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Illustration: Sarah Grillo/Axios
Investors are scrambling to get their hands on next-generation meatless and agrifood technology companies, but the past couple of years have proven very lucrative for old-fashioned fast-food chains.
Why it matters: While legacy brands like Kraft Heinz and Campbell's are losing market share as consumers' tastes and shopping habits change, fast-food legacy names like McDonald's and KFC/Taco Bell owner YUM! Brands are seeing all-time high stock prices.
By the numbers: Restaurant stocks have outperformed the S&P 500 by 13% over the last 12 months and valuations are up 16% year over year, analysts at Goldman Sachs said in a Monday note to clients.
The big picture: Even better for investors, "fundamentals are accelerating," Goldman analysts say, calling for 28% upside for Chipotle's stock — it touched a record high just last week — to $1,000 a share.
Between the lines: The fast-food industry's biggest tailwind is coming from a surprising source — the increased pay of low-wage workers.
Be smart: Goldman's research team estimates 70% of the industry's sales growth over the past 5 years can be explained by rising wages, lower gas prices and a boost from third-party apps like GrubHub and Uber Eats.
Currency traders are aggressively pricing in a no-deal Brexit scenario after remarks over the weekend from the U.K.'s new leadership coalition, headed by Prime Minister Boris Johnson, and are selling the pound as a result.
What's happening: Michael Gove, who is in charge of planning for a possible no-deal exit from the EU, has said the British government is "working on the assumption" that it will leave without a deal.
What they're saying: "The new UK government wants to show its determination to leave the EU without a deal in less than 100 days to bolster its negotiating position," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note to clients.
Long seen as a straightforward calculation, more research is beginning to show that controlling inflation is quite complicated, WSJ's Paul Kiernan writes.
What's happening: "Recent studies have shown prices in some sectors—such as housing—do indeed rise faster when growth is in full swing, unemployment low and markets frothy. But a large chunk of the economy, from health care to durable goods, appears insensitive to rising or falling demand."
Why it matters: "The Fed influences inflation by lowering rates to spur demand or raising them to curb it. The new research suggests that to lift overall inflation the Fed may have to stimulate larger price increases in sectors where the Phillips curve still exists to compensate for subdued inflation in those where it doesn’t."
Ryanair, Europe’s largest low-cost airline, reported a 21% drop in after-tax profits for the first quarter, blaming fierce price competition and higher fuel and staff costs.
The big picture: The company also warned job cuts may be coming and future growth projections may be lowered because of issues with U.S. airplane manufacturer Boeing.
Ryanair ordered 58 of Boeing's 737 Max jets for summer 2020, but that order may change since all of the planes have been grounded following 2 fatal crashes.
“It may well move to 20, it could move to 10, and it could well move to zero if Boeing don’t get their shit together pretty quickly with the regulator."— Ryanair CEO Michael O’Leary on the company's earnings call
The worldwide grounding of the 737 Max is now in its fifth month, and FAA regulators have yet to say when they will allow the plane to fly again.
Axios' Courtenay Brown writes: Just as the Fed seems poised to announce the first interest rate cut since the financial crisis, President Trump took his feud with the central bank one step further, saying it "has made all the wrong moves."
Why it matters: Even though Trump may have gotten everything he's wanted from the Fed so far, he is pushing for even more. On Monday, he tweeted: "A small rate cut is not enough, but we will win anyway!"
Trump has used the Fed as a scapegoat, asserting how much stronger he thinks the economy would be if the Fed had halted policy tightening.
The bottom line: "If the market thinks that the Fed is just going to do whatever Trump wants, this could have very serious consequences," Brian Rose, an economist at UBS, tells Axios.