Watson’s Weekly 29-11-2025

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…

• The US and Ukraine made some incremental progress on peace, then the 28-point plan that was originally touted by the Americans got whittled down to a 19 point plan and Trump sent an envoy to Russia to further hammer things out. The process is ongoing.

IN DEFENCE…

• It turns out that Chinese exporters of equipment that has potential military use are doing very well out of the Ukraine war because the sanctions are jacking up prices and the Russians are still paying for it anyway. As one senior sanctions official put it, Chinese companies ripping off the Russians was a “pretty good outcome, If you increase the price of a good by 80%, you nearly halve what they can actually buy”.
• Countries in the European Space Agency (ESA) have agreed to finance a programme that will fulfil military and civil requirements for the next three years. The programme was originally intended for “peaceful purposes” but it’s now been expanded for the first time to include military purposes.

IN TRUMP-RELATED MATTERS…

• It was a bad week for Trump in the courts. A US Federal judge threw out charges against former FBI chief James Comey and Attorney-General Letitia James. The DoJ will appeal the decision.
• The Trump administration has negotiated a 71% discount for Novo Nordisk’s weight-loss Ozempic and Wegovy drugs for patients who are in Medicare, the federal health insurance programme for the elderly. A 30-day supply of the drugs will cost $274 versus the original $959. This price reduction won’t come into force until 2027, though.
• European business schools are benefitting from would-be students getting freaked out by Trump’s clampdown on universities as well as changes to policy regarding student and work visas for foreigners. They are seeking alternative destinations and applications to US institutions have already fallen.

IN INDIVIDUAL COUNTRY NEWS…

• IN CANADA – PM Mark Carney agreed to build a 1,100km long pipeline project to carry the equivalent of a million barrels of oil a day from its northern oil sands region to Canada’s west coast that will facilitate its oil exports to Asia. On the one hand, it’s trying to wean itself off supplying America, given the current frosty relations between the two countries but, on the other, environmentalists are incensed. At the moment, Canada supplies about 60% of America’s oil imports.
• IN JAPAN – PM Takaichi got a call from Trump after he spoke to Xi. Apparently, Trump had requested the call, which “provided an explanation of the recent state of US-China relations” and covered views on how to bolster the Japan-US alliance.
• IN THE UK – Rachel Reeves announced her second-ever Budget that everyone had been dreading. She even requested banks to be nice about it beforehand in exchange for not slapping another windfall tax on them. Overall, “winners” were low-paid workers and the unemployed because of the boost in spend on welfare. The Budget was good for public finances because the chancellor increased her “fiscal headroom”. However, all of this is going to be paid for by companies, entrepreneurs, owners of expensive houses and landlords – but mostly via “working people” who will increasingly be caught up in the frozen tax thresholds. The new gambling tax will hit the gambling industry hard while the new tourist tax was not greeted with glee by the hospitality industry. The government climbed down from the push for “day one” workers but got a compromise by getting the current qualifying period for unfair dismissal protection cut from the current two years to six months.

IN COMMODITIES NEWS…

• IN OIL – analysts at JPMorgan reckon that oil prices will fall to their lowest levels for twenty years – excluding the pandemic – thanks to oversupply from OPEC. It could get particularly bad if oil demand from China plunges due to the increasing take-up of EVs.
• According to research from Offshore Energies UK, North Sea operators are going to spend more on demolishing disused oil and gas platforms than on investing in new ones. The cost of decommissioning them has shot up while the government’s 78% tax on offshore profits and Ed Miliband’s ban on new oil and gas fields have combined to put operators off investment. That being said, we heard that the government has decided to let oil and gas drillers develop new fields next to existing ones – which simultaneously allows them to say that they’re not abandoning their manifesto promises whilst also making sure that oil and gas flow continues!

