WEEKLY BUSINESS ROUNDUP
Global Business Week: The World’s Largest IPOs adjusted for Inflation
The state of Financial markets & Economies, Weekly Charts, Business Trends & Statistics
Despite a disappointing Jobs report out of U.S for November, the Equities ended a second week in gains. The investors probably still saw an increase of 245,000 jobs (against the expected 450k) in the largest economy as a healthy sign towards a full recovery down the road — driven mainly from the vaccine optimism and hopes of another stimulus package getting approved sooner rather than later. Oil and energy stocks led the market gains like they have been doing whenever investors decide to bet on the recovery rally. When they get fearful, they head towards tech stocks, gold, and Bitcoin.
One asset that has consistently slid since the end of September is the Greenback — the reserve currency and risk hedge during times of uncertainty. Seems like a fundamental shift is taking place in this narrative as further the Greenback falls, the higher Bitcoin goes. The inverse relationship is in full swing among the two. The dollar index closed a shade above its lows of 90.47, at 90.81.
Talking about Bitcoin, the premier digital asset, Bitcoin, continues to consolidate just below its recently charted high — a whisker below the psychological level of $20k, with everyone watching ever so intently. The bigger question arises, what next after it hits that level? Sky could be the limit as BTC enters unchartered territory. For now, it is trading just above $19k and looking solid above the immediate support around $16,200 — the most recent low.
In today’s highlighted infographic (above), Visual Capitalist took the 25 largest global IPOs by nominal offering size as tracked by research firm Renaissance Capital, and adjusted them for inflation to October 2020 dollars. More big-name IPOs are still on the horizon with both Airbnb and DoorDash slated for launch this week. It also shows the recent trend of tech IPOs outnumbering and out-hyping the competition, with software leading the way.
Before moving to some of the other interesting statistics of the week, here is a list of asset classes with YTD total return (Figure 1).
The Pandemic’s misleading Effect on U.S. Wages
According to the latest biennial Global Wage Report by the International Labour Organization (ILO), the ongoing pandemic crisis has put downward pressure on wages in two-thirds of the countries observed, with women and low-wage workers particularly affected. However, figures published by the Bureau of Labor Statistics in the U.S shows that wages jumped at the onset of the pandemic and remained elevated ever since (Figure 2). And while that may look like a positive development, it’s actually a sign of an even deeper crisis compared to countries that saw wages slump in recent months.
Chinese Recovery Will Not Be Stopped
According to the November Caixin China PMI survey, manufacturing in China has raged on despite all 2020 has thrown at it and the expansion in the sector has now reached a pace not seen in a decade (Figure 3). Output (supply) and new orders from overseas and domestic (demand) saw the strongest improvements since Nov. 2010. The reading was 54.9 last month, up from 53.6 in October. The sector has seen growth (a reading above 50) in each of the past seven months, indicating a sustained and strong recovery.
Australian & China at Odds
Turns it the U.S is not the only country having economic problems with China. The latter is the biggest export partner for Australia, expanding trading between the two countries ever since the Free trade agreement signed by the two in Dec. 2015. A political decision taken in 2017 by the Australian government has not turned into a full-blown trade rift between the two as highlighted by the infographic below (Figure 4).
Top 30 Real Estate Cities in America
According to real estate tycoon Harold Samuel, there are three things that matter when it comes to real estate value — location, location, and location. America’s property market is no exception to this rule. Depending on the city and its location, there are vast discrepancies in real estate value across the country. Using the latest data from LendingTree, this infographic (Figure 5) ranks the top 30 most valuable real estate cities in America.
Growing Chinese IPO interest in U.S Capital Markets
According to the U.S.-China Economic and Security Review Commission, the market cap of the 217 Chinese companies listed on U.S. exchanges is $2.2 trillion as of October 2, 2020 (Figure 6)— among them are high-profile tech stocks favored by Wall Street like Alibaba Group, JD.com, Baidu and NIO. There are a total of 13 state-owned firms, including PetroChina Company, China Life Insurance Company, and China Mobile Limited. This is in focus because the U.S. Congress just passed a bill that forces all foreign companies listed on U.S. exchanges to declare if they are owned or controlled by a foreign government, to submit to U.S. financial audits in accordance with U.S. federal law at least once every three years.
Which Industry Boasts the Most Billionaire Wealth?
The pandemic enabled those well equipped to pivot towards the new environment and business landscape, while those without these advancements were forced to haphazardly adjust. As a result, billionaires in the technology and healthcare industry have reaped great rewards. Between April-July 2020 these two generated $164.8 billion and $145.7 billion respectively (Figure 7). The infographic shows the two leading industries building a considerable spread between them and those lagging behind. As these innovative technologies become mainstream, it may suggest the other industries will have the chance to catch up.
Investors still bullish as BTC price rises
According to Chainalysis Market Intel, there has been a large increase in bitcoin sent at a 25% or more USD gain in recent weeks as the price has climbed. However, this previous week, the amount has dropped despite continued price gains (Figure 8). This move is in contrast to what happened in February and August of this year when high levels of cashing out were accompanied by price falls. Although there is profit-taking going on at current price levels, it is not enough to put downward pressure on the price.
Market Humor: Greenback headed South
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