UK inflation sinks to four-year low
London markets closed before the American Covid-19 case news drove US-listed shares into the red; the FTSE 100 gained 0.2% on Wednesday, with the FTSE 250 up 0.7%. In economic news, the UK inflation rate slowed to 0.5% in May, its lowest level since mid 2016. One major drag was fuel prices, which declined by 16.7% during the month, although food prices rose as supermarkets were allowed to remain open. The Bank of England’s target rate for the Consumer Price Index – the main measure of inflation – is 2%.
Elsewhere, house building giant Taylor Wimpey announced its plans to raise £500m to spend on land, which it believes has been devalued by the pandemic and instead, created opportunity. According to the FT, over the past few months the company has bought a dozen sites for more than £100m, but intends to spend much more. In the FTSE 100, energy firm SSE was by far Wednesday’s biggest winner. The company added 9.1% to its share price, after beating consensus earnings figures and announcing it plans to continue backing its dividend, which currently yields around 7%.
- FTSE 100: +0.2% Wednesday, -17.1% YTD
- FTSE 250: +0.7% Wednesday, -19.7% YTD
What to watch
Kroger: Kroger is one of America’s largest retailers, operating thousands of supermarkets and department stories, and is also one of America’s biggest employers. The company, which reports earnings on Thursday, has seen its share price gain 13.2% year-to-date. Since the pandemic began, the company has hired more than 100,000 workers, in order to handle demand for staple items while needing to meet additional safety requirements. Investors have high hopes for its Thursday report, and will be waiting for a substantial earnings beat. Currently. 10 analysts rate the stock as a buy, one as an overweight, 13 as a hold, and one as a sell.
UK retail sales: Following May’s record jump in retail sales figures in the US more than doubling expectations, investors will be eyeing May’s retail sales data report in the UK on Friday. Versus April, retail sales are expected to have gained 5.7%, with a 17.1% deficit versus May 2019’s figure. In April, UK retail sales fell by 18.1% versus March, the biggest dropoff since records began in 1988.
Crypto corner: Number of Bitcoin ‘whales’ increasing
The number of so -called ‘Bitcoin whales’ has increased by 2% in the short time since the cryptoasset’s halving event, despite the fiat price of a Bitcoin mostly treading water in that time. A Bitcoin whale is a holder of 1,000 coins or more of the cryptoasset.
According to data from blockchain analytics firm Glassnode, the number of whales has increased from 1,811 on 1 May to 1,840 as of Tuesday – a level not seen since November 2017. A whale’s holding of 1,000 Bitcoin would be worth $9,411,930 on today’s valuation of the cryptoasset.
Glassnode says its measure of investor participation – the whale metric – is more useful than typical measures, which look at the number of addresses on the network as a proxy for investor participation. According to Glassnode, this is inaccurate as some Bitcoin users will have multiple addresses to access the network.
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