Wednesday 13/09/23

  1. In BUSINESS TRENDS NEWS, we look at China’s business sentiment, China’s car makers being on the verge of overtaking Japan, the clamour for arms, German gloom, the UK’s resurgence and developments in law
  2. In CONSUMER/RETAIL NEWS, pay rises exceed inflation, food price increases lose momentum, mortgage rates are cut (but mortgage arrears rise), dynamic beer pricing faces a backlash, Aldi and Lidl lose ground, more Wilko stores are picked up, Wickes gets a WFH boost and ABF predicts higher profits
  3. In IPO NEWS, TKO floats while Birkenstock and Lime make preparations
  4. In MISCELLANEOUS NEWS, Google faces a tricky time, Oracle gets cautious and BP’s CEO resigns
  5. AND FINALLY, I bring you some amazing pizza tossing…



So we look at China’s business sentiment and supremacy in cars, Europe’s biggest arms fair and German gloom, the UK’s factory output and what’s going on in law…

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China’s business confidence problem (Financial Times, Edward White) takes a look at the current state of business sentiment and how it is being dampened by the broader slowdown of China’s economy. The most recent Caixin survey showed that business confidence in August fell to its lowest point in a year, which is slowing down job creation, wealth creation, innovation and a decent chunk of GDP growth. Meanwhile, research from the Peterson Institute for International Economics found that in the first half of this year, the share of state-controlled companies among the largest listed companies increased from 57% to 61%. * SO WHAT? * It could be that this is just a phase that the economy is going through and that all the changes brought in under president Xi Jinping’s “common prosperity” push have made entrepreneurs in particular more cautious about pushing the boundaries. Still, the prevalence of unpredictable regulations and crackdowns coming out of nowhere will need to reduce in order for business to get its mojo back.

Then in China set to overtake Japan as world’s biggest car exporter (Financial Times, Edward White, Song Jung-a, Leo Lewis and Andy Lin) we see that China is now on track to become the world’s biggest car exporter this year, according to the latest data from Moody’s. * SO WHAT? * It is expected that China’s EV exports will be particularly successful given that their vehicles are much cheaper than most non-Chinese equivalents – currently, around 20% of all EVs sold in Europe now are manufactured in China! Although Chinese makers are thought to be more advanced that their western equivalents in terms of tech, scale and cost advantage the main limiting factors (in the immediate future at least) are going to be worsening geopolitical tensions, limited brand recognition, a tendency towards more protectionism and consumer nationalism.

In Record numbers expected as Europe’s biggest arms fair opens in London (The Guardian, Dan Sabbagh) we see that Europe’s biggest ever arms fair opened at the ExCeL centre in London yesterday and record numbers of attendees were expected given ongoing geopolitical tensions. Russian firms are finding it increasingly difficult to fill export orders because it’s all going to the battlefield but there are 1,600 exhibitors selling their wares! * SO WHAT? * This is clearly another consequence of rising tensions in Europe and Asia and a boon for the defence sector as a whole.

The mood is grim in Germany as German builders warn of crisis as they scrap record number of projects (Financial Times, Martin Arnold) cites the findings of the latest Ifo survey which show that cancelled building projects and financial difficulties have hit German builders hard as the construction crisis in the country deepens while Sentiment over German economy at lowest since 2009 (Daily Telegraph, Melissa Lawford) cites the latest ZEW survey suggests that Germany is in its worst state since the financial crisis, if you exclude what happened in the pandemic. China’s economic slowdown has been a major factor given that it is Germany’s biggest export market. More recession looms…

Meanwhile, UK factory output overtakes France (The Times, Simon Freeman) shows that Britain’s manufacturing sector has, somewhat surprisingly, overtaken France to take eighth place in the global rankings – only the third time it has done so since 2002 – according to analysis of the latest stats by Make UK, the industry body. The food and drink industry was the biggest exporter while the aerospace and transport industries showed the biggest growth. This is great – but let’s face it, the services sector still makes up 70-75% of the UK’s GDP. Yes we should put more money into it but services shouldn’t be neglected either!

