It is Christmas Eve, which marks the beginning of what has traditionally been the best seven-day sprint for actions of the year – also known as “Santa Claus Rally”. So far, stock futures indicate a promising start for this ritual, but as this market still belongs to 2020 for a few more days, anything can happen.
One event that could happen before Christmas is a post-Brexit trade deal. Investors are also watching that $ 900 billion stimulus project that President Donald Trump has indicated he is unhappy about.
In our call of the day, which says get ready for 2021 and the “year of V.” It comes from Vincent Deluard, global macro strategist at the financial services group StoneX, whose collection of V’s includes a still-violent virus that leads to “one last scare of deflation in the first quarter.”
Deluard warns of the brutal first three months of the year in his December newsletter, predicting record COVID-19 infections and deaths and blockages on both sides of the Atlantic. He sees gloomy economic data for December and January triggering a sale of large cyclical gold and copper assets and central banks jumping to avoid deflation.
But then relief comes in the second quarter, with vaccines triggering pent-up demand, leading to rapid reflux. This occurs amid disrupted supply chains, demand returning to real goods, rising consumption due to record equity and low debt service costs, and then massive cuts in spending budgets for major oil companies, squeezing the oil market , he said.
Deluard’s great advice? “Investors should start to accumulate assets that are very cheap and sensitive to inflation now. However, it may be prudent to hedge cyclical risks with ‘anti-growth trade’ in the first quarter: purchased gold, health and yen against a short position [bearish] in oil futures, ”he said.
“In the second semester, investors should focus on the best reflux and reopening negotiations: Latin American stocks (without hedge) and the IBEX 35 index, respectively,” said the strategist.
Here are more of your V for 2021 – valuations will make a difference, value stocks will finally shine, volatility becomes the new normal, with the VIX or Cboe Volatility Index VIX,
which measures stock volatility, above 20 in most parts of the year. Below 20 generally means that the markets are not stressed. It also warns of vulnerable and overvalued bonds and many stocks, in addition to the bursting of the IPO bubble.
With that, dear investors, have a happy and secure little Christmas.
The markets
In half a day for the markets, YM00 stock futures,
ES00,
NQ00,
are bigger, with the European SXXP markets,
mixed. The GBPUSD pound,
is active and the FTSE 100 UKX,
down on Brexit’s business hopes.
Read: Here’s what a Brexit deal means for markets
Asian stocks ended higher, except in China as Alibaba BABA,
slid as regulators launched an e-commerce group’s antimonopoly investigation.
Read: Which markets are open and when on vacation
The buzz
A post-Brexit trade agreement between the UK and Europe may finally arrive, in the wake of the marathon negotiations.
There may be some good news about COVID-19, as two studies indicate that having the infection can protect against reinfection. This is because more than 1 million Americans have been vaccinated. Meanwhile, the United Kingdom is expanding its blockade as a second, even more contagious strain, believed to have originated in South Africa, spreads.
Square SQ digital payments group,
would have expressed interest in buying Tidal, Jay-Z’s music streaming service.
Nuro became the first California company approved to operate a driverless delivery business.
President Donald Trump issued more pardons on Wednesday, bringing the total to almost 50. Former campaign president Paul Manafort and Charles Kushner, the father of his son-in-law Jared are among the last beneficiaries.
The graph
Random readings
A digitally created queen starts dancing TikTok to emphasize deepfakes
A ‘dragon’ and a cure for cancer. What a mystic who predicted the 9/11 attacks said around 2021
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