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.
AUTOMOBILE MAKERS GENERALLY HAD A ROUGH WEEK...
- …what with European carmaker share prices falling on the back of Trump threats (Wednesday) of tariff increases. The official line from the White House is that no additional levies will be imposed while it is conducting negotiations with the EU and Japan, but Trump has often threatened a tax on foreign car imports. Currently, US cars shipped to the EU face way higher taxes than European cars being shipped to the US
- GM announced factory closures and the culling of 14,700 jobs (Tuesday) as part of company efforts to futureproof itself against expected changes in ownership trends (fewer people will own their cars) and vehicle electrification. Trump didn’t like this, but I’m not sure whether he can do much about it
- Tesla had a shocker as its sales in China fell by 70% last month (Wednesday). Tesla imports all the cars it sells in China and the government imposed a hefty 40% tax on car imports coming from the US in response to Trump’s tariffs going the other way. No wonder it recently lowered its prices on the Model S and Model X to take the hit!
IT WAS A MIXED WEEK (AS ALWAYS THESE DAYS!) FOR RETAIL...
- The week kicked off with disappointing early data from Black Friday for the UK high street (Monday), but John Lewis turned out to be a winner (Wednesday) as it clocked up its biggest week ever as shoppers bagged deals on gadgets, beauty products, clothing and beds
- Ikea reported a hefty 40% fall in profits (Thursday) due to costs related to changing its business model from being a big out-of-town retailer to one with a better online and town centre presence. Profits are expected to be depressed for the next three years as the meatball and furniture retailer funds this transition from its own pocket rather than hiking prices and making its customers pay
- The Restaurant Group breathed a sigh of relief as the Wagamama acquisition was approved (Thursday), although 40% of investors voted against it mainly because they thought it was too expensive and don’t like the way the acquisition is going to be funded (a deeply discounted rights issue)
- A takeover bid for shopping centre landlord Intu fell though, sending shares down by 41% (Friday) as investors are getting increasingly nervous about the fragile nature of the UK high street at the moment. I suspect we’ll see more retailers go to the wall and falling rents
...AND THERE WERE SOME INTERESTING DEVELOPMENTS IN MEDIA...
- Media giant WPP announced that it was merging two of its companies to form Wunderman Thompson (Tuesday) as the world of advertising reacts to the continued success of Facebook and Google and digital advertising. Digital is now accounts for around 60% of all advertising investment and all net UK advertising growth (Thursday)
- Netflix announced that it is going to increase the amount of European shows it produces by a third next year (Thursday) as it continues to put pressure on traditional broadcasters. AT&T announced plans to capitalise on its acquisition of Time Warner by offering three versions of its new streaming video service (Friday) from the fourth quarter of 2019 that will have original movies and TV series from Warner Bros, Turner and HBO. WarnerMedia (as TimeWarner is now known) plans an entry-level service focusing on movies, a second tier with original programming and more films and a third tier with all of the above plus classic films, comedy and children’s programming. The world of streaming continues to evolve!
I have to say that I am still reeling from watching the video in Hang glider clings on for his life after pilot fails to attach safety harness (Sky News, https://tinyurl.com/y7c4b5kx). If you haven’t seen this yet, be prepared to be shocked! After things calmed down, the guy that cheated death said “I will go hang gliding again as I did not enjoy my first flight”. ?!?
I hope you have a great weekend!