There were a few bits of interesting news regarding law firms – Big Law follows private sector into space race (Financial Times, Joe Miller) highlights DLA Piper as being the latest law firm to follow the likes of Mayer Brown and Hogan Lovells into launching a dedicated space law business that will advise on regulatory and intellectual property issues in addition to dispute resolution. SpaceX, Virgin Galactic and Blue Origin are companies that have had to operate in a relatively barren area of the law which is now rapidly developing. Elsewhere, in US law firm Paul Weiss mounts further raid on rival Kirkland (Financial Times, Will Louch, Arash Massoudi and James Fontanella-Khan) we see that Paul Weiss has poached more partners from Kirkland & Ellis and one from Linklaters as top firms vie for top lawyers. This seems to be in contrast to what seems to be the overall trend of law firms cutting staff numbers. That said, Paul Weiss is making up for lost time and trying to build its European business – and it seems to be doing that by hiring big hitters and paying them a lot of money! Pretty punch in the current landscape I’d say!

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!



We look at what consumers are facing, how Aldi and Lidl are losing ground, how more Wilko stores are sold off, how Wickes is benefiting from WFH and ABF’s profit hopes…

So, how are things going for the UK consumer at the moment?? Well, Pay rises exceed inflation to ease pressure on British households (The Times, Mehreen Khan) cites the latest data from the ONS which shows that wages exceeded inflation for the first time in over a year in July, Food price rises lowest for a year (The Times, Dominic Walsh) cites the latest data from Kantar which shows that grocery price inflation has fallen to its lowest level for more than a year (but it’s still high at 12.2%) and UK mortgage lenders push through further rate cuts (Financial Times, Siddharth Venkataramakrishnan and Joshua Oliver) highlights more mortgage rate cuts although UK mortgages in arrears jump to seven-year high (Financial Times, Valentina Romei) shows that Q2 was a tricky period for arrears, although it is still better than the situation in the aftermath of the 2008-9 crisis. If all of this is enough to make you long for an alcoholic beverage, Slug and Lettuce owner draws backlash over ‘dynamic’ beer pricing (Financial Times, Oliver Barnes) shows that you might want to avoid going to a Stonegate pub as Britain’s biggest pub company has introduced “dynamic” pricing on drinks in about 800 of its 4,000 pubs meaning that it will charge more for drinks at peak times. FWIW, I think that it is a great idea in theory but will only have any chance of working if it’s not close to any other drinking venues! Being the only one to do this is a brave/crazy move but maybe it could make pricing more fun as per a bar (now closed unfortunately!) I heard about in Singapore called “Beer Market” where the prices of beer changed every 30 minutes based on demand and flashed up on strategically-placed TV screens! And while we’re on the subject of alcoholic beverages, Fever-Tree ‘will not quit UK’ despite interest from US (Daily Telegraph, Daniel Woolfson) highlights the posh tonic water maker’s intention to remain listed in the UK, despite huge success stateside. The company’s share price has shot up by almost 40% in the last 12 months and it makes more sales now in the US than it does in the UK! At least this sounds like one UK company that’s not intending to hot-foot it over the Pond to get access to oodles of American investor cash…

Meanwhile, in the world of retailing, Aldi and Lidl lose ground to British stores in price war (Daily Telegraph, Hannah Boland) shows that the German discounters have lost a bit of ground to the incumbent British supermarkets, according to the latest figures from Kantar, thanks to the Brits attempting to fight back with lower pricing. The latest figures show that Aldi lost market share for the first time this year while Lidl lost market share for the first time in seven months. Tesco and Sainsbury’s appeared to be the main beneficiaries thanks to cutting prices and juicing up their loyalty schemes. * SO WHAT? * I would see this as a pause for breath as I get the impression that Aldi and Lidl are better able to keep prices lower for longer whereas I think that cheap pricing at the incumbents may not stand the test of time. This is what Aldi and Lidl are geared for, after all! I do think that the German discounters can perhaps do more to retain their clientele even when the economy does eventually rebound!

