Watson’s Weekly 27-08-2018

 …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. 

• Tariffs garnered more headlines this week as the US announced its latest tariff attack on China (Wednesday), with the latest round covering 279 products (mainly chemicals and electronic parts) worth about $16bn, bringing the grand total of Chinese products covered by new duties to $50bn so far. China retaliated (Friday) with imposing 25% taxes on $16bn of US imports but notably left oil off the list as it is a big user.
• There was quite a lot of needle going around this week what with the US reimposing economic sanctions on Iran (Tuesday) and Saudi Arabia slamming Canada (Thursday) for criticising its arrest of an activist. It decided to show its displeasure via its central bank and state pension funds ordering their overseas asset managers to sell their Canadian equities, bonds and cash holdings “no matter the cost”, amongst a whole host of other things.
• The Japanese economy managed to return to the growth track (Friday) which should help PM Shinzo Abe get elected for another term next month, but Turkey and its currency continued to suffer (Friday) as President Erdogan continues to resist pressure to let his central bank raise rates which would help to arrest the precipitous slide of the lira.

Lorem ipsum dolor sit amet, consectetuer adipiscing elit….

• …as House of Fraser laboured under a cloud (Friday) only to be bought by Sports Direct for £90m right at the last minute!
• Homebase announced that 60 of its 249 stores are to close (Thursday) as part of a company voluntary agreement to be announced next week with over 1,000 jobs hanging in the balance
• TopShop lost its China online trading partner (Friday) putting a dent in its China ambitions
• …but on the plus side, Ikea announced the opening of its first store in India (Friday) with others to follow. India is likely to be a tricky market for the company, but I think that if it is successful in attracting new local suppliers it could use them to supply shops in other countries and increase margins elsewhere. I suspect that margins in India will be very low.

• …as it all kicked off this week when Tesla founder Elon Musk tweeted “Am considering taking Tesla private at $420. Funding secured” (Wednesday, Thursday – but the tweet was at the beginning of the week). The stock rallied, but not to $420 as the market remained sceptical about whether he’d follow through with it. The SEC is looking into whether his claim of “funding secured” is actually true (and if it isn’t, he’ll probably have to face fines and lawsuits) but, from his side, it seems that no final decisions have been made. I think he should stay public as it keeps him from doing anything REALLY stupid and investors have thus far been a very generous source of cash when called upon – a generosity which might not be quite the same under a private owner. Just ask Travis Kalanick, the founder of Uber who was kicked out of the top job by the company’s biggest investors.

I have two faves from this week’s “…and finally” stories: Ed Balls tasered: Former Shadow Chancellor stunned in shock police video – watch here (Daily Express, Rory O’Connor) and Grandfather uses 11 smartphones attached to a bicycle to play Pokemon Go (Metro, Jimmy Nsubuga ), which is a thing of genius. On a serious note, I recommend that you watch the BBC2 documentary that Ed Balls is presenting – it’s a real eye-opener and he does a great job! 

Have a great weekend!