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Hi John, here's what you need to know for December 2nd in 3:11 minutes.

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• Grocery tech company Ocado signed a major deal with Japan’s Aeon
• Germany’s economy is looking a little better than feared, which might not actually be great for the eurozone overall

Konnichiwa Ocado

What’s Going On Here?

Shares of Ocado – the British online grocery store and, now, tech company – rose 11% on Friday after the company announced a new partnership with Japan’s biggest supermarket chain, Aeon.

What Does This Mean?

Ocado started life as just an online grocer, but it became tougher to stay ahead as the big UK supermarkets logged in to the online market. The company focused instead on its warehouse automation, which eliminates much of the need for human labor. In recent years, it’s bagged deals to manage the delivery infrastructure and software for grocery chains in the US, Canada, and France.

Ocado’s newest partner, Aeon, launched its own online grocery service over a decade ago, but online sales comprise a paltry 1% of its $78 billion of annual revenue. It’ll take a minute for Ocado’s robots to start whizzing and whirring in Japan though: orders won’t begin flowing through the automated warehouses till 2023.

Why Should I Care?

For markets: Proof the robots are taking over.
Aeon will pay Ocado upfront, as well as ongoing fees partly based on the amount of online revenue it generates. And with the Japanese online grocery market currently worth $35 billion, that could earn Ocado significant cash over time – which could be why investors bought up its stock last week (tweet this). In winning over Aeon – which probably had several local robotics firms to choose between – new investors might be convinced of Ocado’s tech prowess. It may well be more successful as a “tech” company than they’d thought.

The bigger picture: A way to go yet.
Groceries have been slower to adjust to the digital world than household staples, which are now commonplace, for example, on Amazon. American grocery shopping is still pretty offline: only 2% of US food spending happens on the web – while in Japan and the UK, that figure is closer to 7%. Beyond delivery technology, Walmart wants to use blockchain to simplify its international supply chains. Ocado’s next project, maybe?

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On The Pull

What’s Going On Here?

With Germany’s unemployment rate unexpectedly falling in November, the country might now dig its heels in more than ever against the European Central Bank (ECB).

What Does This Mean?

The ECB has long been calling for Germany to boost its economy through extra public spending, but positive unemployment data might give the country’s policymakers even more reason to pay no attention. Even so, German industry is still in recession, and manufacturers have announced thousands of job cuts this year – including carmaker Daimler on Friday. Economists are now worried those job losses could hit consumer spending, which has helped the German economy narrowly avoid its own recession. And data released on Friday showing falling retail sales did little to allay those fears…

Why Should I Care?

For markets: Breaking a bond.
German unemployment may be low, but European unemployment – which is in the double digits for countries like Spain and Greece – is still higher than in other developed markets. Friday’s data also showed inflation (the rate at which the price of goods increase) in the bloc picking up, perhaps comforting the ECB that its low interest rate policy may indeed be working. That might explain why the bank wants to shift the burden of boosting the economy from cheap money to increased public spending. But if that did happen, the mix of more government borrowing and higher interest rates mightn’t bode well for European bonds.

For you personally: Back in stock. 
Investors have been pulling money out of the European stock market all year, even though its shares are on track for their best year since 2009. They seem to be suspicious of the rally, but might find the “fear of joining in” becomes “fear of missing out” – especially if they see economy-boosting government spending, a Brexit resolution, or a trade deal between the US and China. European stocks, then, could have another good year in 2020 as investors jump back in.

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