Must read: FTSE 100, bitcoin, Persimmon, Greggs

GLOBAL MARKETS

The FTSE 100 is under pressure, despite gains for the CAC, and FTSE MIB. An update from Sainsbury (J) (LSE:SBRY) has pushed the stock to the bottom of the FTSE 100, with Tesco (LSE:TSCO) and Marks & Spencer Group (LSE:MKS) suffering amid the read across for the sector.

But housebuilders like Berkeley Group Holdings (The) (LSE:BKG), Barratt Developments (LSE:BDEV) and Taylor Wimpey (LSE:TW.) are in the green following an encouraging update from Persimmon (LSE:PSN).

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BITCOIN 

It was a volatile night for bitcoin which initially surged on the back of a fake post on the SEC’s official X account suggesting that the regulator had approved a new crypto exchange-traded fund (ETF), a ruling the market is hotly anticipating as soon as this week.

Bitcoin later pulled back and is currently down by over 1% against the US dollar. Year-to-date it is already up over 7%, fuelled by hopes of the ETF approval and it is up by more than 160% over the past one year. 

While there are reasons to be optimistic towards the outlook for bitcoin such as the potential regulatory approval of a bitcoin ETF as well as the halving event, cryptos are notoriously volatile. While investors can make impressive gains, they can also be left nursing painful losses.

PERSIMMON

Persimmon built 9,922 new homes in 2023, ahead of expectations for 9,500. Private average selling prices rose by around 5% to £285,770 last year and current forward sales increased by 2% to £1.06 billion. 

After a painful period for the sector following 14 straight rate hikes from the Bank of England, coupled with elevated cost inflation pressures, Persimmon has started to enjoy a reprieve with mortgage rates finally easing and build cost inflation moderating. With the central bank anticipated to cut interest rates later this year, mortgage rates are likely to ease further this year, driving buyers back to the housing market as affordability pressures come down. House prices nonetheless are likely to remain under pressure amid the tighter monetary policy backdrop and the risk of a recession this year, and Persimmon warned that market conditions remain uncertain. 

But there are green shoots of hope emerging in the sector that investors have been clinging to in recent months, sending shares in Persimmon higher by around 45% over the last half-year. The stock is outperforming in today’s trade, helped also by a vote of confidence from JP Morgan which raised its price target on Persimmon from 1,030p to 1,120p.

GREGGS 

Greggs (LSE:GRG) reported like-for-like sales up 9.4% in the fourth quarter. Full-year total sales rose by 19.6% to £1.81 billion, ahead of forecasts for growth of 18.1%. Shares in Greggs are surging today, extending gains off the October lows, helping to reverse some of the declines from the highs at the start of May.

Investors are cheering its impressive period to wrap up the year, with strong demand for its festive products such as the Christmas lunch baguette and the Festive Bake, partly thanks to fun marketing with the return of Greggs’ own novelty Christmas jumper. It is also benefitting from the recent disinflationary trajectory that has helped to reduce its cost pressures.

Its low price point makes Greggs resilient to the macroeconomic headwinds, cost-of-living pressures, and the consumer slowdown. Its range of value hot and cold comfort food and drinks appeal to a wide customer base including a vast number of workers who are on the move throughout the day.