Thursday 22/04/21

  1. In MACROECONOMIC NEWS, the UK looks set for big growth while inflation falls short and Draghi plans Italy’s overhaul
  2. In BOUNCEBACK NEWS, Pendragon sees growth, Pizza Express returns, Wetherspoon reopens, PureGym works out, bookshops see action and BetMGM forecasts strong revenues
  3. In PROPERTY NEWS, Hammerson sells retail and UK house sales reach record levels
  4. In INDIVIDUAL COMPANY NEWS, Tesla has China problems, Uber Eats moves into Germany, PensionBee’s IPO goes without incident and Amazon offers palm access
  5. AND FINALLY, I leave you with what is probably the weirdest thing I have ever seen…

1

MACROECONOMIC NEWS

So the UK is looking good and PM Draghi announces an Italian turnaround…

📢 It’s Thursday – so it’s time for my 30-minute Instagram Live At Five where I will run through the week’s key stories AND the one hour weekly ZOOM call for paying subscribers where I will do the same but in more detail and with much more interaction 👍 The ZOOM call will start at 5.30pm and run until 6.30pm. See you there!

UK set for best growth since 1988 (The Times, Philip Aldrick) cites a monthly survey by the Treasury of independent economists which shows that Britain is set for its best economic growth since 1988 this year with average GDP growth forecasts of 5.7%. The easing of Covid restrictions is the main reason behind this. Inflation falls short of forecasts despite higher prices for clothes (The Times, Gurpreet Narwan) cites the latest figures from the Office for National Statistics which show that higher fuel and clothing prices weren’t enough to push inflation up to

expected levels. The CPI hit 0.7%, up from 0.4% in February and was below consensus forecasts of 0.8% – all of which are still way below the Bank of England’s target of 2%. Economists do, however, believe that the CPI will pick up sharply in the coming months as consumers unleash their spending.

Meanwhile, on the Continent, Draghi plans €220bn overhaul of Italy’s economy (Financial Times, Miles Johnson and Sam Fleming) highlights “new” Italian PM Mario Draghi’s plans to unveil a massive recovery package in an effort to get it out of the country’s worst recession since WW2. There will be big investments in high-speed rail and green energy and a complete digitalisation of the public administration which will all be paid for by the EU’s pandemic recovery fund. Draghi’s recovery plan should be approved by the Italian cabinet by the end of this week. * SO WHAT? * Everything is lining up nicely for “Super” Mario, but the key will be the execution. At the moment, he seems to be enjoying general support but this can fall away if he doesn’t get at least some results quickly. Italy has been an economic basket case for years – will Draghi be able to bring some order? Well if anyone can, I think he can given his experience yet lack of baggage.

2

BOUNCEBACK NEWS

The post-lockdown bounceback begins…

Car dealer Pendragon bounces back (Daily Telegraph) points out that the car dealer has recovered from cutting almost a quarter of its staff and shutting its showrooms last summer to post an underlying profit of £10.8m in the first quarter of this year. On the high street, Slice of good news on jobs as Pizza giant returns (The Times, Dominic Walsh) shows that the company is planning to hire 1,000 new employees in anticipation of its restaurants reopening over May and June and Wetherspoon to reopen dozens more pubs as customers return (Daily Telegraph, Laura Onita) shows that ‘Spoons is planning on more pub openings and extending opening times as lockdown restrictions lift.

On a healthier note, PureGym hits 1m workouts as users get back into shape (Daily Telegraph, Laura Onita) shows that lockdowners are keen to shed those extra pounds and Sales up by 33% in first week of bookshops reopening in England and Wales (The Guardian, Alison Flood) highlights the success of booksellers, with the owner of Westbourne Bookshop, Paul Angel saying that people have been trying to smell the books through their masks (?!?) and acting like kids in a sweet shop!

Then in BetMGM revenues set to soar to $1bn after rapid US growth (Financial Times, Alice Hancock) we see that the US sports betting venture between casino stalwart MGM and gambling company Entain (which owns brands including Ladbrokes and Coral etc.) is forecasting that its revenues next year will shoot up by a whopping 400% due to huge growth in the US gambling market post the pandemic.

* SO WHAT? * As stimulus measures kick in, vaccines are rolled out and travel and business restrictions lift, consumers are expected to spend their money on a wider selection of goods and experiences. Given that consumer spending is usually the main driver of developed economies, the importance of the return of the consumer cannot be overstated. There is talk that pre-Covid spenders have turned into savers and that there are people who are still very cautious regarding their current spending plans, but I really do think this will be vastly outweighed by people who just want to live again. After surviving a disastrous year, businesses are looking forward to a comeback!

