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.
MORE PROMISES WERE MADE, CHINA WAS A BIT MEH AND OIL STAYS AROUND $40...
- IN THE US – Fed chief Jerome Powell reiterated his caution regarding an economic recovery (Wednesday), but on the other hand, Trump promised a $1tn infrastructure project (Wednesday) to help stimulate jobs and investment over a period of ten years. TBH he can say what he likes – it’s over a very long period of time and he might not even be there to oversee it! He wanted to encourage the building of roads and bridges. However, there was no word about walls with Mexico, though 😂
- IN CHINA – industrial production improved – but fell short of market expectations (Tuesday) and household consumption was disappointing (Tuesday) as consumers remained cautious about spending
- IN EUROPE – president Macron lifted most lockdown restrictions (Monday) so all French schools will open fully for compulsory attendance from June 22nd. Bars and restaurants will now be fully open (they have been restricted recently to serving customers outside) and travel within Europe will return to normal while international travel will start from July 1st
- IN THE UK – inflation fell to 0.5% (Thursday) as consumers just aren’t really buying much at the moment and the Bank of England injected a further £100bn into the economy (Friday) to get it going in order to avoid the much-feared-yet-expected prospect of mass-unemployment when the furlough scheme comes to an end
PHARMACEUTICALS FEATURED HIGHLY THIS WEEK...
- The German government paid €300m for a 23% stake in biotech firm CureVac (Tuesday), heeding recent advice for European nations to take stakes in key companies to avoid foreign takeovers
- The FDA withdrew emergency Covid-19 use approval for chloroquine and hydroxycholoquine, taken by Trump (Tuesday) because they have now been deemed to be ineffective for treating Covid-19
- Royalty Pharma was the latest IPO to fly (Wednesday) as its share price shoot up by 60% on its debut, continuing the current IPO feel-good factor going on at the moment
- Then British scientists discovered a cheap and widely available generic steroid significantly cut Covid-19 mortality rates (Wednesday) called dexamethasone
TECH SAW SOME MAJOR DEVELOPMENTS...
- There was a lot of transatlantic pouting going on this week as the US abandoned talks with the Europeans to sort out a digital tax (Thursday) to force Big Tech companies to pay tax where they make their money, but the Europeans remained defiant (Friday). The US threatened to punish any countries that just went ahead and implemented their own digital services taxes
- Apple faces an investigation by the EU competition commission (Wednesday) following allegations that it has breached competition rules after years of niggle from Spotify and other regulators. The allegations concern Apple forcing apps to pay them a 15-30% cut as well as a ban on telling users other ways of paying for the digital content. If it is found to be in breach, Apple could be fined up to 10% of its global turnover
- Facebook launched WhatsApp Pay in Brazil (Tuesday) enabling Brazilian WhatsApp users to transfer money to each other for free and make purchases from small businesses all within the app itself. The company has plans to roll out the service to Mexico, Indonesia and India as it looks like it trying to move towards a “super app” model as per Tencent’s WeChat
...AND IN OTHER MAJOR DEVELOPMENTS...
- IN FINANCE-RELATED NEWS – Mastercard and Visa are facing a humongous bill (Thursday) as the UK’s highest court, the supreme court, ruled that the transaction fees they charge breach competition laws. Fines, which could run into the billions, will have to be paid to Asda, J Sainsbury, Argos and Wm Morrison but there is further legal wrangling to come over the amounts. Nationwide decided to triple the amount it demands for a mortgage deposit (Thursday), which is unsurprising given the uncertain state of the UK real estate market at the moment and the very real prospect of many loans going bad and then there was disaster at German payments-processor Wirecard which announced that €1.9bn was missing from its accounts (Friday). The company processes tens of billions of Euros each year but has faced scrutiny over its accounting practices over the last 18 months
- The UK’s Cineworld is being taken to court for backing out of the acquisition of Canada’s Cineplex (Tuesday). The acquisition was announced before the coronavirus outbreak. Cineworld is basically saying that things have changed and Cineplex is saying that they want to stick to the terms of the deal. Expect loads of this for the forseeable future as deals negotiated in the bull market leading up to the outbreak unravel
- It’s also interesting to see that Ikea (Monday) and paper and packaging company Bunzl (Tuesday) are planning to pay back the furlough money as they’ve actually traded better than they had thought through the outbreak. It’s good to see companies “do the decent thing”, but I would imagine this kind of action will be the exception rather than the norm
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates: watch this space!
My favourite “AND FINALLY…” story this week are Cuban dons full-body cardboard shield against coronavirus (Reuters https://tinyurl.com/y9yrsrpb) and the brilliant Dog owners share hilarious photos of unrecognisable pets after they find mud (The Mirror, Luke Matthews https://tinyurl.com/y8xwnrv7). I can identify with that!