WEEKLY BUSINESS ROUNDUP
Global Business Week: The Best and Worst Performing Sectors of 2020
The state of Financial markets & Economies, Weekly Charts, Business Trends & Statistics
Despite a disappointing December jobs report out of the U.S, the equities still managed to eke out a weekly gain. This accompanied by the highest rate of daily COVID-19 deaths in the U.S. so far, was not enough to dissuade the investors from buying stocks. Having said that, more money is moving into cash and bonds than stocks lately. None of these risks, however, have managed to stop the major equity markets from pushing to all-time highs.
Talking about cash, it has been a while since the Greenback posted two daily green candles. The reserve currency has been under relentless pressure from the bears lately, which seems to be taking a break right now. The dollar index is still far from recovery mode. The move-up looks constructive as the index seems to be finding some support near levels last seen almost three years ago. More stimulus from the U.S government might throw cold water on this recovery.
While the top fiat currency struggles to find traction, №1 digital coin is hitting one record after the other. Over the weekend so far, top crypto Bitcoin has pierced the $42k price level, as the crypto bulls now eye the psychological barrier of $50k for BTC. Institutional investors have joined the Bitcoin wave in a big way — pumping millions into it. A limited supply of the crypto kingpin is putting even more upwards pressure. At the same time, the second-largest crypto Ethereum has crossed $1300 as it rapidly approaches the previous ATH.
2020 was an abnormal year in so many ways —it saw the quickest and deepest bear market decline in history, trillions of dollars of global stimulus, the highest volatility (VIX) on record, negative oil prices, and the fastest recovery from a bear market ever. But equity investors ended the year in black & today’s feature infographic (FinViz treemap) above highlights the best and worst-performing sectors for 2020.
Before moving on to some of the other interesting statistics, here is the YTD performance of Asset class returns (Figure 1).
Tesla almost meets is delivery Goal
Having shot for the moon with its goal to deliver 500,000 vehicles in 2020, Tesla nearly stuck the landing, missing its target by just 450 cars. According to its latest update on quarterly production and deliveries, the newly-minted S&P 500 company delivered 499,550 vehicles in 2020, up from 367,500 a year earlier (Figure 2). Meanwhile, production exceeded half a million vehicles for the first time after Tesla built a record number of 180,000 cars in the fourth quarter alone. No wonder the pioneer Electric car maker’s stock has made Elon Musk the richest person on the planet.
Equity quants struggled in 2020
According to Bloomberg, in the war of man and machine, stock pickers triumphed last year (Figure 3). It noted that human-run hedge funds beat those relying on a quantitative analysis involving complex software programs. Among the top 10 winners by returns in 2020, only one quant hedge fund made it — the High-Flyer China Equity Fund.
U.S Manufacturing Output slowly climbs back up
Despite the latest surge in coronavirus cases across the country, the U.S. manufacturing sector continues to rebound from the initial shock brought about by the lockdown in spring. According to the Census Bureau’s latest report on Manufacturers’ Shipments, Inventories, & Orders, new orders for manufactured goods in November were up 1% over revised October figures (Figure 4), marking the seventh consecutive month of positive sequential growth.
Why Gold stocks excel in Gold Bull Markets
Gold is known for its resilience during economic downturns and its handsome returns, but during gold bull markets, there’s something else that regularly provides even greater returns — the ownership of gold mining stocks. Over the past 20 years, gold mining stocks have outperformed the price of gold bullion in bull markets, offering what can be seen as a leveraged play on gold’s price appreciation. The infographic from Sprott (Figure 5) compares the returns of gold stocks and gold bullion in bull markets. It also explains how gold stocks outperform, thanks to profit expansion & shows why there might be more upside for gold miners to come.
Bitcoin aggregate futures volumes hit $100B
Bitcoin aggregate futures volumes hit $100 billion for the first time (Figure 6), according to market data provider Skew. The cryptocurrency’s options open interest has reached $10 billion, double its value in mid-December, as investors remain divided on the digital asset’s worth and promise. The price of Bitcoin has crossed $42k at the time of writing with the collective market cap for all cryptos coming in at $1.1 trillion, of which $757 billion is contributed by Bitcoin.
World Economy to Trail Pre-Pandemic Trajectory
The World Bank’s Global Economic Prospects report provides us with an updated look at the coronavirus pandemic’s effect on the world economy. Striking a cautious tone, the report finds that global economic output will likely remain below its pre-pandemic trend for a protracted period. While the WB’s economists have adjusted their 2020 forecast for global GDP growth from -5.2% to -4.3% accounting for early signs of recovery, their outlook for 2021 has worsened at the same time, due to the lingering effects of the pandemic (Figure 7).
Previous Edition of GBW
How did the financial markets, different sectors & assets perform in 2020?
Visualizing the yearly statistics of Financial markets & Economies, Assets & Businesses