3

PROPERTY NEWS

Hammerson sells down retail parks and UK house sales hit record levels…

Hammerson aims to trim debt with retail parks sale (Financial Times, George Hammond) shows that the shopping centre owner has managed to offload the last of its retail parks in its bid to pay down some of its £2.2bn debt. It sold a portfolio of seven retail parks to Brookfield, the big Canadian investor, for £330m. Hammerson is trying to trim its portfolio and repurpose old retail buildings where possible. * SO WHAT? * Hammerson has a massive mountain to climb and it’s basically going to have to sell its best stuff (retail parks have actually been doing quite well under lockdown, for instance) in order to make a quick buck. This is the low-hanging fruit – there will be less attractive assets that they just can’t sell, but at least this is a step in the right direction re paying down debt.

Meanwhile, in residential property, Sales at 16-year high as house prices soar (The Guardian, Hilary Osborne) shows that the number of homes sold in the UK reached a record high last month as buyers and sellers rushed to beat the Stamp Duty holiday deadline. The number of transactions reached their highest point since the HMRC started publishing this data in 2005. Other figures from the Office for National Statistics showed that the average house price rose by 8.6% over the year to February – the highest annual growth rate for the housing market since October 2014! * SO WHAT? * It  will be so interesting to see what happens when the stamp duty holiday ends – but in the meantime I think that the buying surge is going to continue over the spring and summer despite the fact that any savings that you might get in stamp duty may be swamped by the increase in house prices themselves. Property sales increase at this time of year anyway, so when you add in the frisson of saving money on stamp duty and lockdown restrictions lifting (not to mention FOMO!), the pull to trade may be too strong to resist! 

4

INDIVIDUAL COMPANY NEWS

Tesla faces difficulties in China, Uber Eats expands in Germany, PensionBee has a decent debut and Amazon wants your palm…

Tesla apologises after Chinese state media attacks (Financial Times, Christian Shepherd) shows that Tesla has been forced into making an apology as Chinese state media attacked the way it treated customers. Demonstrators have been wearing T-shirts alleging that the company’s vehicles had “malfunctioning brakes”. This follows the occurrence of an accident in February which the Chinese owner alleged was due to brake failure. Negotiations broke down after Tesla refused to allow a third party investigation into the cause of the crash, but this has now blown up in their faces with allegations that they were “shirking responsibility”. * SO  WHAT? * I think this sounds extremely fishy. Now I’m the first to say that Tesla is pretty slippery when it comes to admitting responsibility for when things go wrong, but it does sound like this is some kind of state fit-up with the customer refusing a third part inspection! This is obviously going to be great for domestic makers who have Tesla’s #1 position firmly in their sights! They are already doing pretty well with younger people!

Uber Eats plans Germany launch in challenge to Just Eat Takeaway (Financial Times, Tim Bradshaw and Dave Lee) shows that Uber is going to try to muscle-in on Just Eat Takeaway’s straglehold on the German food delivery market by launching in the next few weeks, starting in Berlin. This will be the company’s biggest entry into a new market since 2018. Interestingly, Deliveroo sinks as Uber Eats expands into Germany (Daily Telegraph, Louise Moon) shows that this expansion acted as a reminder that

the food delivery industry has a deep-pocketed contender in the form of Uber. This meant that Deliveroo – which actually withdrew from Germany in 2019 – saw its share price fall by 9.8%, meaning that its share price is now a massive 40% below its IPO price!

In other news, Pensionbee has the City humming with a trouble-free debut (The Times, James Dean) shows that PensionBee made an understated debut on the London Stock Exchange yesterday. The share price moved very slightly above the IPO price of 165p on the day and I guess the fact that it didn’t fall through the floor (like Deliveroo did!) will have calmed investor nerves about London flotations! * SO WHAT? * This is good news and may go a small way to improving investor sentiment. Still, PensionBee is a bit of a tiddler in the scheme of things so I think it’ll take a decent performance from a big name IPO to get things back on track and restore confidence that London hasn’t lost it!

Then in Forgot your card? Then pay by palm (The Times) we see that Amazon is at it again – innovating! The company is going to introduce biometric technology at its Whole Foods stores in Seattle where shoppers will be able to pay for items by scanning their palms! This technology, called Amazon One, allows customers to “attach” a card to their palm print and offers a contactless alternative to cash and card payments. * SO WHAT? * Although this sounds quite fun, privacy experts warn against the use of biometric data like palm or face scans due to the risk of being hacked. Amazon says that it keeps all the info secure in its cloud system. Amazing and yet creepy, no? Amazon can keep track of what you buy, what music you listen to, what you watch, what you talk about (via smart speakers??) and now – body parts! 

5

...AND FINALLY...

…in other news…

I have a sneaking feeling that I’ve included something like this before but I have to say this is the weirdest thing I’ve ever seen: Ultra-realistic cat backpack causes a fur-enzy online (SoraNews24, Oona McGee). I mean, you could say that this could appeal to cat haters as well as cat lovers! So so weird 😱

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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)