Tuesday 07/02/23

  1. In MACRO & CRYPTO NEWS, Turkey’s earthquake devastates, Sunak is about to do a mini post-Zahawi reshuffle and Britcoin moves forward
  2. In TECH NEWS, Google brings out Bard, Baidu sets an AI bot launch date, Amazon has plans for Alexa, search wars are ignited and Dell cuts 5% of its workforce
  3. In CONSUMER TRENDS & RETAIL NEWS, US consumers spend less on meat, UK card spending increases and M&Co cuts shops
  4. In MISCELLANEOUS NEWS, EVs power car sales, Nissan warns, the UK’s EV industry falters, Rothschild aims to go private and finance sector job vacancies increase
  5. AND FINALLY, I bring you a Jaffa Cake champion…

1

MACRO & CRYPTO NEWS

So a huge earthquake hits Turkey, Sunak’s about to do a mini-reshuffle and Britcoin moves forward…

📢 I’ll shortly be publishing my annual P/Review where I roundup the news of the year in 2022 and then outline predictions for themes in 2023. Because it’s such a big report 😱, I will be publishing it in stages. There is nothing like this anywhere else, and it will help your understanding of what’s going on enormously so keep an eye out for it! In the meantime, I’ve recorded a special podcast where Ralph Hebgen and I talk through some key themes to watch out for this year. You can listen to it HERE or watch it HERE.

Did you know that there is a podcast to go with Watson’s Daily? In this podcast, I discuss two stories from the day’s edition in a bit more depth with a Watson’s Daily Ambassador, my mate Ralph (on the Weekly podcast) or a special guest. The idea of this is to help to give you more of an idea of what talking about this stuff could sound like 👍 You can find the podcasts on the buttons below:

In Devastating earthquakes in Turkey and Syria leave thousands dead (Financial Times, Ayla Jean Yackley, Raya Jalabi and Adam Samson) we see the devastating effect of the 7.8 magnitude earthquake and massive aftershock in Turkey and Syria – the biggest one in Turkey since 1939, which saw the tragic deaths of 33,000 people. So far, it is thought to have killed over 3,000 people and destroyed thousands of buildings. Turkish President Recep Tayyip Erdogan has declared a seven-day mourning period. On the

Syrian side, the affected region has been ravaged by civil war and matters have been made even worse by a medical infrastructure that has been decimated. * SO WHAT? * This is, of course, a huge tragedy and my heart goes out to those affected. It is devastating. However, in terms of other impacts, Turkish lira hits record low after earthquakes strike (Daily Telegraph) shows that the embattled currency weakened further and banks were sold off. Istanbul’s stock exchange called a temporary halt to the trading in a number of companies throughout the day. Erdogan is going to be facing an election in May that could go either way, so his response to this crisis will be very much under the microscope.

Back in the UK, Rishi Sunak poised for mini-reshuffle after Nadhim Zahawi’s downfall (Financial Times, Jim Pickard and George Parker) highlights yet more changes in the UK government as the PM looks to have a bit of a refresh following the sacking of Nadim Zahawi. He is expected to appoint a new party chair and overhaul the Department of Business, Energy and Industrial Strategy (aka “BEIS”), something he had promised to do since last year. This sounds like a bit of a “BEISt” (see what I did there) and is in need of some clarity! Anyway, we’ll see what happens soon enough…

Then in UK to design ‘digital pound’ that could fend off future private tech rival (Financial Times, Chris Giles and Siddarth Venkataramakrishnan) we see a bit more about the story I referred to in yesterday’s Watson’s Daily about the proposed Central Bank Digital Currency (CBDC), unofficially dubbed “Britcoin”. The UK Treasury and Bank of England are creating a “digital pound” that could replace banknotes by 2030. It is believed that the creation of “Britcoin” would help the Bank of England maintain control of the UK financial system. A final decision on whether or not to go ahead with this will be made in 2025. As at December 2022, 114 countries are looking at creating their own digital currencies. Other countries, including China, the Bahamas and Jamaica have already partly or fully launched CBDCs for different reasons. * SO WHAT? * This all sounds good and I think that there is merit to looking into this, but I suspect it will all be a long process. It could be a great opportunity to streamline a number of payments systems, including those used with debit and credit cards, which may mean that costs could be reduced and payments could get faster/become instantaneous. 

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

2

TECH NEWS

AI causes a tech scramble and Dell slashes its headcount…

After all the recent kerfuffle, Google’s Bard to challenge ChatGPT for AI chatbot crown (Daily Telegraph, Eir Nolsøe) shows that the company announced plans yesterday to launch its own chatbot (called “Bard”) in a bid stay relevant. Interestingly, Google is at the cutting edge of all this when it comes to research – but it has been slow to integrate its AI capabilities into its services. Some say this is because there are concerns it might produce misleading results as well as there being an unwillingness to launch new features that might mess with the profitability of its existing search business. Baidu shares jump after tech group sets March launch for AI search bot (Financial Times, William Langley) shows that investors are getting excited about the Chinese tech giant launching its own chatbot in March as they sent shares in the company up by over 13% and Amazon has big plans for Alexa: is it all talk? (The Times, Katie Prescott) shows that Amazon doesn’t want to get left out of the AI funbus either and has plans for Alexa, although this part of the business is still loss-making. Search wars reignited by artificial intelligence breakthroughs (Financial Times, Richard Waters) points to ChatGPT as spearheading the first real

challenge for Google’s search dominance and suggests that the future of search should be an amalgamation of AI and traditional search which should keep it relevant (ChatGPT’s “knowledge” is at least a year old). * SO WHAT? * All of this AI stuff could really change search and everything that goes with it forever. For instance, for publishers who rely on traffic generated by search engines, it is possible that users will be able to find answers without having to go through all the hassle of clicking through to the pages themselves – which means that referral traffic will fall. If this becomes the case, publishers could potentially wall off their sites and charge search engines to access them. There are many possibilities, but it’s still too early to tell where this will go! It would certainly change the advertising model and potentially the way SEO is valued.