Elsewhere, Poundland owner to take control of 71 Wilko sites as chain is wound down (Financial Times, Laura Onita) shows that Pepco, which owns Poundland, is going to take over the leases of a number of Wilko stores and convert them into Poundland stores later this year (pending successful negotiations with landlords) and will prioritise the hiring of Wilko staff as the company continues to wind down while Primark owner shrugs off store thefts to promise higher profit (The Times, Tom Howard) shows that operating profits for parent company, Associated British Foods, are on track to beat previous expectations for the year despite higher-than-expected incidences of shoplifting hitting its margins. Its food business – which includes brands like Twinings, Ovaltine and Patak – is also doing well. * SO WHAT? * I guess that the demographic that shops at Primark is being relatively harder hit than many others, so in the current cost-of-living crisis shoplifting is inevitable. Will this situation improve?

Then in Working from home trend boosts DIY sales for Wickes (Daily Telegraph) we see that the DIY retailer saw higher sales as home-workers continued to invest in their home office spaces. I guess this will continue over time but will gradually lose momentum as the WFH frenzy dies down.

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!



We look at TKO’s IPO and flotation preparations for Birkenstock and Lime…

In IPO news, Ari Emmanuel’s martial arts group TKO eyes $1bn earnings as it lists in New York (Financial Times, Christopher Grimes) shows that the TKO Group – which comprises of WWE and UFC – began trading yesterday on the New York Stock Exchange with Endeavour, the parent group, maintaining a 51% stake. The listing comes only five months after Endeavour bought WWE. * SO WHAT? * Although I’m not a fan of all this pretend stuff (what is the attraction of bodybuilders playing dress-up??) and needlessly brutal stuff (what is the “ground and pound” all about?? Surely this is terrible for health for participants, no??) streamers need content and many actually DO like this kind of thing – and will pay for it. I do wonder, however, whether there are potential banana skins ahead in the form of legal battles with Vince McMahon allegedly paying women off for keeping affairs quiet. For now, though, it appears to be on a roll…

There are other candidates out there, though, wanting to come to market! Birkenstock Files for IPO (Wall Street Journal, Ben Glickman) shows that the shoe maker yesterday filed for an IPO with the US SEC. It didn’t give any details on how many shares it would list, give an indication as to a potential price range or say how it would use the proceeds. But it looks like it’ll be happening!

Also, Lime takes a step closer to green light for flotation (The Times, Alex Ralph) shows that the shared e-bike company is also looking at a potential listing in the US after it managed to turn a profit for the first time! This had been thanks to its highest quarterly ridership over Q2. * SO WHAT? * This sounds quite reasonable but there are still problems to be solved regarding battery safety and dumping.

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!



Google faces an uncertain future in search, Oracle gets cautious and BP’s CEO abruptly resigns…

In a quick scoot around some of today’s other interesting stories, Why a US court could spell the end of Google’s dominance (Daily Telegraph, James Titcomb) presents an interesting look at Google, which currently accounts for over 70% of all online searches, and how the trial that opened yesterday will look at how it got to where it is and whether it abused its market dominance. It will take a few weeks to unfold, but it is possible that the company could face massive fines or even a potential break-up of its businesses. We’ll just have to wait and see!

Elsewhere, Oracle may see trouble in its future (The Times) highlighted yesterday’s weak forecast from the company which suggested that increased competition in cloud computing and a reining in of digital spending were denting its revenue growth. Q1 revenues were also below par while the prospects for Q2 weren’t that great either. It will undoubtedly bounce back, but the fact that it hasn’t been able to take advantage of AI as much as some of its competitors have is somewhat disappointing.

Then in BP chief Bernard Looney resigns over past relationships with colleagues (Financial Times, Tom Wilson and Paul Murphy) we see the latest chief exec having to resign suddenly because of past dalliances with colleagues. He’ll be replaced by the current CFO “on an interim basis”, but I guess the company will be in limbo until someone permanent can be found.

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!



…in other news…

It’s always good to have a bit of healthy competition to keep you sharp. However, I think it’s fair to say that there was one clear winner in this pizza-tossing contest! Dave – if you are reading this, how’s your pizza-tossing going 🤣?!?

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Some of today’s market, commodity & currency moves (as at hrs 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 **
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

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