IN CRYPTO NEWS…

• Crypto hoarders like Strategy, Metaplanet and The Smarter Web Company have been dumping their holdings as the “digital asset treasury” business continues to unravel. Companies that borrowed money to buy bitcoin are feeling the squeeze particularly acutely because they are having to sell their bitcoin to service their debts, which is pushing the price down even further!
• S&P Global Ratings downgraded Tether’s assets to its lowest rating. Tether runs USDT, which is the world’s biggest stablecoin (a type of digital cash that exists outside the banking system, is pegged to the dollar and mostly backed by high quality securities including US Treasuries). The downgrade was made because the ratings agency deemed that Tether had “limited transparency on reserve management and risk appetite, lack of a robust regulatory framework [and] no asset segregation to protect against the issuer’s insolvency”.
• Binance founder Changpeng Zhao has now been accused of facilitating millions of dollars’ worth of payments to Hamas since its attack on Israel in October 2023. Victims’ families are saying that he knowingly provided “substantial assistance” to groups including Hamas and Hizbollah by helping them to hide the movement of their funds.

IN BUSINESS NEWS/TRENDS…

• US CORPORATE SENTIMENT – the WSJ did some research and found that a lot of American corporates believe that the worst of the Trump tariff impact is now behind them. Tariffs that companies had to pay initially have ended up being lower than expected and new trade agreements have been made since the initial liberation day while companies have become better at taking the edge off higher costs. I would also add that it’s not just the tariffs that have impacted prices, at least some of that has been down to poor harvests pushing up prices of cocoa and coffee beans etc.
• FALLING  ALCOHOL CONSUMPTION – the French government, which is already cash-strapped, is paying farmers to rip up their vines thanks to the a nightmare combination of weaker sales (particularly in China!), Trump tariffs and the worst harvest in 70 years. 20% of French winegrowers are thinking about closing down their businesses, according to a FranceAgriMer report in Le Monde and the government is planning to give farmers €130m to rip out vineyards! This is really serious as the wine industry is one of the three pillars of the French economy, along with aeronautics and luxury goods, so urgent action is required.

IN INVESTMENT NEWS/TRENDS…

• IN M&A – 2025 has been a bumper year for corporate dealmaking, largely thanks to Trump’s more relaxed approach to antitrust regulation. Risk-taking is encouraged and that is resulting in bigger deals! Mind you, it’s not just the volume of deals that has increased – so has value! Deal value has increased by 40% so far this year versus the same period last year and there have been at least double the number of $10m+ deals over the same period.
• Deutsche Börse launched a €5.3bn bid for the Dutch-listed Allfunds platform and is in exclusive talks. It wants to do this to “reduce fragmentation in the European investment fund industry and create a harmonised business with global reach”.
• Puma’s share price shot up by almost 20% on rumours of potential bid interest from the likes of Anta, Li-Ning and Asics. Its recent Q3 results were rubbish and although it’s announced a two-year turnaround plan, it’s clearly become a bid target. We’ll have to wait and see whether anything comes of this!
• IN IPOs – it turns out that the three companies that listed on the London Stock Exchange – Shawbrook, Princes and Beauty Tech – have all seen their share prices fall below their flotation prices! This poor performance isn’t exactly going to get other companies rushing to list themselves. Still, maybe now that the Budget has been announced, perhaps more money will flow into the UK market…

IN FINANCIALS NEWS…

• Revolut now has an implied valuation that means it’s worth more than Barclays, Lloyds Banking Group or NatWest thanks to Nvidia buying a stake in the fintech via its VC arm, NVentures.
• US banks announced UK expansion projects shortly after the Budget was announced. Reeves was taking credit but Goldman Sachs’s Birmingham expansion and JP Morgan’s plans to build a new tower in Canary Wharf had been in the pipeline for ages.

