructure spending. Rising pig prices – as a result of the African swine fever epidemic – aren’t helping consumer spending power (Monday) as the Consumer Price index is getting upward pressure as a result, so Chinese are getting less to spend due to meat prices increasing
- Back in the UK, there’s good news for consumers as wages continue to outpace inflation (Wednesday) according to the latest figures from the Office for National Statistics which show that average pay growth is now 3.6%, with public sector pay growth seeing its highest growth rate since 2010. More spending power! Yipeee!
IT WAS A BIG WEEK FOR BIG TECH...
- Big tech came under pressure from Congress this week (Wednesday) as politicians from all sides were demanding more regulatory oversight of Big Tech’s sprawling businesses and asking about future expansion plans
- Facebook is facing massive resistance to its proposed Libra “stablecoin” cryptocurrency (Wednesday) from politicians and central bankers alike
- Google was accused of working with the Chinese (Wednesday) by Facebook board member Peter Thiel, who called for the FBI and CIA to investigate the company. Trump tweeted (naturally) that he would be looking into the allegations
- Amazon is going to be investigated by the European Competition Commissioner (Wednesday) over Amazon’s use of data from third party sellers
- Chip giant Qualcomm got a €242m fine from the European Competition Commissioner (Friday) for abusing its dominant market position, marking the end of a nine year case
- Netflix lost subscribers for the first time in almost ten years (Thursday) just when rivals like Disney, Apple and WarnerMedia are coming to market with their own offering
- On the positive side, Microsoft announced strong results (Friday) which were mainly due to the continued success of its cloud computing division
- eBay published better-than-expected results (Thursday) and upped its forecasts although its revenue growth suffered
IT WAS A MIXED BAG FOR UK HIGH STREET RETAILERS...
- Sports Direct got everyone in a panic because it postponed its results (Tuesday) due to issues related to integrating the House of Fraser acquisition (hmmmm)
- American real estate investment specialist Vornado announced its displeasure with Arcadia’s recent CVA (Wednesday), and will be taking them to court. This brings back a bit of uncertainty for the retailer who probably thought it had successfully bought itself some time with a CVA that squeaked through a vote a few weeks back
- Watches of Switzerland put in a strong performance (Thursday) in its first set of results since its May flotation
- Hotel Chocolat also had great results (Thursday) as it saw a 14% rise in sales and predicts profits to be in line with expectations despite splashing out on 16 new shops and expanding into the US (for a second time)
...AND IN M&A NEWS...
- Yandex and Uber, who are in a JV, bought Russia’s largest taxi company Vezyot (Tuesday), that will dramatically increase their combined market share in the country
- Stonegate owner TDR Capital bought Ei’s pubs (Friday) for a chunky 40% premium over the pre-deal price but we will have to wait to see whether the Competition and Markets Authority wave it through
- On the other hand, Fosun’s rescue of Thomas Cook was put in doubt (Tuesday) as Fosun still requires the approval of the banks and hedge funds that hold £1.6bn of Thomas Cook debt – and things aren’t looking great at the moment
- Also, ABInBev announced that it was going to sell off assets (Friday) after pulling the proposed IPO of its Asian business (Tuesday). It is expected to use the proceeds to pay down its massive debt pile
You are going to think that I am a bit of a softie, but my favourite “alternative” story of the week was Tiny munchkin kitten sleeps like an angel in the cutest position, winning hearts of Instagram (SoraNews24, Dale Role https://tinyurl.com/y2ju83cf). There, I said it! Have a great weekend whatever you get up to!