Susannah Streeter, Senior Investment and Market Analyst, Hargreaves Lansdown, provided the business leader with some expert analysis on the current state of the FTSE 100 market and the value of Bitcoin.
It’s been a lackluster start for the FTSE 100, although some stellar retail sales figures show that consumers were spending a lot in April.
The blue chip index has fallen below the psychologically important 7,000 mark again. For many investors, caution seems to be the order of the day, as fears of rising inflation dominate the market.
B&Q owner Kingfisher was the biggest decline in early trading, down around 4%. There are concerns about ongoing supply chain issues and the rise in shipping costs. But research by the ONS this week also shows that although shoppers jumped out of the trap when the store reopened in April, delayed spending on goods such as furniture has declined in recent weeks.
British Land was also down around 1% as there was new evidence that the pandemic has dramatically changed our shopping habits. Retailers with no physical presence saw the largest sales growth of 56% compared to April 2019. This consumer behavior is likely to weigh heavily on British Land’s retail portfolio.
At the forefront of the movers is Weir Group, the Glasgow-based engineering firm that showed some adroit moves in refocusing on mining when the oil industry suffered a blow during the pandemic. It was reinforced after Morgan Stanley analysts raised the target price on the stock, suggesting the stock price will rise given projected earnings and market conditions.
There hasn’t been much rest for Bitcoin as it slipped below $ 40,000 after its shock plunge this week. 36% of Bitcoin’s value was wiped out from its high of $ 63,346 in mid-April.
Crypto holders hoping for a quick recovery from this week’s dramatic falls should buckle up and expect another roller coaster ride. The mood has not only changed because powerful influencers like Tesla’s Elon Musk have stepped down from cheerleading for Bitcoin. China’s ban on banks and payment companies from offering crypto transaction services is a severe blow to Bitcoin’s use case and that of its competitors.
Further pressure on price could come amid mounting concerns about the amount of energy used to mine cryptocurrencies. This could also cause institutions that have bought into Bitcoin to reduce their holdings, which could lead to new declines.
The direction of travel is far from clear, however, as some crypto fans may see the recent slumps as an opportunity to shop for currencies like Bitcoin at a cheaper price.
Given the enormous volatility and the fact that the use case of cryptocurrencies is far from proven, traders should only try with money that they can afford to lose. ”