Meanwhile, Dell to Lay Off More Than 6,500 Workers or 5% of Workforce (Wall Street Journal, Will Feuer) shows that the Big Tech layoff is continuing as the company blamed adverse market conditions for the action. The company already had a hiring freeze, limited employee travel and cut spending on outside services. It’s also doing an overhaul of sales, customer support, product development and engineering. The slump in PC demand was always bound to have consequences.

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

3

CONSUMER TRENDS & RETAIL NEWS

US consumer habits change, UK card spending rises and M&Co cuts shops …

Tyson Foods Profit Tumbles as Costs Rise and Demand Weakens (Wall Street Journal, Patrick Thomas) shows that consumers are changing their buying habits as the biggest US meat processor by sales announced its biggest fall in quarterly profit in over ten years. * SO WHAT? * This is a major development as Tyson supplies about 20% of America’s beef, pork and chicken. Grocery prices increased by 11.8% in December versus the previous month, but while consumers are battling away on one side, Tyson is having to pay out more transport, labour and production on the other! Tyson’s beef business – which accounts for about 40% of Tyson’s 2022 sales – is now proving to be its biggest challenge as supply has also been getting tighter, which is also pushing prices up. On the plus side, the company’s plan to cut $1bn in costs by the end of its 2024 fiscal year is ahead of schedule. I guess Tyson’s just going to have to grit its teeth and grind this one out although it is possible that smaller operators won’t be able to weather the cost pressures and give the food processing giant opportunities to snap up attractive assets.

Back in the UK, Card spending jumps even as recession looms over consumers (The Times, Tom Howard) cites the latest data from Barclays which said that Britons spent more in January 2023 than they did in January 2022, but this was due almost entirely to higher prices rather than buying more “stuff”. Spending on debit and credit cards rose by 9.7% over the period as people spent 44.7% more on gas and electricity bills and 66.1% more on travel as they booked summer holidays (this travel number was probably an anomaly due to the super-low comparatives for last year as that was when the Omicron outbreak happened). Separately, the BRC and KPMG published a report which said that although retail sales rose in January, “the rise in sales masked a much larger drop in volumes once inflation is accounted for”. Tough times ahead…

Then in retail, Clothing retailer M&Co to close 170 shops with loss of up to 1,900 jobs (The Guardian, Sarah Butler) shows that the Scottish clothing and homeware retailer is going to shut all of its 170 stores after falling into administration before Christmas. Its brand was bought by AK Retail Holdings, but it didn’t buy up the stores or include any of the staff in the deal. Another retailer bites the dust…

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

4

MISCELLANEOUS NEWS

There were some interesting developments in EVs and financials…

In a quick scoot around some of today’s other interesting stories, Electric vehicles power rise in UK car sales despite weak outlook (The Guardian, Mark Sweney) reflects the ongoing trend that EVs have been the main “driver” of car sales in the UK while forecasts of annual sales have been cut due to concerns that consumers will swerve big ticket items like cars, according to the latest figures from the SMMT while Sunderland may lose out, Nissan warns (The Times, Robert Lea) highlights sabre-rattling by the Japanese manufacturer which is probably after some government handouts to cope with rising costs that are making the Sunderland plant less competitive. I agree with Britain will never create a homegrown electric car industry (Daily Telegraph, Ben Marlow) if things don’t change considerably as we just aren’t throwing money at EVs the way other countries are and Britishvolt, which is currently being bid for by Aussie start-up Recharge Industries, is a prime example of this.

Meanwhile, in the financials sector, Rothschild family plans to take investment bank private (Financial Times, Harriet Agnew, Oliver Ralph and Ivan Levington) shows that the ultra-rich Rothschild family wants to take its investment bank, Rothschild & Co, private while Rothschild & Co: bid for weak stock pulls a reverse Goldman Sachs (Financial Times, Lex) highlights the fact that this actually goes against the trend of banks wanting to do the opposite! Then in Finance sector advertises big jump in job vacancies (The Times, Jessica Newman) we see that the number of jobs advertised in the finance sector in England and Wales jumped by over 25% in 2022 versus the previous year. This is quite surprising given wider market conditions but activity last year increased in fintech and IT professionals while KPMG, Revolut, Equiniti and Barclays were among the most prolific of employers. It’ll be interesting to see how that changes this year…

Want to engage with myself and the team at Watson’s Daily about these stories? Why not ask us something in the Forum HERE. It’d be great to hear what you think!

5

...AND FINALLY...

…in other news…

I’m a fan of Jaffa Cakes. Are you? I don’t think I could do this, though: Man crowned Jaffa cake champion after gobbling 102 in just three minutes (The Mirror, Ariane Sohrabi-Shiraz). This does not sound like my idea of fun!

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Some of today’s market, commodity & currency moves (as at 0634hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq*DAX *CAC-40 *Nikkei **Shanghai **
7,837 (-0.82%)33,891.02 (-0.1%)4,111.08 (-0.61%)11,887.45 (-1%)15,346 (-0.84%)7,137 (-1.34%)27,685 (-0.03%)3,248 (+0.29%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿
$75.139$81.959$1,874.821.205211.07386132.1661.1223322,951

(markets with an * are at yesterday’s close, ** are at today’s close)