Watson’s Weekly 25-10-2025

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 COLOURED HIGHLIGHT 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 WAR NEWS…

• Trump started the week by bullying president Zelenskyy into ceding to Russia’s demands, but Trump and Putin cancelled the suggested meeting in Budapest to talk peace. In the meantime, European countries tried to support Zelenskyy by talking about using frozen Russian assets to finance its defence but Belgium objected because it didn’t want to be left carrying the can if Russia came after the assets. Russia launched massive missile and drone strikes on Kyiv and other Ukrainian cities.

IN DEFENCE NEWS…

• Trump signalled his strong backing for the Aukus agreement that was originally made by Biden with the UK and Australia.

IN TRUMP THINGS…

• Huge crowds gathered in anti-Trump “No Kings” protests across the US. Trump dismissed them and House Speaker Mike Johnson branded them as a “Hate America rally”.
• Trump pardoned the founder of Binance, Changpeng Zhao, who had been handed a very short prison sentence in 2023 for failing to stop money laundering. It’ll certainly be useful for Trump to have a major crypto bro indebted to him. Will Sam Bankman-Fried be next, I wonder??

IN INDIVIDUAL COUNTRY NEWS…

• IN CHINA – the economy expanded at its slowest pace in a year at 4.8% on an annualised basis in Q3 versus a 5.2% increase in Q2. The official year-end GDP target is “about 5%” so it’s still in the ballpark. Ongoing gloom in the real estate sector continues to be a drag on consumer sentiment. This certainly gives China’s leaders food for thought for their next five year plan for 2026-2030.
• IN JAPAN – Sanae Takaichi became Japan’s first ever female prime minister. She then appointed a cabinet that contained the country’s first female finance minister and three of the four ministers who had run against her in her party’s leadership election earlier this month. Good luck to her!
• IN FRANCE – there was more scandal this week as some jewellery was taken from the Louvre in a daring heist. No-one was found and it wasn’t insured!
• IN THE UK – inflation was expected to hit a two-year high but, in fact, it stuck at 3.8% for the third month in a row. This is quite handy for the chancellor because it makes it a bit more likely that the Bank of England will cut interest rates earlier than expected and we also heard that the UK’s borrowing costs, as measured by the yield on 10-year bonds, have fallen to an 11-month low. Talking of the chancellor, Reeves promised to launch a “blitz on business bureaucracy” that could save firms £6bn but she created a kerfuffle by floating the idea of taking away the NIC exemptions that apply to Limited Liability Partnerships (LLPs) to raise money in next month’s Budget. Lawyers and accountants were particularly disgruntled by the prospect. Betfred also got defensive as it responded to the prospect of the gambling industry being targeted by a gambling tax. Speculation about what the Budget continued as energy secretary Ed Miliband floated the idea of cutting VAT from household energy bills.

IN COMMODITIES NEWS…

• IN OIL NEWS – Trump created a bit of a stir by imposing sanctions on the two biggest oil companies in Russia – Rosneft and Lukoil – in an effort to “degrade” Putin’s ability to finance his war machine. This is the first time that the administration has implemented such measures and it prompted big buyers of Russian crude – China and India – to dial down their orders because they don’t want to get hit by secondary sanctions. The oil price jumped as a result and the FTSE100 hit a new high.
• IN RARE EARTHS – China reigns supreme in rare earths and the US and China continue to battle it out as the US scrambles to support non-Chinese producers. Australian companies, including Arafura rare earths are benefiting and the Trump administration this week signed an agreement at the White House with Aussie PM Anthony Albanese for the US and Australia to invest around $1bn in the next few months to create a rare earth and critical mineral supply chain that doesn’t involve China.
• IN OTHER COMMODITIES – prolonged high cocoa prices have prompted companies like McVitie’s to change their recipes to contain less cocoa. They’ve had to reduce quantities so much that Club and Penguin biscuits can’t be called “chocolate biscuits” any more – they are now “chocolate flavour” biscuits because they now contain more palm oil and shea oil than cocoa!

IN ENERGY NEWS…

• IN BATTERIES – Tesla continues to dominate the mega battery market in the UK. It currently supplies large-scale batteries to plant developers but also trades the power they generate using its Autobidder trading software. I think that this is an industry that is only going to grow from here…
• IN NUCLEAR – the US is offering energy companies access to nuclear waste from cold war-era warheads that can be converted into fuel for advanced reactors as an alternative to sourcing nuclear material from Russia. This just goes to show how keen everyone is to change supply chains away from Russia (and China).
• IN WIND – BP has decided to ditch plans for a major US offshore wind farm, blaming the White House’s aversion to wind power. I would have thought that, as long as Trump’s administration is in power, US is a no-go for wind. This also plays into BP’s agenda on bringing the focus back onto fossil fuels.

IN CRYPTO NEWS…

• BlackRock launched its first bitcoin ETF in Britain. Investors will, via this product, be able to get exposure to bitcoin without actually having to buy it.
• The FCA has filed a lawsuit against HTX, the crypto exchange linked to expensive-banana-eater Justin Sun, in the High Court. It is bringing the case “for unlawfully promoting cryptoasset services to UK consumers in breach of the UK’s financial promotions regime”. It will be the first time that the FCA has taken action against a crypto company.