IN EMPLOYMENT NEWS…

• India enacted some major labour reforms this week. 29 former laws were compressed and updated and although they had actually been passed by parliament in 2020, they’ve only just been implemented because of previous objections by opposition parties and trade unions.
• Germany’s biggest arms manufacturer, Rheinmetall, is looking to draw on the pool of workers who’ve been made redundant by car manufacturers as the latter cut production and switch to making EVs. It needs the workers because it reckons that its sales will quintuple by the end of the decade!
• IN THE UK – Adzuna figures show that the overall number of job vacancies has fallen to its lowest level since March 2021. Even more shockingly, graduate employment opportunities have dropped by over 40% in the past year. The minimum wage for 18 to 20 year-olds will be going up by 8.5% from next April and research from the National Foundation for Educational Research (NEFR) suggests that up to 3million low-skilled jobs could cease to exist in the future thanks to automation and AI. Interestingly, the report reckons that the UK economy would actually add 2.3m jobs by 2035.
• IN THE US – a report by McKinsey Global Institute made the dramatic statement that AI could replace 40% of jobs. It says that process-driven-type jobs will suffer most while dangerous jobs will be replaced by robots. It doesn’t sound like it’s saying anything we haven’t heard before – it’s just put some numbers on it…

IN CONSUMER TRENDS…

• IN THE US – Americans are on a year-end shopping spree, bagging bargains at places like Walmart, Gap and TJ Maxx – something that figures from the National Retail Federation seems to echo. That being said, companies that are exposed more to discretionary spending are finding the going harder than companies that sell basic essentials, which isn’t surprising. Trump boasted about cheap groceries ahead of Thanksgiving, but he was very selective. US retail sales data from the US Census Bureau conflicts with this, though, as it shows that US retail sales slowed down sharply and undershot Wall Street expectations, while the Conference Board’s consumer confidence index hit its lowest level in five years! Meanwhile, according to data from the Federal Reserve Bank of New York, the share of credit card loan balances that are over 90 days behind on repayments has reached 12.4%, which is the highest level since 2011 and the country’s debt has boomed by 76% from the start of 2011. Perhaps this explains the divergent data sets – that perhaps people are using credit cards to pay for basics. If that’s the case, it doesn’t bode well for the economy.
• IN EUROPE – I’ve mentioned it before, but I’ll mention it again because this reflects changing consumer tastes as well but Gen Z has been drinking less (or not at all), prompting panic in France’s wine industry. According to the latest stats, French adults drink 70% less wine each year than they did in the 1960s and almost 25% of people aged between 18 and 25 are teetotal!
• IN THE UK – according to the ONS, retail sales have been worse than expected because everyone’s been reining things in ahead of the Budget. On the positive side, rail fares are going to be frozen for the first time in 30 years to help with the cost of living crisis, which I’m sure will be welcomed by commuters after they faced a great-than-inflation rise of almost 5% earlier this year. Meanwhile, yet another billionaire is leaving the UK. Lakshmi Mittal, the Indian steel mogul, is leaving after spending 30 years here. Apparently it’s because of the tax treatment, but you just don’t know…

IN TECH NEWS…

US tech stocks had their biggest jump for 6 months this week thanks to investors got more excited about the prospect of a Fed interest rate cut next month. It’s difficult to tell whether this is just a blip or a genuine turn in market sentiment…

