Wednesday 09/06/21

1. In MACROECONOMIC & BITCOIN NEWS, the global economy rebounds, the US ponders lifting of travel restrictions, Bitcoin has a ‘mare but is powered by dung
2. In CONSUMER TRENDS NEWS, UK housing continues to be red hot, BAT benefits from more vapers but hospitality hits problems
3. In EV NEWS, Wuling brings it, a UK charging network is sold to a Hitachi venture and there’s a battery recycling warning
4. In MISCELLANEOUS NEWS, a cloud glitch kills websites, Clover Health is the new meme stock and Ackman goes for Spac 2.0
5. AND FINALLY, I bring you a follow-on from yesterday’s pizza hack and curry bread flavoured cider…

So the global economy’s looking good, the US looks to lift travel restrictions, Bitcoin continues to weaken but farmers power mining by dung…

Global economy set for fastest recovery in 80 years (The Guardian, Richard Partington) is a nice positive start for today’s Watson’s Daily, don’t you think?? This is the conclusion of the latest half-yearly World Bank report which predicts that the global economy will grow at a rate of 5.6% this year versus the estimate of 4.1% it made in January. * SO WHAT? * This major bounce back is clearly fuelled by successful vaccine rollout, but the report also warns that the gap between poor nations and rich countries will widen given their comparatively slow progress. The World Bank has called for a wider distribution of vaccines to poorer countries and G7 leaders meeting in Cornwall this week will be under increasing pressure to increase spending and supply more vaccines to support such nations.

There are some positive developments afoot for the travel industry in US takes first step towards relaxing Covid travel bans (Financial Times, Kiran Stacey) as the Biden administration has set up some working groups who will be looking at how to relax restrictions for travellers arriving on US soil from the UK, EU, Mexico and Canada. Restrictions have been in place since early on in the pandemic but for obvious reasons the travel industry in particular has been pushing hard for them to be relaxed/lifted. Clearly this won’t be an overnight thing, but it is progress.

Bitcoin fall has strategists seeing possible drop toward $20,000 (Bloomberg.com) is a rather hysterical-sounding headline, but it seems that there are fears that Bitcoin is hurtling towards $30,000 while technical strategists from Evercore and Tallbacken Capital Advisors reckon that Bitcoin could fall to $20,000 if it weakens much further at the moment. * SO WHAT? * FYI, technical strategists look at charts and identify stock/currency behaviour patterns NOT based on any kind of fundamentals. Their predictions are purely based on what the charts look like which, I guess, are a reflection of market psychology over any given period of time. Some investors (although not that many) invest purely on this stuff alone, but many more others use it as a sort of overlay onto the fundamental analysis to provide further justification for their investment decisions. In other words, don’t panic too much about this – but it is definitely worth mention as, arguably, Bitcoin just doesn’t seem to trade that much on fundamentals and so you could say that technical analysis is uniquely suited to predicting what’s going to happen.

One of the major reasons behind Bitcoin’s fall recently was concern over the damaging impact that Bitcoin mining has on the environment given its extreme thirst for electricity. Well Farmers use cow manure to power cyptocurrency mines (Daily Telegraph, Sam Benstead) shows that one bright spark, Josh Riddett, who heads up Bury cryptomining company Easy Crypto Hunter, has been powering his electricity generators by methane from cow dung! His machines mine hundreds of different cryptocurrencies (but not Bitcoin) that he says are more profitable and energy efficient than Bitcoin. Farmers can earn up to 10x what they would get from the National Grid by giving Riddett all their 💩! * SO WHAT? * How amazing is this?!? I always said that cryptocurrencies were powered by a whole load of 🐂💩, but it seems that with this technology, it really can be 😂!

The UK’s housing market continues to go bananas, BAT benefits from more vapers and hospitality suffers…

I know that I keep banging on about it but the UK housing market continues to go bananas – and UK housing market is on fire, warns Bank of England chief economist (The Guardian, Phillip Inman) shows that I’m not the only one saying this! There’s a combination of red-hot demand and insufficient supply of properties, everyone racing to beat the stamp duty holiday and people who’ve saved lump sums over lockdown combining to create a market that is “on fire”. There’s more evidence of the housing market frenzy in Average mortgage deal lasts just 28 days in race to bottom on rates as lenders compete (Daily Telegraph, Rachel Mortimer) highlights that the shelf life of the average mortgage deal has dropped to less than a month from two months under “normal” circumstances because the mortgage market is so competitive right now with lenders fighting for customers that prices keep falling. Also, Housing demand helps move OnTheMarket into the black (Daily Telegraph, Ben Gartside) and Buy-to-let lender Paragon reports record earnings (Daily Telegraph) are just more manifestations of how hot things are with the property portal and buy-to-let lender reporting strong respective performances. * SO WHAT? * I don’t think it’s a question any more of whether we’re going to break the Bank of England inflation target of 2% – it’s becoming more of a question of how much are we going to beat it by and how long can we take a high rate of inflation before raising interest rates to calm the whole thing down. Pressures to increase interest rates continue…

Elsewhere, Smokers turn to e-cigarettes and vapes to heat up prospects at BAT (The Times, Simon Duke) shows that British American Tobacco (BAT), the owner of brands such as Lucky Strike and Camel among others, has raised its annual growth forecasts after more people have started to vape and use e-cigarettes! The world’s #2 tobacco maker reckons its revenues will increase by over 5% this year – up from previous predictions of 3-5%. I know that a lot of people took up new hobbies etc. under lockdown – but I didn’t realise that vaping was one of them!!!