IN INVESTMENT NEWS…

• Pension giants are putting £3bn into UK private markets. Legal & General, NEST and Australian Super (Australia’s biggest pension fund) have announced separate commitments to invest £3bn in rental homes, infrastructure and fast-growing companies.
• IN M&A – Blackstone and TPG announced that they are taking over healthcare tech firm Hologic in a deal worth $18.3bn. Hologic sells diagnostic services that test for diseases including breast cancer.
• IN IPO NEWS – Shawbrook is looking at a potential valuation of £2bn when it floats on the LSE. Final pricing will be announced on October 30th and the company will use the money raised to buy out competitors. Meanwhile, tinned tuna company Princes Group has set a modest target valuation for its imminent IPO.
• IN MEME STOCKS NEWS – Beyond Meat shares boomed by 1,300% in under a week thanks to being the latest meme-stock that investors are ploughing into. It has become the most traded stock on Wall Street following interest from traders on “wallstreetbets”, a Reddit forum. Here we go again!

IN FINANCIALS NEWS…

• IN BANKS – Lloyds Banking Group saw its profits fall by 36% as its exposure to the car financing scandal hit took a big bite out of its quarterly earnings.
• IN PRIVATE CREDIT – concerns continue to build re private credit, particularly as banks have become more exposed to this area of financing. We’ve been hearing more warnings from bank heads and central finance chiefs about it and if things start to crack, there could be some serious implications on global markets and economies.

IN CONSUMER TRENDS…

• IN THE US – higher tariffs are leading to empty shelves and higher prices for ordinary Americans and a study conducted by S&P Global estimated that two-thirds of higher costs to corporates will be passed on to consumers. Separately, research from VantageScore shows that the share of US car loan borrowers falling behind on their debt has jumped to levels last seen during the financial crisis. This is serious because Americans rely heavily on their cars and so it’s the last thing they would want to default on.
• IN THE UK – inflation stuck at 3.8%, which surprised the markets and provided a potentially useful bit of good news for the chancellor in that it means it’s more likely that interest rates may get cut a bit earlier than expected (cuts help sentiment). On the downside, UK borrowing hit a five-year high for September, consumers continue to be nervous about the Budget – and that’s contributing to more profit warnings as well as the lack of the usual housing market bounce at this time of year, while stubbornly high prices of butter, milk, beef, chocolate and coffee put pressure on household budgets making dining out more difficult to afford which could be contributing to sluggish wage growth in the retail and hospitality sectors. Having said all that, the latest study from GfK reflects a rise in consumer confidence ahead of Black Friday. Reeves looks likely to blame Brexit for tax rises in the upcoming Budget and there are rumours that she’s going to target LLPs, which currently get NIC exemptions for partners. Given that the top 1% of UK taxpayers pay 33% of all the tax collected by the government, she’s going to have to tread carefully and, given all this concern by the more affluent, it’s perhaps unsurprising to hear that the likes of St James’s Place, Schroders and AJ Bell are seeing big fund inflows.
• IN CONSTRUCTION/PROPERTY – Housing Secretary Steve Reed and London mayor Sadiq Khan made a joint statement this week outlining looser new planning rules to help housebuilding in London and it seems that the FCA’s loosened borrowing conditions are showing real signs of making it easier for first-time buyers to get a foot on the housing ladder.

IN RETAIL NEWS…

• IN LUXURY – Kering’s new CEO has committed to focus on fashion, selling its beauty business to L’Oréal for €4bn. The company also announced Q3 results which showed that the revenue decline is slowing down after a tricky two years. It feels like luxury is staging a bit of a turnaround at the moment…
• At the other end of the scale, B&M kicked out its finance chief because of a £7m accounting error. The announcement came at the same time as the company announced its second profit warning in two weeks! All of this has hit its full-year projections and investors gave the share price another good kicking…

IN CONSUMER GOODS NEWS…

• Mattel announced an OK Q3 but the company has got enough confidence in how things will go in Q4 that it kept its full year numbers unchanged.
• Fresh from announcing the €4bn Kering deal, L’Oréal’s CEO made cautiously positive noises about the all-important Chinese market staging a turnaround. This is good news given how important the market is.
• Adidas raised its annual profit targets thanks to strong demand for its retro trainers and a smaller-than-expected impact from US tariffs.
• Oatly continues to suffer as it has found it hard to sustain its stellar growth rates as consumers have favoured products that are high in protein rather over those that have a lower environmental impact. Its share price has collapsed by 97% since it floated to great fanfare back in 2021!
• SlimFast’s European arm was sold to Manchester-based consumer  company Supreme. SlimFast has, unsurprisingly, suffered from the success of weight-loss jabs.
• Heineken saw its sales hit by falling global demand for beer and it downgraded its sales forecasts.