• IN AI NEWS – major insurers are now trying to exclude AI risks from corporate insurance policies because they don’t want to have to pay out for a slew of multibillion dollar claims that could emerge. AIG, Great American and WR Berkley are among the groups who have been looking to get permission from US regulators to offer policies excluding liabilities related to the employment of AI tools including chatbots and agents. Something needs to be done here because I’m sure that attacks are going to get increasingly frequent.
• According to a study by MIT and Hugging Face, China has overtaken the US in the global market for “open” AI models in terms of downloads. This is the first time that they have overtaken the likes of Google, Meta and OpenAI. Open models are free to download, customise and integrate by developers, so they are very popular as people can tinker with them.
• Talking of overtaking, Nvidia’s shares weakened as it turns out that the AI chips that Alphabet is making itself are closing the gap with Nvidia’s.
• Chinese tech giants including Alibaba and ByteDance are getting around US efforts to limit China’s access to advanced chips by training their models in data centres across south-east Asia and now Alibaba’s Qwen and ByteDance’s Doubao models are mixing it with the top-performing LLMs worldwide.
• Human investors still have the edge over AI stockpickers, according to research from Scientific Beta. The research said that AI’s outperformance has been vastly overstated because gains were based on the trading of small illiquid stocks that are generally untradeable in the real world. In addition, AI picks were based on hindsight, using information that wasn’t available at the time of the hypothetical investment and so claims that AI could outperform benchmarks by about 40% per year were shown to be way too high – the reality is more like 3%.
• There’s a new model that’s being developed by scientists, called PopEVE that flags previously unknown human genetic mutations that can cause disease. It has outperformed rival models and is particularly interesting because it doesn’t need tons of electricity to run, so it could be accessible for low and middle-income countries.
• AI start-up Suno has signed a deal with Warner Music Group that will enable it to launch new models using licenced songs. Suno will launch these new models next year and users will have to pay subscriptions to download songs. This is the latest such deal to be signed by a music company and AI companies that use their content.
• HP said that it plans to cut up to 10% of the workforce as it cuts costs that will then be redirected to AI.
• Catering group Compass is on the lookout for contracts from tech companies and data centre builders in order to benefit from the current boom in this area. It is already doing just that but wants to ramp things up as it announced a decent performance for the year.
• IN DATA CENTRES – Amazon said that it’s investing $50bn in building AI infrastructure to power its cloud business to facilitate the building of proprietary systems by each customer. Impressive!
• IN HACKING – the debate continues about whether governments should outlaw owners and operators of critical national infrastructure from paying ransoms to hackers, something that the UK government is currently discussing. The idea is that if hackers know they won’t get paid, they’ll leave these institutions alone. The risk is that this will make them more enticing as targets. Some are saying that reporting ransom payments should be mandatory…the debate continues…

IN MEDIA NEWS…

• IN STREAMING – Spotify announced plans to raise subscription prices in the US in Q1 of next year. This comes after the streamer increased prices in a number of other countries this year – including the UK, Switzerland and Australia. It last raised prices in the US – its biggest market – in July 2024.
• IN SOCIAL MEDIA – an update to X in the “about this account” tab means that you can see the current locations of individual accounts. This means that it’s way easier to see who the trolls are! It has revealed that spreaders of anti-immigrant messages, information about Scottish independence and anti-Brexit posts turned out to be trolls from all around the world! This is great but it’s not going to stop the spread of fake news on its own!
• IN ADVERTISING – it seems that a brand new revenue stream is popping up in EVs. Some of the big screen real estate in EVs is going to be taken up by in-car ads. German start-up 4screen is developing the tech and has already signed agreements with Stellantis, Mercedes Benz and Audi. 4screen’s promotions generally appear as branded pins on a GPS map or sponsored search ads when a driver is seeking out a destination but it can also send notifications to the touch screen map with offers.

IN RETAIL NEWS…

• IN SUPERMARKETS – Asda fortunes continue to slide one year on from the much-vaunted return of previous Asda saviour Allan Leighton. In fact, it’s doing so badly that ratings agency Fitch downgraded it even deeper into junk status. It was never going to be a quick turnaround, but the pressure to turn it around continues to ratchet up.
• IN APPAREL – Abercrombie & Fitch’s share price boomed as thanks to strong sales at its main brand and at Hollister. That being said, it was from a low base because the share price is down about 40% over the last year and so Wall Street expectations were low.
• ELSEWHERE – Kingfisher, the owner of B&Q and Screwfix, unveiled a solid performance this week that came in above analyst expectations. It’s often seen as a bellwether for the economy, so the fact that it wasn’t disastrous was a positive. Meanwhile, the nightmare at Pets at Home continues following a string of profit warnings. It’s still without a CEO and so the chairman has had to get involved in running the day-to-day until a candidate can be found. Jobs are going to be cut as part of a cost-saving drive. Meanwhile, competition from continues to intensify, mainly from online rivals.

