Finimize - 🤓 Should you cash in on Coinbase?

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Today's big stories

UK retail sales were up in April, as Brits hit the bottle
Our analyst has looked into whether you should buy Coinbase now it’s fallen so far – Read Now
China slashed a key interest rate, as it tries to piece itself back together

Under The Influence

What’s Going On Here?

Data out on Friday showed UK retail sales unexpectedly jumped in April, then stumbled around a bit, then started a fistfight with a pigeon.

What Does This Mean?

After two consecutive months of declines, the number of goods sold in UK stores and online climbed 1.4% in April from the month before. That might not sound like much, but it blitzed the 0.2% drop economists were expecting at a time when inflation is at a 40-year high. Then again, the bulk of the gain was driven by an uptick in supermarket alcohol and tobacco sales. That not only suggests that the cost-of-living crisis is forcing Brits to entertain themselves at home, but that they’re plying themselves with liquor and cigarettes to sand the edges off this otherwise miserable existence. We know we are. Hic.

Why Should I Care?

Zooming in: Get used to this.
Economists haven’t been fooled by April’s retail rebound, arguing that things are only going to get worse – maybe even recession-worse – as Brits are forced to tighten their belts over the next few months. For one thing, the UK government has recently made the unsympathetic move of increasing both taxes and the limit on how much energy giants can charge customers. And for another, shoppers are forking out extra for just about everything: they spent 13% more than in a pandemic-free February 2020 last month, even though they only bought around 4% as many products.

The bigger picture: Recession warning.
Disposable incomes in Britain have now fallen almost as fast as they ever have done, which might be why data out last Friday showed UK consumer confidence fell to its lowest level in nearly 50 years this month (tweet this). It’s now sitting below an ominous level that’s generally preceded a big dropoff in household spending, which itself has gone on to lead to a recession.

You might also like: Brits have loads of savings. So what’s the catch?

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Analyst Take

Should You Cash In On Coinbase?

By Jonathan Hobbs, Analyst

Coinbase made its stock market debut amid the euphoria of a crypto bull market.

And now, just over a year later, this pioneering crypto exchange has found itself 85% lower than when it listed, after crypto has fallen well and truly out of favor.

Still, consider that Cathie Wood’s Ark Invest – which invests in innovative companies with massive growth potential – has recently bought $30 million worth of the company’s stock.

The question, then, is whether the company has enough cash coming through the door to make it worthwhile, and whether its regulatory efforts will pay off in the long run.

So that’s today’s Insight: how Coinbase’s fundamentals and technicals are looking, and whether it’s a buy.

Read or listen to the Insight here

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