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.
BIDEN'S STIMULUS IS PROGRESSING, BOLSONARO FRUSTRATES, BOJO ANNOUNCES THE PATH TO FREEDOM...
- The House of Representatives passed a comprehensive $1.9tn stimulus package on Friday in the first of a series of hurdles to get full clearance and enshrine it all in law. The House is controlled by Democrats, but the stimulus needs to get approval by the Senate as well (where the Democrats only have a wafer-thin majority) and the clock is running down as the Democrats have given themselves a mid-March deadline to get everything through. This will be the second-biggest stimulus package ever (last year’s Care Act was $2.2tn). Measures include a gradual increase of the federal minimum wage over five years, $1,400 direct payments, an extension of unemployment insurance and $350bn for state and local governments.
- News from Brazil freaked out investors after President Bolsonaro sacked the chief exec of Petrobras (Wednesday) who many thought was doing a decent job at the scandal-ridden state-controlled oil company. The sacking occurred as the two disagreed over subsidising petrol and diesel prices (truckers have been complaining about high prices) as Bolsonaro wants to introduce them. This is a questionable vote-winning tactic that costs a great deal of money to implement. Petrobras’ chief exec was replaced by a puppet military general with zero experience, presumably so that Bolsonaro can push him around. Funnily enough, there are elections next year…
- Boris Johnson outlined a roadmap to freedom at the beginning of the week (Tuesday) and although there are expectations of a great recovery when everyone is released from their domestic prisons (Thursday), there are various things that could hold the economy back (Wednesday)
- In Bitcoin news, the cryptocurrency headed towards $60,000 over the weekend, but then came back (Tuesday) and ended the week nearer $45,000. As usual, no-one really knows why 🤷♀️
- Those pesky WallStreetBets/Reddit traders are at it again as trading in GameStop shares was suspended (Thursday) because the price more than doubled mainly in the last hour and then it continued again the next day (Friday). I think that trading in this stock is extremely dangerous as it just isn’t based on any fundamentals. It seems to me that you just have to be in the right chat room at the right time and listen to the right people. I really hope that regulators crack down on this because a lot of people are going to get burned.
IPOs, M&A AND SPACS WERE THE ORDER OF THE WEEK...
- There was a lot of M&A activity this week, what with US regional bank M&T Bank buying People’s United Financial in a $7.6bn deal (Tuesday), Goodyear buying rival Cooper Tire for $2.8bn (Tuesday), LVMH buying a 50% of Jay-Z’s Armand de Brignac champagne company (Tuesday), Allied Universal Security Services buying G4S (Tuesday), not to mention Estée Lauder buying a majority stake in Deciem (Wednesday) and British insurer Aviva selling its French business for €3.2bn (Wednesday).
- IPOs took up headlines as well this week with Swedish alt-milk brand Oatly aiming for a US stock market listing (Wednesday) that could give it an implied valuation of $10bn. Then there were companies that declared that they were going down the SPAC listing route. Joby Aviation has plans to list via a SPAC (Thursday) as does Lucid Motors (Wednesday), but I have to say that I think they are companies that could ONLY be listed via a SPAC because they just don’t seem to have enough substance at the moment.
THERE WAS MORE EV DRAMA CULMINATING IN A HYUNDAI RECALL...
- Electric bus start-up Arrival announced it would start road-testing in the UK in Autumn (Monday), which sounds great but I do wonder who is going to buy these buses given that most transport companies have been decimated by the pandemic! It will be listing via a SPAC in New York.
- After last week’s earnest declarations by car manufacturers about going 100% electric, there was an interesting article about there being a need to sort out their supplies of raw materials like graphite, lithium and cobalt (Monday). After all, if you don’t have the ingredients, you can’t bake a cake!
- Hyundai announced a massive recall of 82,000 vehicles (Thursday) because of the danger of spontaneously combusting batteries! Not great for them and it might give potential buyers another reason to avoid electric for now.
...AND IN MISCELLANEOUS DEVELOPMENTS...
- It was a bad week for Uber. First of all, the UK’s Supreme Court decided it should classify its drivers as workers and not contractors (Monday), then the EU decided to launch their own review (Thursday) and then, to make things even worse, the rival that essentially drove Uber out of China, Didi Chuxing, announced plans to expand in Europe (Thursday), making an already competitive market even more competitive!
- In banks news, HSBC announced plans to move key execs to Hong Kong (Monday) and to cut office space in London (Wednesday). Lloyds also announced it was going to cut office space by 20% (Thursday)
- There was a bit of a kerfuffle in social media as Microsoft backed paying news publishers for content (Tuesday) and Facebook decided to pay publishers in Australia after all (Tuesday) after pulling content for a few days. Some are suggesting that Facebook’s about-turn will embolden others (Wednesday). Also, India decided to impose new rules to make social media platforms more accountable (Friday), pretty much saying that it will intervene in anything it doesn’t like. Elsewhere in social media, Snap targets ad growth (Thursday)
- In retail, ministers are talking about how to implement an online tax (Wednesday), which isn’t as black-and-white as you’d think and John Lewis is keeping more stores closed when lockdown lifts (Monday)
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
I thought I’d leave you this week with the amusing prank in Woman shares dad’s furious meltdown as she sneakily messes with his Alexa volume (The Mirror, Courtney Pochin). Will you be giving this a try??