Watson’s Weekly 26-02-2022

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.

Russia invaded Ukraine. This is the biggest story. However, here are some more events/developments in world economies…

• Putin launched his attack and demanded Ukraine surrender (Thursday) in what could be the biggest conflict in Europe since WW2. Oil prices rose, stock markets fell and Moscow closed the stock exchange. Russia’s central bank supported the ruble. The invasion was widely condemned but world leaders were divided on whether to eject Russia from the SWIFT payment system (Friday).
• In the UK – business activity increased (Tuesday) and BoJo lifted Covid restrictions (Tuesday). He did it without putting any other guidance in place, meaning that there’s likely to be increased employer liability risk (Tuesday) further down the line regarding unfair treatment/putting workers at risk etc. A City “Big Bang” is being discussed in earnest (Tuesday) to “liberate” the UK from European rules post-Brexit. It sounds like this could free up capital that could be invested elsewhere, but we’ll have to wait for specifics. Meanwhile, a third consecutive UK interest rate rise could be on the cards (Tuesday), although I do wonder whether the situation in Ukraine could give cause to delay this.
• In COMMODITIES – oil prices have massively benefitted the oil supermajors (Monday) and, because of the current Russia/Ukraine situation they’ve breached $100 a barrel for the first time since 2014, which is also having a knock-on effect on petrol prices (Tuesday). High energy prices are having unusual effects on price comparison websites like MoneySupermarket and GoCompare (Monday) as there aren’t any cheap deals to offer!

• American consumers are increasingly seeking out experiences (Friday), meaning that things like theme parks are doing particularly well right now.
• In the UK – consumer confidence is draining away (Friday) and even the wealthy are showing signs of reining things in (Friday) as wealth manager St James’s Place is seeing a slowdown in funds inflow. For the rest of us, energy bills are heading towards epic levels (Friday) but we’re all having a beer (Friday), according to Anheuser-Busch InBev, the world’s biggest brewer. Residential property prices continue to rise (Monday) and it’s interesting to note that, in commercial property, Canary Wharf Group is offering a more flexible office service (Monday), which will just give the likes of WeWork etc. more competition in this space.

• Stellantis made a ton of money (Thursday) despite chip shortages, while flotations are being mooted by Porsche (Wednesday) and Lotus (Monday). Aston Martin is getting more optimistic (Thursday) but Mini has had to cut production (Thursday) as semiconductors were prioritised for more profitable vehicles.
• In terms of batteries, Tesla is reverting to old tech (Wednesday) due to the massive rise in raw materials prices. It’ll be using iron-based batteries that aren’t as powerful, although one advantage is that they’re less likely to catch fire.

• Klarna announced a reward programme (Tuesday), which is controversial because it is, effectively, rewarding people for getting into debt.
• Strong deal flow benefited Barclays hugely (Thursday) but small and mid-cap UK specialist broker Peel Hunt said it’s seeing a slowdown (Thursday) as corporates are holding back on flotations and M&A due to concerns about the economy and the Ukraine situation.

• Meta continues to push Reels (Wednesday) as short-form video continues to power engagement.
• Apple had mixed news this week as US lawmakers are looking at app store charges (Monday) on the one hand but there’s good news for hands-free fans as the company combined with Google, Apple and Samsung to have a common language for smart-home tech (Monday) called Matter. It’ll be rolling out this year and will mean that you will be able to speak across all devices, which could hasten development of the much-vaunted Internet Of Things, which hasn’t really taken off as much as the tech companies hoped in the past.
• Chinese edu-tech company New Oriental got hammered (Wednesday) as the online education company announced massive losses following the whole clampdown on edu-tech by Chinese authorities.
• Donald Trump’s Twitter alternative, Truth Social launched this week (Tuesday), but had a bumpy start as huge numbers of users tried to sign up.

• There’s potentially a massive scandal brewing at Peloton (Wednesday) as allegations have come to light that the company was selling rusty bikes at premium prices and offering a no-returns policy. It’s not a story that’s caught on particularly, but the FT has cited some pretty damning evidence…
• In PHARMACEUTICALS – AstraZeneca is a step closer to launching a new breast cancer treatment that could replace chemotherapy (Tuesday) and Moderna thinks that the pandemic will “end” this year (Friday), adding that its additional seasonal booster will be needed for the over-50s and vulnerable.
• In SIGNS OF RECOVERY – InterContinental Hotels Group is seeing business heading towards pre-pandemic levels (Wednesday), Heathrow is expecting a major pick-up in business in the summer (Thursday) and advertising giant WPP continues to see its business grow (Friday).
• In CRYPTO – Coinbase had a stellar Q4 (Friday) as crypto trading volumes boomed more than the market expected but I would have thought that current geopolitical events may have a negative impact in future quarters.

• Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 

In a very very terrible week, I thought that THIS VIDEO gives us welcome respite for a minute or so. If you’ve never seen a dog ordering a pizza before, click on the link and get involved 👍.