IN LEISURE NEWS…

• DC London Pie, which owned the UK Pizza Hut franchise, appointed the administrators at the beginning of the week and Yum! Brands, which owns the global franchise, bought out the UK restaurant operation in a pre-pack administration deal. 64 sites and 1,277 jobs will be saved but 68 other sites and 1,200 jobs won’t. It’ll be interesting to see what the new owners have planned.

IN TECH NEWS…

• Apple’s latest iPhone iteration has prompted the company’s strongest growth in smartphone sales since the pandemic, pushing its share price to record highs but it lost the landmark class action lawsuit in the UK which could potentially lead to a £1.5bn compensation payout, equating to about £75 per customer. A London court ruled that Apple had abused its dominant position in the market by charging excessively high commissions on its App Store.
• The Competition and Markets Authority is going to apply stricter rules on Apple and Google regarding how they run their mobile platforms because they have been designated as having “strategic market status” (SMS) under new digital laws that came into force this year.
• Amazon had a major services outage which affected over 2,000 companies around the world. It came back up but it highlighted just how much so many companies rely on so few service providers.
• European defence companies Airbus, Thales and Leonardo confirmed this week that they would merge their struggling satellite divisions in an effort to take on Elon Musk’s Starlink in an initiative called “Project Bromo”. They’ve got a mountain to climb but good luck to ’em!
• Scientists have invented an eye implant to help blind patients see again. Science Corporation is the US company that makes the device and it has applied for clinical use authorisation for the product in the US and Europe.
• IN AI – OpenAI launched its own web browser called Atlas, taking on the giants in this area – Google and Microsoft – while Anthropic announced that its chatbot, Claude, is being tailored towards the needs of researchers and life sciences companies by integrating it with tools that the scientists already use. Anthropic said that Novo Nordisk has already used its AI model to reduce clinical study documentation from over 10 weeks to just 10 minutes! Reddit is suing Perplexity for scraping its data, criminal usage of AI to commit fraud is rising and it turns out that unicorn AI start-up Synthesia has fended off a $3bn takeover bid from Adobe.
• IN QUANTUM – the Trump administration is getting increasingly interested in taking equity stakes in a number of quantum computing companies like IonQ, Rigetti Computing and D-Wave Quantum as it wants to stay on the cutting edge. Google claimed this week that it had made a breakthrough with an algorithm that it believes could open up new techniques in drug discovery and the development of new materials. Google said that this demonstrates “quantum advantage”, the point at which quantum systems clearly outperform traditional computers.
• IN CHIPS – Anthropic and Google Cloud struck a massive AI chips deal, but didn’t reveal how massive! It involves Anthropic securing access to 1m Google Cloud chips to train and run its AI models. Meanwhile, Intel announced that it had put in a decent Q3 performance, showing that the company’s turnaround efforts seem to be taking effect. Intel is a specialist in CPUs rather than GPUs – and it’s the GPUs that are getting all the love at the moment because these are the ones that power AI training and have powered the likes of Nvidia to heady heights. This is why Intel has got left behind. However, it is thought that once more AI models get trained up, AI companies will need to buy a lot more CPUs – which should benefit Intel.
• IN DATA CENTRES – data centre start-up Crusoe has managed to more than triple its valuation to over $10bn in one year after its latest funding round, where it attracted $1.4bn. Crusoe is building OpenAI’s first big data centre in the US. The frenzy continues…

IN MEDIA NEWS…

• Warner Bros Discovery said that it has been on the receiving end of takeover bids, so it’s thinking about what to do next. Netflix has been rumoured to be a potential bidder…
• Talking of Netflix, the streamer saw share price weakness despite revenues rising by 17.2% year-on-year in Q3 because a dispute with Brazilian tax authorities took the edge off its profits. Revenues rose thanks to a combination of membership growth, higher pricing and an improved performance in advertising.

IN TRAD CAR NEWS…

• GM lifted its financial forecasts for the full year whilst cutting its previous estimates on tariff impact. This is good, but it still sounds like US consumers are facing a delayed inflationary impact so we’ll have to see how that translates into car sales…
• Ford outperformed market expectations thanks to Americans spending more on its pickups and SUVs over Q3. It is now set to benefit from tariff relief on imported parts and a “meaningful reduction” in federal emissions regulations that mean it’ll be able to sell more trucks and SUVs.
• UK car production fell by 36% thanks to the JLR cyber attack, according to the latest stats from the SMMT.
• Volvo and VW are voicing concerns about the repercussions of the tussle between China and the Netherlands over control of chipmaker Nexperia. The car manufacturers have warned that there could be temporary plant shutdowns in Europe as a result.

IN EV NEWS…

• Tesla profits fell by over 25% as it took a hit on increased costs from US tariffs, the loss of emissions credit revenue and the costs involved in its pivot to robotics and AI.
• Rivian laid off about 4.5% of the workforce in an effort to cut costs ahead of an expected drop in EV sales. This was in addition to previous layoffs.

• IN PHARMACEUTICALS – GSK’s new blood cancer drug got approval by the FDA. The company reckons that Blenrep could rake in at least £3bn in peak year sales.

My fave video this week was the one that made me feel nostalgic for my early days learning Japanese!