Aberdeen Standard Investments | 2020 was another year of stunning technology sector outperformance. Several of the largest firms have shot through US$1 trillion in market capitalisation. Apple is now worth over US$2 trillion. With the outcry over unfair competition and unethical behaviour growing louder, how much longer can the big US technology companies escape regulation?
Scope Ratings | The credit outlook for the integrated oil & gas sector has improved to stable from negative on improved price assumptions and companies’ decisive action to shore up their balance sheets last year. However, a weaker-than-expected economic recovery from the recession brought on by the Covid-19 pandemic and strategic challenges, such as tougher environmental regulation and peaking oil demand, are potential threats to credit quality. These are the main trends we expect for integrated oil and gas companies in 2021.
Pablo Pardo (Washington) | According to the so-called ‘Bork Doctrine’, a company that has a dominant position in a market can benefit consumers. The Democratic Party has always been more reluctant to accept that thesis than the Republican Party. In recent years, that opposition has become tougher. So one would think that both for purely political reasons – to please the left wing of the Democratic Party – and for ideological principles – that opposition to the control of big business – Biden will not pass up the opportunity to trim the quasi-monopolies of the Internet giants.
By Catalina Margulis & Arthur Rossi (IMF) | Countries are moving fast toward creating digital currencies. Or, so we hear from various surveys showing an increasing number of central banks making substantial progress towards having an official digital currency. But, in fact, close to 80 percent of the world’s central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is not clear.
Keith Wade (Schroders) | Some investors are growing worried that inflation is set to rise. How worried should investors be? Is there something unique about the Covid-19 shock which makes inflation more likely? We can see three areas of concern that could be routes to higher inflation: it could already be higher, it is just not being measured properly; the build up of liquidity could represent latent demand translated into inflation and the adverse structural effect of Covid-19.
Attention will be particularly centred on the discussion of QE tapering. Previous comments by regional Fed members Bostic and Kaplan stoked markets into pricing in the possibility of bond market support fading by year-end. When combined with news of an additional $1.9trn fiscal stimulus package being floated in Washington, this resulted in rising 10-year yields, which has been one driver of the USD rebound witnessed at the beginning of this year. A quicker vaccination campaign being rolled out since December has also added to a brighter economic outlook, bringing the discussion of policy normalisation to the table.
S.Gyorgy, D.Picarda, F. Xydas and S. Wieting (Citi GPS) | The art market has remained resilient in 2020 amid the turbulence brought on by the coronavirus pandemic. Rapid digitization in response to the crisis is laying the foundation for a deeper, more permanent shift as the industry adapts to changing preferences and demographics. Meanwhile, cultural institutions are addressing wider calls for social justice and taking steps towards greater inclusion.
Sonia Katyal | Countries around the world, including India, are sponsoring initiatives like innovation hubs to stay on top of and engender tech-driven progress on desirable lines. That should ultimately lead to enriching financial lives across the world and perhaps even open the gates for poverty reduction strategies that were hitherto not imaginable. Such is the promise of the financial revolution that lies ahead if the regulatory waters are navigated well.
Intermoney | China surpassed its economic growth previous to the health crisis. Specifically it recorded 6.5% per year in Q4’20, when in the same period in 2019 it grew by 6%. Thus guaranteeing China’s rapid recovery, while also highlighting the country’s margin for facing up to any temporary turbulence linked to the resurgence of COVID-19. Furthermore, China would encourage the population to continue working to limit the number of people returning to their places of origin during the New Year celebrations.
Jinyoue Dong & Betty Huang (BBVA Research) | Vaccination, accommodative monetary policy with “no sharp turnaround”, possible alleviation of China-US tension under Biden’s presidency and deflationary environment give Chinese authorities a chance for a short respite in 2021.