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Monthly review - December 2020

13 days ago

The Markets

3.7%

S&P 500

1.7%

EURO STOXX 50

3.1%

FTSE 100

0.6%

CAC 40

3.2%

DAX 30

-1.3%

BEL 20

0.8%

FTSE MIB

0.0%

IBEX 35

2.8%

TOPIX
   
 Source: Bloomberg 31.12.2020
 
       

Finally- the deal

Four years after the Brexit referendum, following months of intensive talks, a trade deal has finally been struck. Perhaps a fairly ‘thin’ deal, but the UK has accepted a commitment to ‘fair’ competition in order to secure a Free Trade Agreement with the EU. There could be tariffs at some later date if the UK strays too far from the EU’s level playing field. But in the meantime, these major trading partners could see little friction at their borders, for everything from food to pharmaceuticals, via manufactured goods and motor cars.

IPOs pop!

Cash was still plentiful and enthusiasm for IPOs (initial public offerings) remained unchecked. In the US, AirBnB and Doordash were met with a surge of buying, almost doubling in price in early trading. The companies represent the highly fashionable sharing or ‘gig’ economy, the one providing holiday rentals, the other home food delivery. But neither company recorded a profit in the year running up to their listing. Meanwhile in Japan, shares in Balmuda, maker of the $220 Toaster, popped up by 88% on the first day of trading.

Green carbon?

The price of carbon hit an all-time high. Or rather the price of the credits for the release of a tonne of carbon, which change hands on the EU’s Emissions Trading System. Heavily polluting companies, which beat their emissions targets, can sell surplus carbon credits to others who have missed their own. It’s an increasingly important yardstick. As part of its transition to clean energy, fossil fuel giant BP bought into Finite Carbon. The US company creates carbon credits by encouraging landowners to plant trees or refrain from chopping down forests.

 

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