Ocado is the worst performing stock on the FTSE 100, falling 3.3% despite reporting booming sales as its online grocery service, which benefited from an en-masse switch to home delivery services during the pandemic.
As our retail correspondent Zoe Wood reports, retail sales at Ocado, which now delivers Marks & Spencer groceries, jumped 35% to £2.2bn in 2020.
However the overall group, which includes its important tech business, Ocado Solutions, made a small loss of £44m.That compares with a pre-tax loss of £214.5m in 2019.
Tim Steiner, Ocado’s chief executive, said coronavirus has caused a “dramatic” shift in grocery retail and the landscape was “changing for good”.
Many customers who have tried online grocery for the first time have seen the benefits and are saying they are unlikely to revert to pre-crisis shopping habits.
The health crisis has seen demand for grocery deliveries rocket to account for 14% of the market. However Ocado was limited in its ability to take advantage of the huge increase as its robot powered warehouses were soon working at full pelt.
The company said sales growth in the coming year would be “highly dependent” on length of Covid-19 restrictions.
However it would have more delivery slots available in the UK in the coming months as three new hi-tech warehouses are set to open. It also plans to pour around £700m into new projects for its technology clients.
Oil on longest winning streak since January 2019
Oil prices are at their highest level in 13 months, and both Brent crude – the global benchmark – and WTI are on their longest winning streak since January 2019.
Brent futures are on their seventh session of gains, with prices currently up nearly 0.9% at about $61.10.
The rise has been chalked up, in part, to supply cuts by Saudi Arabia scheduled for both February and March, which is in addition to a reduction agreed by OPEC members and allies.
Both moves are restricting the amount of oil sloshing around at a time when Covid travel clampdowns are hitting demand.
But hopes around US president Joe Biden’s stimulus plans are also helping to lift prices. David Madden, a market analyst at CMC Markets UK, says:
Should the Biden-led government fast-track the spending programme that should spark higher demand for the energy in the months ahead.
Introduction: Bitcoin hits fresh record highs
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Bitcoin enthusiasts are celebrating a fresh jump in the cryptocurrency’s value. It rose further overnight after an initial surge on Monday, when Tesla disclosed its own $1.5m investment in bitcoin and said it is likely to start accepting it as payment for its cars in the future.
Bitcoin is now comfortably trading above $47,000, and briefly hit $48,000 this morning, marking a new record high. It is now trading around $47,700.
Some analysts are now patiently waiting for the next big push above $50,000, which could be driven by other major companies looking for alternative assets that can compensate for persistently low interest rates.
Naeem Aslam, chief market analyst at AvaTrade says Tesla’s bitcoin investment may be the start of a wider corporate trend.
Companies are holding big cash piles in their bank account, which is not earning them much at all. These cash rich companies do not know what they should do with their cash. Hence a new trend could be emerging, which has been put in motion by Tesla.
It is true that Tesla’s investment in Bitcoin is tiny compared to its market cap or its balance sheet. But the important point to pay attention to here is if other cash rich companies like Apple, Microsoft, Facebook also begin to invest their cash in Bitcoin as an alternative investment.
Even less than one percent of their cash in Bitcoin is going to be a huge amount. If this strategy becomes the main street, we could see some serious cash purchasing Bitcoin, and that can knock the supply equation out of its place—after all, there is only a limited supply of Bitcoin.
In stock markets, Wall Street closed at new all-time highs on Monday, with the Nasdaq ending higher by nearly 1% and the Dow and S&P 500 up by around 0.75%.
But Asian stocks have been mixed, with Australia’s ASX down 1.2%, the Shanghai Composite rising by 2% and Japan’s Nikkei up around 0.4%.
In the absence of any major events today, European stocks are expected to open in flat-to-negative territory at the start of trading:
IGSquawk
(@IGSquawk)European Opening Calls:#FTSE 6518 -0.09%#DAX 14050 -0.07%#CAC 5687 +0.01%#AEX 657 +0.05%#MIB 23449 +0.10%#IBEX 8215 -0.05%#OMX 2003 +0.01%#STOXX 3668 +0.06%#IGOpeningCall
The agenda
- 9am GMT: Italian industrial production (December)
- 11am GMT: US NFIB small business optimism index
