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 BIG PICTURE NEWS...
- Inflationary pressures continue to build in the US, Europe and UK (Thursday) as the latest IHS Markit PMI figures show near-record increases in business activity. On a more granular level, a Lloyds Bank survey showed that businesses in all 14 sectors of the economy are raising prices at the sharpest rate for 22 years (Monday) and that 11 out of 15 sectors posted faster output growth month-on-month in May versus 9 in the previous month; the CBI’s quarterly manufacturing survey showed that British industrial output grew at record rate in June (Wednesday) and the latest ONS data shows that UK economy’s rebound is proving to be better than expected (Wednesday) while business confidence hits new highs (Thursday) according to a survey by the Institute of Directors. The Bank of England kept interest rates unchanged (Friday) whilst also increasing their year-end inflation target. President Biden outlined a new $1bn infrastructure plan (Friday), but there’s not that much detail in it and it’s still got a way to go yet before it gets full approval, so don’t too excited just yet!
- In CRYPTOCURRENCY NEWS, China continued its crackdown on Bitcoin (Monday), sending its price down (Wednesday). It also turns out that Monero is emerging as the criminals’ cryptocurrency of choice (Wednesday) as it is even harder to trace than Bitcoin!
- In ENVIRONMENT NEWS, there was an interesting article reminding us that there is still a decent chunk of global electricity being generated by coal (Thursday), but on the positive side, Lego has come up with a new eco-friendly brick (Thursday), which will undoubtedly help its environment credentials! It’s also interesting to see that Volvo is going to be teaming up with Northvolt to make a gigafactory (Tuesday) and Cornish Lithium’s valuation has doubled (Tuesday), following a fundraising. Go Cornwall!
CONSUMERS SEE HOUSE PRICES RISE, RETAILERS EVOLVE AND CHANGES IN THE JOB MARKET...
- House prices in the US and Europe hit record levels (Wednesday) and although they grew in the UK, they lost some momentum (Monday).
- Joules saw its sales hit record levels (Thursday) in its latest set of results thanks to the success of its online business. Meanwhile, John Lewis is trying its hand at furniture rental (Thursday) in another attempt to diversify its business. Will it actually work or is this just the sign of a non-retailer boss clutching at straws??
- In JOBS NEWS, US jobless claims are falling (Friday), UK employers are experiencing shortages and want help with the shortfall (Monday, Friday) and the grumblings about working-from-home are getting louder (Tuesday). Deutsche wants juniors back in the office (Monday), JP Morgan wants more of its staff to get jabs (Friday) and qualified lawyers are seeing a rise in demand from US law firms (Monday) who are offering some very nice salaries to tempt them. It’s also interesting/concerning to see that employers in Greece are finding it hard to fill roles (Tuesday), especially in the tourism sector which accounts for about 20% of the country’s GDP. It’s particularly concerning given that Greece has the highest unemployment rate in the EU at a whopping 16.5%, but lockdown uncertainty is prompting people to stay out of this key sector.
SOME CORONATRENDS CONTINUE AND MORE POST-CORONATRENDS EMERGE...
- Lockdown has seen the emergence of all sorts of trends, some of which are likely to continue as we move towards emerging from the pandemic. More millionaires were created under lockdown (Wednesday), mainly due to strengthening stock markets and residential property prices while Microsoft wants to boost the momentum of Teams (Friday) by giving it a more prominent position in its next iteration of Windows. Burgeoning e-commerce and an increased willingness to hold inventory continues to power warehousing (Tuesday) and although DIY became a Big Thing under lockdown, timber prices have come off their peaks (Monday) and DIY store share prices have taken a beating (Tuesday) as some investors have decided to take profits/believe that momentum is fading in the sector.
- Casinos had a terrible time of it under lockdown, but they could well stage a comeback as new mega-casino Resorts World opened in Las Vegas (Wednesday). I am sure that the prospect of the first big new casino for over ten years will bring a lot of renewed interest in the Strip and that there will be a lot of pent-up demand for all casinos to enjoy.
THERE WERE SOME INTERESTING DEVELOPMENTS IN THE WORLD OF FINANCIALS THIS WEEK...
- US banks look poised to re-start share buy-backs and dividend payments (Friday) because they passed the Fed’s stress tests, showing that they’ve got quite a lot of excess cash sloshing around (which they’ve been itching to do something with rather than leave it lying there doing nothing).
- Elsewhere, Vanguard wants to expand in giving out financial advice (Friday) and reckons it can lower prices, Visa announced the acquisition of Swedish fintech Tink for €1.8bn (Friday) to improve its open banking capabilities and Wise (formerly known as Transferwise) is pushing for an IPO via a direct listing (Friday). China’s Ant Group got closer to moving off the naughty step by making moves to share data (Thursday) with some Chinese-owned state enterprises to build a credit-scoring company.
...THEN IN M&A AND IPO STORIES THIS WEEK...
- In M&A NEWS this week, Morrisons rejected an unsolicited takeover offer (Monday) and major shareholder Legal & General said that it was too low to be taken seriously (Tuesday), meaning that private equity firm Clayton, Dubilier & Rice have now got until July 17th to make another offer under current takeover rules. Elsewhere, Tractor firm CNH Industrial offered $2.1bn to buy agriculture technology company Raven Industries (Tuesday) to narrow the gap with market leader John Deere while Axiata and Telenor announced a merger of their Malaysian mobile groups in a $12bn deal (Tuesday) to create a major player in the digital services space.
- In IPO NEWS, Victorian Plumbing had a good market debut on AIM this week (Wednesday) and a number of companies are planning imminent flotations as well. Soho House (Tuesday) and Krispy Kreme (Wednesday) are planning on New York listings, although some are saying that Krispy Kreme is looking at a very full valuation (Thursday) while Chinese ride-hailer Didi has announced a valuation for its forthcoming IPO (Friday), the proceeds of which will be used to develop technology, grow outside China and launch new products.
AND IN UPDATES FOR WATSON'S YEARLY...
- Watson’s Yearly updates: These will be left until the next edition of Watson’s Yearly that will be published shortly