Take Five: Deal or No Deal

Luis Klauskov, Dara Rana Singe, Tommy Wilson, Tom Wilson, Vidia Langanasan, Reuters

1 / Sticky Talk

The UK and the European Union are allegedly seeking to enter into a post-Brexit trade agreement that regulates their relationship after the transition period ends on January 1, 2021, six weeks later.

Diplomats say three issues remain, and EU leaders emphasize the need to prepare for no deal. The Brexit deadline has come and gone several times in the past, but the negotiators are making the final push and the consensus is that London and Brussels will reach some agreement.

GBPAnd UK stocks<.FTMC>The recent rise in COVID-19 vaccines and Brexit trading expectations have pushed assets up. They have the potential to ride rocky vehicles.

2 / Shopping signal

US shoppers are typically preparing for the holiday season kick-off event, Black Friday. But this is 2020. With the proliferation of coronavirus cases, it’s unlikely that consumers will be rushing to the store to get a bargain.

Oxford Economics expects holiday season sales to grow only 0.6% year-on-year due to the merger of COVID-19, lower revenues and a slump in the job market. Macy’s anticipates a tough time in the fall with potential sales declines of 20%.

All retailers are not pessimistic. Wal-Mart predicts a promising holiday season. Future earnings from Nordstrom, Gap and Dollar Tree provide more guidance.

Solactive-ProShares Bricks and Mortar Retail Store Index<.SOEMTYTR>Slightly outperformed this year’s S & P 500, in contrast to the 70% surge at Amazon, the winner of the curfew. -Wal-Mart predicts a promising holiday season as online sales surge-Will vaccine promises make US consumers feel like shopping? Retailers may have clues.

3 / PMI Pessimism

A flash reading of November’s business activities from Europe and the United States on Monday reveals how bad the damage caused by the resurrected coronavirus was and the restrictions imposed to contain it.

After bouncing off in the first COVID-19 trough, Global PMI is tinkering with about 50 again. This is a barrier between expansion and contraction.

The hit is less serious, the restrictions are less stringent, and companies are better prepared. But if the market’s reaction to US data, which is weaker than the latest expectations, can’t be helped, investors will be cautious until vaccines are deployed, Western fiscal stimulus is confirmed, and there are signs of a rebound. There is a possibility. It has taken root.

4 / won watch

Koreans are watching over the currency appreciation. When the Bank of Korea meets Thursday, no one expects to do much about record low interest rates already.

Instead, the central bank wonAttention is focused on the currency market, which is believed to sell and prevent it from reaching $ 1,100 per dollar. This can be distressing to the economy riding on high-tech exports.

Other countries face a similar dilemma. Asia’s rapid recovery from the pandemic and higher yields, combined with a slower pace of investment and imports, are creating a balance of payments like the Goldilocks, a currency tailwind.

Thai and Chinese authorities are also actively massaging the baht and yuan rise. Indonesia and the Philippines took advantage of the opportunity to implement a surprising rate cut this month.

5 / A little more?

Bitcoin has skyrocketed by more than 150% this year, close to 2017’s record of about $ 20,000. Many expect the rally to end in tears, as it did three years ago when Bitcoin crashed 50% within a month.

Others are different. Citi analyst Tom Fitzpatrick predicted that Bitcoin would exceed $ 300,000 within 12 to 24 months. Bitcoin fans cite improved market infrastructure, increased presence of mainstream investors and increased liquidity as reasons to believe the rally is a stepping stone.

Bitcoin supply is capped while the central bank is in full money printing mode. However, it is still a volatile, retail-dominated market, poorly regulated, and frequently hacked. For now, the bull appears in the command.