Although there’s been a lot of positive news about businesses opening up, Stop-start restrictions are driving workers out of hospitality sector (Daily Telegraph, Tim Wallace) shows that over 40% of hospitality workers have left the business since the advent of the pandemic due to the unpredictable nature of all the guidance we’ve been getting and Pub owners aren’t ready to roll out the barrel over survival prospects (The Times, Dominic Walsh) shows that some pubs are touch-and-go as to whether they will reopen once restrictions lift further. The latest report by the Office for National Statistics shows that the percentage of bar owners with “high confidence” that their premises will survive the next three months rose above 20% for the first time since November. Although this is on an upward trend, it’s still below the overall average of 43.4% across all businesses. * SO WHAT? * Everyone obviously wants more clarity so they can make plans and fewer restrictions so that they can cram people in to be profitable once more, but uncertainty is bound to prevail. Tough times.

Wuling competes with Tesla, a UK electric charging network is sold and there are warnings about EV battery recycling…

I thought that there were some really interesting developments for EVs in today’s news and Wuling: big hopes for mini-electric cars in China (Financial Times, Lex) shows that Tesla’s got big competition in China from local maker Wuling which makes smaller, slower vehicles with less range. They’ve become popular because of price – the Wuling Hong Guang Mini EV costs just $4,500 versus the Tesla Model 3 which costs $39,000 (in China). Wuling has made its car small and light, which means that smaller and cheaper batteries can be used. * SO WHAT? * Is this the way forward for EVs? You would have thought this would be popular in China where there’s still a lot of upside in terms of EV sales – but it could also be popular in neighbouring Asian countries as well. And then, who knows – Europe and the US next??

In UK electric car motorway charging network sold to Hitachi venture (Financial Times, Peter Campbell) we see that the company that operates the UK’s EV motorway charging network, Electric Highway, is being bought from current owner Ecotricity by Gridserve, which is backed by

Hitachi. It is thought that this could be a precursor to a major investment in the UK’s charging network. More EV charging progress…

However, Cheaper electric car batteries pose waste risk, warns supplier (Financial Times, Henry Sanderson) identifies a potentially big problem with the increased take-up of electric vehicles. Basically, the current trend is to use batteries that contain more abundant raw materials such as iron rather than more expensive materials such as nickel and cobalt which means that manufacturers will be able to get less money back when they recycle them. Belgium-based company Umicore, which is Europe’s biggest battery recycling company, is currently working with the likes of BMW and Swedish start-up Northvolt on using more recycled materials in car batteries. * SO WHAT? * Buying an EV sounds like it is good for the planet. However, it isn’t quite as simple as that. The batteries thus far have been notoriously difficult to recycle and if car makers and battery makers can’t come up with better ways to do this, they could well end up creating more environmentally damaging waste than before. Then you’ve got the impact of having to generate more electricity to cope with increased demand on the grid – so it will take a huge co-ordinated effort to make sure that consumers can buy, use and charge cars effectively with minimal impact on the environment. It’s not just as easy as selling a few more EVs!

A cloud glitch hits websites, Clover Health is the next meme stock and Ackman comes up with Spac 2.0…

Just in case you were wondering (like me!) what happened yesterday, Little-known US tech firm behind a day of internet chaos (Daily Telegraph, Ben Woods) shows that cloud computing firm Fastly had a huge internet outage that resulted in a massive part of the internet to go dark. This included sites for The Guardian, the BBC and the UK government website which all went offline for about an hour yesterday! Inquiry after cloud failure cripples websites (Daily Telegraph, Matthew Field) shows that the UK government is launching an investigation into what went wrong.* SO WHAT? * This just goes to show how important cloud computing is to the internet’s ecosystem and it is possible that, in this case, there may be compensation claims made…

Elsewhere, Clover Health’s stock price surges after becoming new Reddit darling (Wall Street Journal, Anna Hirtenstein) highlights the latest meme stock du jour as the healthcare company’s share price shot up by up to 109% in trading yesterday as some Reddit users reckon it could be the next short squeeze target. Clover went public

at the beginning of this year via a SPAC but it came under pressure a month later following a damning Hindenburg Research report (one of those effectively torpedoed the prospects for alt-powered truck maker Nikola last year in spectacular fashion) which the company is trying to shake off. I guess it pays to be in the right chat groups at the right time as the fundamentals don’t reflect the share price’s performance! But since when did that get in the way of a good old retail investor rallying cry 😂!

Talking of questionable involvement of SPACs, Bill Ackman’s Universal Music deal heralds the era of Spac 2.0 (Financial Times, Ortenca Aliaj and James Fontanella-Khan) highlights the latest escapades of hedge fund manager Bill Ackman as he tries to redefine the SPAC model with his own vehicle Pershing Square Tontine Holdings which is buying into Universal Music and ditching some of the “old” perks associated with SPACs and their investors. * SO WHAT? * Essentially, he is moving towards a more investor-friendly model which may appease regulators and politicians who have become increasingly alarmed about the SPAC frenzy. Will London take note as it wrestles with how best to handle them and will a more investor-friendly approach (i.e. moving away from the take-your-money-and-run kind of SPAC behaviour we’ve seen thus far) be the key to unlocking the next wave of SPAC-backed IPO’s?

…in other news…

Following on from yesterday’s tip on how to get more pizza, I thought I’d follow up with this naughty trick: Pizza chef shares hack for stealing a slice from customers without them noticing (The Mirror, Emma Rosemurgey) 😱. If that makes you feel hungry, how about some of this to wash it all down with Curry Bread Cider: A drink with an unforgettable aftertaste (SoraNews24, Oona McGee). Yum or not?!? Japanese curry breads are superb – but I’m not sure about turning them into a drink…