11th May 2021
Good morning Reopening in England remains on track with indoor hospitality and foreign holidays set to restart next Monday. And, in what can only be described as the most British of guidelines we will able to “hug but cautiously”.
Greggs on the road to recovery
Yesterday's market moves
FTSE 100 -0.1% 7,124 FTSE 250 -0.3% 22,697
The big news was in the currency markets where the pound reached $1.41 for the first time in two months. That was in reaction to: a weaker dollar, optimism about the UK economic recovery, and the increased difficulty of the SNP getting a Scottish independence referendum given they did not win a majority in Thursday’s election. This weighed on the FTSE 100 (where most companies have earnings in foreign currencies) which closed down 0.1%.
What’s going on
were once described as “everything you don't understand about money combined with everything you don't understand about computers”. But this hasn’t stopped the most popular names in the space (Bitcoin, Dogecoin, Ethereum) reaching
and it’s reported that 1 in 7 Americans now invest in it.
Over the weekend the value of Dogecoin (that started as a joke based on a meme) dropped when Tesla CEO, Elon Musk, called it a “hustle” on Saturday Night Live. It was valued at less than 1 cent at the start of the year, but has increased by more than 12,000% to 69 cents last week.
Why is this important
With each passing year, cryptocurrencies are gaining significant prominence and legitimacy in both the mainstream consciousness and the business world.
It’s no longer something just for retail investors i.e. individuals but has become attractive to institutional investors i.e. asset managers and banks, sending prices higher.
Large companies like Microsoft, WeWork and Etsy are starting to accept cryptocurrencies as payment.
The original cryptocurrency - Bitcoin – has increased in usage and value (hitting $1 trillion in market capitalisation in February 2021). It has created a whole ecosystem around it — including crypto exchanges, crypto banks, and new offerings into savings, lending, and borrowing.
With increasing popularity comes greater scrutiny from governments and regulators.
The head of the Bank of England, Andrew Bailey, warned that cryptocurrencies have no "intrinsic value" and people who invest in them should be "prepared to lose all [their] money."
The UK financial watchdog the FCA said earlier this year that "investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money".
Greggs on the road to recovery
Greggs is on a (sausage) roll, the bakery chain reported a strong recovery in sales in the 8 weeks to 8 May following the reopening of non-essential shops in April.
The pent up demand for baked goods, increase in high street footfall and also the absence of competition from indoor dining meant that sales were better than previously expected.
Greggs had thought it would take until 2022 before they returned to pre-Covid-19 levels of profit but recent performance means they now think they will reach this by the end of this year. Although they warned that the current trading environment is highly unusual, making it tough to predict how sales will develop.
They also said that as more restrictions are eased they will face increased competition as cafes and restaurants are able to do indoor dining.
The results were well received by the market, Greggs’ shares were the top performer in the FTSE 250 closing up 11% at £25.91.
Covid-19 Vaccine Update
In the past 24 hours 101k UK adults have had their first dose and 187k have had the second dose.
This means 67.3% of UK adults have had at least one dose of a vaccine, 33.9% of adults have had two doses.
Other stories to keep you in the loop
The UK government is preparing to sell £1bn stake in Natwest
Investment bank UBS will pay junior bankers a one-off $40k bonus for promotion
Easter and Mother's Day rush sees sales soar at Hotel Chocolat
Stat of the day
Average pay for FTSE100 CEOs has fallen by 20% in the past year…to around £3.5m