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.
THIS WEEK WAS ALL ABOUT THE EU BAILOUT...
- This was a big week for Europe. Although things were looking a bit tricky for a while, everyone came to an agreement on the European bailout proposal eventually (Tuesday). The overall package was still $750bn, but the proportion of grants versus loans changed (grants were reduced) and the “Frugal Four” became the “Frugal Five” with the addition of Finland. Brussels now has the power to raise a huge amount of money and then dole it out as it sees fit…
IT WAS ALSO A BIG WEEK FOR TESLA AND THERE WAS A KEY DEVELOPMENT FOR FIAT CHRYSLER...
- Tesla managed to report a fourth consecutive quarter of profits (Thursday), which means that it is now eligible for entry into the S&P500. It’s come a long way since it was founded in 2003! It’s amazing how a car company that sells b*gger all cars has grown this big – but when you have a crazed (remember the “paedo guy” comment he made about one of the Thai cave rescuers a few years back??) genius at the wheel, everyone wants to go along for the ride 😂 It will be doing a lot of hiring from now on for its new Texas production facility (Friday)
- Given Tesla’s massive share price rise, everyone else is desperately trying to play catch-up with their own electric vehicle (EV) offering (Monday). GM said last week it’s developing 20 new electric models by 2023 (including an electric Hummer, no less!), Ford is selling an electric Mustang SUV and Jeep is preparing to bring out an electric Wrangler! It’s all going on!
- Then Fiat Chrysler Automobiles (FCA) signed a deal with Google’s Waymo to use its driverless tech (Thursday), thereby ending the company’s 18-month relationship with Amazon-back Aurora. Waymo is widely thought to be most the most advanced among its rivals on driverless tech
TIKTOK, SNAP AND MICROSOFT HAD A MIXED WEEK...
- Given all the US vs China vs The World stuff going on at the moment, it was hardly surprising to see that TikTok suspended plans to build a UK HQ (Monday), but then the rhetoric intensified as it turns out that venture capital firms General Atlantic and Sequoia Capital have been talking to the US Treasury and other regulators about the possibility of buying TikTok out of current parent ByteDance (Thursday) and giving it a minority stake with no say in the business. There is a debate going on right now about imposing a ban on TikTok in the US due to data security concerns and, at first glance, it would seem to me that this could be the least bad option for ByteDance. Get the popcorn – this could get interesting
- In other social media news, Snap reported slower revenue growth for the second quarter (Wednesday) but it added that advertisers were starting to spend more. It increased its user base by 4%. LinkedIn announced that it would cut 6% of its staff (Wednesday) due to falling demand for its recruitment service. Twitter added users but saw ad revenues fall (Friday)
- Microsoft reporting higher revenues (Thursday) although profit margins took a bit of a hit due to the company investing more money in its cloud computing capacity. Microsoft and Slack are now engaged in a lawsuit (Thursday) as Slack says that that Microsoft unfairly bundles its rival Teams app with Office 365. It alleges that Microsoft is “force-installing it for millions, blocking its removal and hiding the true cost to enterprise customers”
- The EU regulators are looking closely at the Google/Fitbit deal (Friday) and want it to make a number of concessions for the $2.1bn acquisition to go ahead otherwise it will engage in a more prolonged investigation
...GLOOM CONTINUED ON THE UK HIGH STREET...
- Tesco is cutting contract cleaners (Wednesday) at 2,000 stores from August 24th as the company tries to reduce costs
- M&S cut 950 jobs (Tuesday), which will mainly affect those working at HQ and middle management
- Ted Baker announced it would cut 25% of its workforce (Monday) as part of its restructuring – but it did do well in online sales (Wednesday)
AND IN "CORONATRENDS" THIS WEEK...
The coronavirus is resulting in a number of ongoing trends (“coronatrends”) as per the following:
- House prices are rising, according to Rightmove (Tuesday) due to pent-up demand (the whole market stopped under lockdown), Rishi Sunak’s recent changes on the stamp duty threshold and (possibly) people being more willing to move to the ‘burbs in order to get more space because they may be working more from home and/or want some home office space
- Secondhand car sales are increasing (Tuesday) to the extent that car dealers are buying from individuals in order to keep up with demand. Demand is particularly strong for cars priced under £5,000 – presumably because people are buying a “commuter” vehicle due to the increased desire to avoid public transport…
- …which is having repercussions on bus companies like Stagecoach, which is planning job cuts (Thursday) due to the market continuing to be dire – something mentioned by rival FirstGroup recently
- Kingfisher is also benefiting from lockdown DIY (Thursday). It’s all good now, but the company (which owns B&Q and Screwfix) is unclear as to what will happen for the full year
- It turns out that some people (with money!) have been killing the lockdown boredom by indulging in a bit of online trading (Friday) or buying incredibly expensive stuff from the likes of Sotheby’s and Christie’s (Friday)!
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates: watch this space!
My favourite “AND FINALLY…” stories of this week chronicled delivery shenanigans in Delivery driver leaves man in tears with note on where to find ‘hidden’ parcel (The Mirror, Luke Matthews) and how to make the ever-popular garlic and herb dip you get from Domino’s in Man shares simple replica recipe for Domino’s famous Garlic and Herb dip (The Mirror, Paige Holland). Actually, I made this for my kids on Friday night when we had shop-bought pizza – and it worked really well!