Top Reads this Week (27 Dec)

Singapore investors remain cautious on cryptocurrencies, but more firms seeing benefits: Experts (CNA)

Bitcoin hit all-time highs just a few days ago, topping US$24,000 for the first time ever. But not everyone in Singapore is eagerly cashing in on the meteoric rise of various cryptocurrencies. Experts say it’s mostly institutional players and firms that see the benefits of such digital assets beyond their price. 

Singapore malls packed with shoppers despite call for caution in lead-up to phase 3 (Straits Times)

The Government has warned against complacency during the festive season, with Education Minister Lawrence Wong noting last Monday the concern that “there will be groups of people who let their guard down. Prime Minister Lee Hsien Loong also said this was “absolutely not the time to relax” or imagine “that the problem has disappeared”. On Saturday afternoon, even as it was revealed that 13 people on stay-home notice at the Mandarin Orchard Singapore hotel might have been infected there, malls in the area were packed.

A ‘long-term top’ is taking shape in the market, and these stocks could bear the brunt, investor warns (Market Watch)

“Renewable froth” is a prevalent theme in the current equity bubble, he explained, considering the wild performance of highfliers Plug Power PLUG, +1.26%, Nio NIO, -1.20%, Enphase Energy ENPH, +1.72% and, of course, Tesla TSLA, +0.88%. “Not only are renewables trading at sky-high valuations, but price-to-sales ratios in growth stocks as a whole are now above their 2000 peak,” Palmer wrote.

And it’s not just top-heavy renewable energy stocks that have Palmer concerned. He warned that S&P 500 index’s Relative Strength Index, an technical indicator of momentum used to determine overbought or oversold conditions, suggests trouble ahead for the bulls.

“Just like the dot-com peak, the quarterly RSI in the Index has been fading lower for a few years (loss of momentum), while the S&P 500’s price has hit new highs, this is MEANINGFUL bearish divergence,” he wrote. “In our view, we are close to a long-term top.”

No sign of a top in Wednesday’s upbeat trading session though, with the Dow Jones Industrial Average DJIA, +0.38%, tech-heavy Nasdaq Composite COMP, -0.29% and S&P 500 SPX, +0.07% all moving nicely higher ahead of the Christmas holiday.

‘Santa Claus’ rally starts Thursday? Why few 7-session stretches are better for the stock market (Market Watch)

Treasury yields rise amid mixed economic data, Brexit deal optimism (CNBC)

Treasury yields held steady on Wednesday as investors digested a mixed bag of economic data as well as signs of an imminent Brexit trade deal between the U.K. and the European Union.

The yield on the benchmark 10-year Treasury note rose 3 basis points to 0.956%, while the yield on the 30-year Treasury bond traded 4 basis points higher at 1.696%. Bond yields move inversely to prices.

Dr. bitcoin? Goldman says cryptocurrency’s meteoric rise is tracking a key proxy for global growth (CNBC)

• Bitcoin and copper prices have both been on a tear for most of this year, hitting record-highs amid the ongoing coronavirus pandemic.
• Copper — sometimes dubbed Dr. Copper — has a reputation among market watchers as a barometer for the global economy.
• The base metal is viewed in this way because of its broad range of end-uses — both in construction and in consumer products such as cars and consumer appliances.

JPMorgan closes bullish call on base metals as Chinese credit cycle slows (CNBC)

• JPMorgan has turned “neutral” on base metals, which include copper, aluminum, nickel and zinc, and now forecasts that copper will deteriorate from an average of $7,700 per ton in the first quarter of 2021 down to around a $6,500 per ton average in the fourth quarter.
• “Our analysis shows that a slowing in Chinese credit over the course of 2021 will turn into a drag on base metals prices that will likely outweigh continued recovery in the rest of the world,” JPMorgan commodities analysts said in a quarterly outlook report.

Hang Seng proposes major overhaul of Hong Kong stock index (Straits Times)

Hang Seng Indexes is considering wide-ranging changes to Hong Kong’s stock benchmark that would dilute the influence of its largest companies. The five proposals include maintaining “a certain number of constituents classified as Hong Kong companies”, according to a 16-page consultation paper released Tuesday (Dec 22). Hang Seng is also considering increasing the number of members to between 65 and 80, as well as capping weightings at 8 per cent and fast tracking new listings. The index currently has 52 stocks with weights limited to 10 per cent. Secondary listings or shares with unequal voting rights are capped at 5 per cent. The sweeping proposal comes amid significant changes within the city’s stock market, as a wave of Chinese megacaps choose the financial hub as a preferred venue to sell shares.

Hong Kong stocks end losing streak as Xiaomi hits record high, investors weigh US stimulus outlook (SCMP)

• Hang Seng Index ended a three-day losing streak with Xiaomi closing at a record high, while Covid-19 cases continued to rattle investors
• Trump signaled opposition to US$900 billion economic stimulus package approved by bipartisan lawmakers in a tweet

Alibaba shares fall after reports of anti-monopoly probe by China (CNBC)

• Shares of Alibaba fell as reports surfaced that the Chinese government is conducting an anti-monopoly probe into the tech giant.
• China’s State Administration for Market Regulation said through official online channels Thursday it has opened an investigation into Alibaba over monopolistic practices.
• The news comes on the heels of an increasing — and largely unexpected — push by Chinese authorities to rein in their biggest tech firms through regulatory action.

A Very COVID Christmas: The Pandemic’s Impact on Festive Spending (Visual Capitalist)

Given consumers’ concerns over the future of the economy, they are expected to reduce spending during the festive season. In the U.S. for example, spending will decline by 7% to $1,387 per household. When it comes to how consumers plan to spend their hard-earned cash, some interesting insights emerge. As many have saved significantly on socializing and travel—which is down 34% year-on-year—they plan to put this money towards items for themselves instead of gifts and gift cards for others. These items include clothes, at-home entertainment, and home furnishings. It therefore comes as little surprise that the global online home decor market is estimated to grow at a compound annual growth rate (CAGR) of almost 13% between 2020-2024 with revenue of over $80 billion. Almost 60% of UK consumers said that they will be shopping online more this Christmas.

803,000 Americans file first-time jobless claims in week before Christmas (Axios)

Driving the news: The report comes a day after President Trump suggested he may not sign Congress’ $900 billion coronavirus relief bill, potentially delaying desperately needed aid for millions of Americans.

• The bill includes an extension of two pandemic-related unemployment programs, used by 14 million Americans, that expire on Dec. 26.
• 397,511 people filed for benefits last week under the Pandemic Unemployment Assistance program, which provides subsidies to those who aren’t normally eligible for unemployment benefits.
• Trump’s threat runs the risk of worsening the country’s economic recovery and increases the chances of a government shutdown during the pandemic.

The bottom line: Although the number of unemployment claims was less than expected, it is another sign that the country’s job recovery still has a long way to go to recover to pre-pandemic levels.

Adelson’s Singapore Casino Paid a Price for Courting China’s ‘Whales’ (Bloomberg)