Good morning and welcome to the IC's Markets Live blog, where we run down the major news stories of the day and what they mean for your investments.
Government ad spend surges on Covid
“Hands, face space”. Unless you have been living in a cave, devoid of all contact from the outside world, the government’s Covid-19 mantra is likely to have a very familiar ring to it. Funnelled through YouTube, constantly on the television, splashed across public transport, Boris Johnson and his team have wanted the UK to make sure we all know how to keep safe during a pandemic.
But this relentless education hasn’t come cheap. An exclusive IC investigation has revealed that £352m of government funds was funnelled into advertising and marketing in 2020 - 165 per cent more than the £133m spent during 2019, when ad spend was also boosted by the government’s “Get Ready for Brexit” campaigning. That has proved a welcome boost to the international giants of the advertising space as Oliver Telling and Lauren Almeida explore here.
Advertising has been a big theme for Britain’s media companies as well. Namely Future, whose financial results yesterday reveal a switch in the direction of travel. Alex Hamer explores why the move to an ads-fuelled e-commerce model is beneficial for the company here.
What’s in a share price?
Future’s (FUTR) shareholders certainly like the look of the new strategy, sending the share price up 160 per cent in the last year. But is that fuelled by rising profits or greater investor appetite for the shares which has sent the valuation higher? Phil Oakley explains why it is important to know the difference in this week’s Analyst column.
But carefully analysing share price movements of individual companies doesn’t tell you all you need to know about stock market investment, certainly not in a time of great turbulence.
Crystal ball time
For a more rounded approach to investing, it’s good to look at prevailing economic conditions. Easier said than done, I hear you say, especially with the distraction of bitcoin (which plunged as much as 25 per cent yesterday), but Algy Hall has been taking lessons from “the smart people at small-cap quant firm Verdad Capital” who believe there is a trick that allows them to make a good guess about what the prevailing economic conditions in the US will be in the coming three months. Read his free column here.
Crypto roller coaster ploughs on
Another stomach churning day’s trading for cryptocurrency investors yesterday with the prices of several ‘coins’ whipsawing around. Bitcoin plunged as much as 30 per cent at one point before some support kicked in. This is turning into a potentially bitter fight between the crypto diehards and, among others, more traditional investors, governments and regulators. The weight of the Chinese government’s move against cryptocurrencies on Tuesday is considerable and has sent shockwaves through the markets - read James Norrington’s analysis of what this could mean for the future of decentralized finance.
Join the discussion in the blog below where we have analysed all of today’s top news stories.