IN LEISURE NEWS…

• IN HOSPITALITY – The Ministry of Housing, Communities and Local Government announced that local mayors will be allowed to impose a “tourism tax” on overnight stays in English cities, including London, in hotels and Airbnb-style rentals. Mayors loved the idea but hotel groups did not. I guess the worry here is that a combination of the new tourism tax and lack of tax-free shopping might put people off coming to the UK. Then, in restaurants, we saw that the guy responsible for Domino’s recent shift to fried chicken, a company veteran of over twenty years and CEO for the last two of them, left the company this week “by mutual consent”. The fried chicken “Chick ‘N’ Dip” rollout is still going ahead, though…
• IN AIRLINES – EasyJet saw a rise in annual profits thanks to strong demand for its package holidays taking the edge off effects of the broader economic landscape.

• IN REAL ESTATE – IN COMMERCIAL PROPERTY, Canary Wharf is really staging a comeback just two years after commentators predicted its demise after big tenants including HSBC and Clifford Chance announced that they were moving out. Since then, Revolut has made Docklands its new global HQ while other businesses including Zopa, BBVA and Hershey’s have all moved there. Even HSBC recently asked for some extra space there! Elsewhere, UK ministers granted planning permission for the £750m Marlow Film Studios development in Buckinghamshire that had been blocked by the local council because it was on greenbelt land. This looks like an indication of how things are going to go under the current government that’s keen to cut planning red tape. IN RESIDENTIAL PROPERTY, the latest data from Lloyds Banking Group shows that affordability for first-time buyers is now the best it’s been since the end of 2015! Affordability is judged to be the property price to income ratio, which is now at 5.9 times the average first-time buyer salary, down from 6.2 times at the end of 2024. Although the average cost of a first-time buyer home has jumped by 2.4% in the last 12 months, average incomes have increased by 6.2%. The situation can vary significantly from place to place though. Elsewhere, analysis by Zoopla showed that house prices fell in southern England for the first time in 18 months in the run-up to the Budget. Now that the Budget has been announced, will we see a buying frenzy?? IN STUDENT PROPERTY – Unite, the UK’s biggest landlord, is looking to concentrate on properties in areas that have the “strongest” universities and sell off sites in weaker ones as it cut its earnings forecasts for next year. Meanwhile, its proposed acquisition of rival Empiric Student Property just got CMA clearance.
• IN AUTOMOTIVE NEWS – Tesla sales continue to plummet in Europe and now BYD is outselling Tesla by more than two to one. NIO’s net loss narrowed in Q3 thanks to improving sales and margins. Elsewhere, VW announced that it can, for the first time, develop cars outside Germany and produce an EV entirely made in China for half the cost. It’s planning on launching around 30 EV models in China over the next five years following big investments in local R&D. This all sounds great but, right now, it’s falling behind on its plans to shed staff in Germany. It’s been trying to engineer voluntary exits but it is now falling behind plan – so I guess involuntary exits are going to be next.
• Private equity is increasingly turning its attention to law firms who can offer steady, recurring revenue. Top lawyers will find the prospect of monetising their partnerships increasingly enticing as a way to access cash during their working lives and use as incentives to lure top talent.
• Saudi Arabia announced plans to become more foreigner-friendly by expanding access to alcohol. It announced plans to open two liquor stores in Jeddah and Dharan following the opening of the first outlet last year in Riyadh. This is the latest move in an overall strategy to attract more tourists and highly skilled foreign workers.

I’m so sorry but my favourite video this week was the one with Arnold belting out Careless Whisper. I just can’t help it. This will go in my collection of videos I play when I feel I need a bit of cheering up along with Stiffler’s dance-off, Chicken Attack and the croissant video. As I’ve said before, I think it’s good to have some silliness in our lives from time to time!