Watson’s Weekly 20-02-2021

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.

• In macroeconomic developments, Mario Draghi became Italy’s new Prime Minister (Monday) and laid out broad plans on how to turn the country’s fortunes around using a mixture of the EU’s recovery fund and structural reform. Japan posted better-than-expected quarterly GDP growth (Tuesday), the second consecutive quarter of growth, but commentators seem to be more downbeat on the prospects for the full year especially as the country is unlikely to get an Olympic boost given the covid-shaped cloud hanging over the event.
• In markets, Japan’s Nikkei 225 breached the 30,000 mark for the first time since 1990 (Tuesday) as Japan announced that it was rolling out the Pfizer-BioNTech vaccine. Bitcoin broke the $50,000 mark (Wednesday) and Elliptic, the world’s biggest cryptocurrency compliance company, said that it has seen a huge surge in requests from large banks about cryptocurrency (Thursday) – a further sign that the cryptocurrency is reaching the mainstream. There was another historic moment for the cryptocurrency as the world’s first Bitcoin ETF started trading in Toronto this week (Friday).
• In commodities, the Saudis said that they would up production from current levels from April (Thursday) after committing to cut production earlier this year. Raw material prices have had a huge rise from their 2020 lows (Wednesday), boosting confidence of the likes of BHP and Glencore, as iron ore prices have surged by over 85% and copper prices by over 80% since March lows. All eyes will be on the sustainability of China’s momentum as it accounts for at least 50% of global demand. Prices for crops have risen as well (Monday). Corn prices are at their highest level for seven years (up by 43%) while soybean prices shot up by over 50% and wheat by 15%. This is due to a combination of countries stocking up in case pandemic flare-ups cause supply problems again and countries restricting exports as they make sure their own country’s supplies are replenished first.

• JLR committed to becoming a 100% electric brand by 2025 (Tuesday), Ford said it would commit to 2030 (Thursday) but Daimler decided against putting a date on it (Friday), saying that it would continue to invest in EVs using money generated from its internal combustion engine-powered cars. Presumably they all want a piece of the EV action as Tesla saw sales of its cars rise by 90% last year in the UK (Friday). In other car-related news, VW appears to be considering a partial float of Porsche (Friday), which would presumably a useful chunk of change to throw at EV development.

• In the US, retail sales saw their biggest monthly increase in January than for the last seven months (Thursday) due to a combination of ongoing economic stimulus measures and an easing of business restrictions.
• In the UK, inflation was up (Thursday) on higher prices in food and furniture – which I think coincides with ONS figures showing strong property sales in December (Thursday). Increased activity in the property market prompts people to buy furniture and consumer electronics – and there’s arguably the additional boost from people stuck at home more wanting to improve their environment. Halifax said that demand for detached properties was also strong (Monday), which again is unsurprising as more people look to move from city centres to bigger properties in the ‘burbs where they can spread out a bit more.

• In the world of investments, private equity groups are now accelerating their pursuit of British companies (Monday), according to data provider Dealogic, presumably because Brexit is sort of done and valuations of UK companies aren’t as bloated as they are over the Pond. Interestingly, it looks like there’s going to be a wave of European SPACs coming as LVMH founder Bernard Arnault and ex-UniCredit chief exec Jean Pierre Mustier are getting together to form a Special Purpose Acquisition Company (Tuesday).
• In IPO and M&A news, Kanabo (Israeli medicinal cannabis company) and Cornish Metals (Canada-based miner) had successful market debuts (Wednesday) but the Competition and Markets Authority is now scrutinising the deal for Norway’s Adevinta (which owns Shpock among many other brands) to buy eBay’s UK classifieds business (Wednesday) to form the world’s biggest online classified ads group, potentially putting the whole thing in jeopardy.
• In vaccine news, there was some speculation as to whether the UK would be avoiding vaccine passports and moving towards rapid testing (Tuesday) as well as employers potentially making employees take jabs (Wednesday).
• In tech news, there was a big hoo-ha about Google and Facebook paying news providers to show content on their respective platforms. In the end, Google did a deal with News Corp (Thursday) but Facebook stuck to its guns – but then again, let’s be honest, when was the last time you looked for news on Facebook?? News is way more important to Google than it is to Facebook. Twitter is having problems in India (Wednesday) as the government attempts to seek out their help to quell dissenters, but Twitter isn’t playing ball at the moment. Other than that, Robinhood and others involved in the recent WallStreetBets frenzy faced Congress (Thursday). It’s over a few days and, at the moment, just looks like a load of senators trying to get airtime. It’s all noise at the moment, so it’ll be interesting to see whether anything actually comes out of it any time soon.

• Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly

My favourite “alternative” stories this week both came from Wednesday’s edition of Watson’s Daily. So this week I’m going to leave you with TikTok balance challenge goes viral as ‘women can do it but men can’t’ (The Mirror, Luke Matthews) as something to have a go at in between video calls😂 and the weird and wonderful combinations in Dad’s incredible crisp sandwiches sparked by Wotsits butty turn him into viral sensation (The Mirror, Kristy Dawson). Nice 👍!