Olga Cam and Mohammad Rajjaque via The Conversation | The travel and tourism industry is hopeful for a much faster recovery than other market segments. There are two reasons for this: first, there is a psychological demand for travel and holidays after a very long lockdown. Second, the availability of cash. The Airbnb IPO seems to be boldly positioned right at the expected beginning of the recovery in Europe and the improving market conditions encouraged last minute share issue price.
In the World
José Ramón Díez Guijarro (Bankia Estudios) | In the more recent past, the central banks have had enough to deal with trying to combat the risk of deflation linked to the structural changes of recent decades: globalisation, ageing population, digitalisation, etc. And now, practically without any solution of continuity, they have to face a crisis which may lead to new permanent “shocks” in inflation. These would derive from changes in the consumption patterns and from the accelerated digitalisation process. Or from the intensive use of non-conventional monetary policy measures.
Clàudia Canals and Jordi Singla Caixabank Research | The new technology restrictions that the US has imposed on China represent an escalation of the decoupling policy pursued by the current US Administration. Although the distancing between the two powers has a long history, under Trump’s presidency it has become a fully-fledged conflict.
Morgan Stanley | The global manufacturing PMI moderated in November to 53.7 after reaching the peak in October (54.3). Even so it is still above the last 10 years average. In addition, 86% of the PMIs that make it up are still in expansion territory.The PMIs are sequential indicators so it is quite normal to see this moderation after the strong rebound. As for services PMIs, the Eurozone’s main economies saw it fell back to levels below the 50-point threshold. The biggest drop was in France, the lower in Spain.
Many governments have committed to a net-zero carbon pledge, and many more should follow. In total, 26 countries now, or are about to, have a net-zero carbon pledge set in law and many others are currently discussing potential targets. However, only 11 governments have already launched sovereign green bonds. AXA IM expect this figure to grow as an increasing number of countries are due to put their words and commitment into action and investments, which are likely to be financed through green bonds. After Germany, Hungary, Sweden and the Netherlands launching theirs over 2020, Italy, Spain and the UK have already pledged to issue a green bond next year and certainly many others are likely to follow.
Alphavalue | Against growing environmental constraints, as well as an uncertain perspective on hydrocarbons, oil companies are modifying their strategy. The electrification of the energy mix appears as an opportunity for the mutation to integrated energy companies. The big oil companies want to be a part of the growing market of renewable energies, but they will compete against the powerful utilities.
Intermoney | In the first nine months of the year, according to the Institute of International Finance (IIF), which represents a sort of international banking association, global debt has increased by $15 trillion and is likely to exceed $277 trillion by 2020. Thus, at the end of this year, the world debt would amount to 365% of GDP, compared to 320% at the end of 2019, along with the high figures in developed countries that are only possible due to the role of last resort lender of their central banks.
Chinese equities are responding positively to the macro tailwinds. The S&P China 500 Index – a diversified index which includes both onshore and offshore listings – is up nearly 31% year-to-date. This compares to the S&P 500 Index which is up around 13% over the same period. These are encouraging signs for those interested in Chinese equities – strategic and tactical investors alike.
Viswanathan Parameswar (Schroders) | For a look into the future of the global economy, and where the power is shifting, consider technology developments in both China and India. In a mere decade, China’s e-commerce market has grown from less than 1% of global sales, into the world’s largest market in 2016, representing more than 40% of transactions by value. Meanwhile, India’s adoption of mobile technologies is surging at an astonishing rate as Reliance Jio – which became India’s dominant tech firm virtually overnight – brings fast connections to India’s 1.3 billion people.
Jamie Merisotis | Changing the trajectory of inequality to build a more just and open society isn’t an insurmountable challenge. Indeed, if 2020 has taught us anything, it’s that massive change can come very quickly. Now is the time to work toward such change. We can do that by applying the three interrelated aspects of human work — learning, earning and service to others — toward reducing economic and social inequality. Indeed, our only way to eliminate these inequities is to ensure that everyone has the capacity and opportunity to do human work.