FAANG stocks fail to shine last week despite NASDAQ’s jump; 3 of the 5 big tech shares tumble

The holiday-shortened previous week saw the NASDAQ index gain 1% overall, after having suffered a steep fall during the initial hours of trade on Monday morning. The star constituents of the index — the FAANG stocks — witnessed a mixed bag of a week, with some gaining and others losing. So far this year, FAANG stocks have gained 50% on average, outperforming the benchmark NASDAQ index. Apple has been the best stock so far this year among the big-tech names that make up the FAANG stock list.

Facebook in the previous week registered a 3.3% fall as it failed to recover after Monday’s fall and only added to the losses. At the end of the trading session Thursday, the stock was quoting a price of $267.4 per share. During the week, reports claimed that Facebook has shut one of its intellectual property units in Ireland. The unit was claimed to be a tax-saving mechanism used by the social media behemoth. Another news around Facebook that hogged the limelight this past week was the news of Mark Zuckerberg selling 44,750 shares of the company for a total amount of $12.2 million.

The manufacturer of the iPhone, Apple, had a way better week than Facebook as stock price gained 4.2%. This stock movement came in a week when reports claimed that the company was planning to make electric vehicles by 2024. The news of Apple preparing to launch a car by 2024 was reported by Reuters, they said it is most likely the passenger car of the company will be powered by its own battery technology. Stocks of the technology giant closed at $131.97 per share last week.

Amazon was also one of the laggards in the previous week. Jeff Bezos’ firm saw it stock price slip 0.90% in the week to close at $3,172.69 per share. Streaming service Netflix was also in the red last week, slipping 3.7%. The Co-CEO of the frim, Reed Hastings has sold 437,311 shares of the firm this month for $527 per share, according to reports. The total stake sale value was $230.6 million. This comes less than a month after Reed Hastings had sold over 213,000 shares of the firm.

Technology giant Google recovered sharply from the initial fall in the week gone by and ended flat with a positive bias. Shares of the firm closed at $1,734.16 per share. Since December 2, shares of Google are down 5%.

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Mrs. Bectors shares grey market premium surges 75% amid volatile stock market; check listing day strategy

Mrs Bectors Food Specialities shares are scheduled to make a stock market debut on Monday, December 28, 2020. The Rs 540-crore IPO was subscribed a whopping 197.38 times, becoming the most subscribed issue of 2020 so far. The company is the largest supplier of buns in India to QSR chains such as Burger King, McDonald’s, KFC, Carl’s Jr, Pizza Hut and Dominos Pizza. It sells its premium bakery products under ‘English Oven’. Mrs Bectors Food came up with its public issue following the successful listing of Burger King India which was listed with a 92 per cent premium to its issue price of Rs 60. In the grey market today, Mrs Bectors Food Specialities shares were seen trading at Rs 503 apiece, implying a premium of Rs 215 or 75 per cent over the IPO price of Rs 288 apiece.

Bectors listing day shares

Mrs Bectors’ numbers over the last few years have not been that good. Amarjeet Maurya, AVP – Mid Caps, Angel Broking Ltd told Financial Express Online, that the first half performance was good as compared to the first half of the previous fiscal because the consumption of bread, biscuits and other bakery products increased. Consumption was also high for Britannia Industries. Overall the business model is good with a healthy market share in North India and in exports as well. “As an investor, if I get more than 50-60 per cent return, I would book profits and wait for a correction in the stock and then invest again. We are expecting that Mrs Bectors Food Specialities might get good multiples although not as high as other listed peers like Britannia Industries and Nestle India,” Maurya said.

Manan Doshi, Co-Founder, UnlistedArena.com dealing in Pre-IPO & Unlisted Shares, told Financial Express Online, after the recovery in broader market and post declaration of allotment status, Mrs Bectors Food Specialities IPO is expected to list with a hefty premium of 75-85 per cent which implies the listing of shares above Rs 500 mark.

While Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online that investors should opt listing gains amid share market volatility. “We expect near to 10-15 per cent listing gains due to high market volatility. Any follow up selling in market may lead to early profit booking,” Vishal Wagh said.

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Time to own Bitcoin? Chris Wood to trim Gold weightage and make way for Bitcoin investment

Bitcoin is again making headlines with the unreal upwards movement it recorded on the price charts recently, setting fresh all-time highs. The crypto currency has gained nearly 400% since March this year and over 200% since the beginning of this pandemic struck year. Investor’s interest in bitcoin has been gaining steam in 2020 and it’s not just small investors, institutions too have joined in cheering it. Seeing these developments, Chris Wood, global head (equity strategy) at Jefferies, has decided to introduce Bitcoin in its long-only global portfolio.

In his weekly newsletter, Greed & Fear, Chris Wood said that Bitcoin will be introduced in the long only global portfolio for US dollar-denominated pension funds. Chris Wood had made a case for owning Bitcoin back in June of 2019. The investment space for Bitcoin will be made by reducing the weight of physical gold bullion by 5 percentage points. “If there is a big drawdown in bitcoin from the current level, after yesterday’s historic breakout above the US$20,000 level, the intention will be to add to this position,” Chris Wood said last week.

Bitcoin institutionalisation

His views on owning the crypto currency have been strengthened by the ‘institutionalisation of Bitcoin’ and with custodian arrangements being made available. Retail investors can now buy into Bitcoin via quoted vehicles, unlike before when the risk of Bitcoin accounts being hacked was real. Wood also highlighted the case of Nasdaq-listed MicroStrategy, a business intelligence software company, that has invested in the Bitcoin equivalent of$425 million ($250m in August and$175m in September), amounting to almost 100% of its own treasury funds, to hold on its balance sheet.

MicroStrategy, in its filings to the SEC said that the aim is to make Bitcoin “the primary treasury reserve asset on an ongoing basis”, along with cash and short-term investments. “This marks a watershed moment in GREED & fear’s view since the auditors approved MicroStrategy putting Bitcoin on its balance sheet as did the SEC,” Chris Wood noted. He further highlighted that MicroStrategy’s market capitalization has risen 131% since announcing its investment in Bitcoin and the value of its Bitcoin holding has almost doubled to $917 million.

Gold not out

Although Chris Wood is trimming Gold’s weight, he said that this does not mean that he is going to give up on gold. “… the yellow metal should rally again if the Fed stays dovish in the face of the dramatic cyclical recovery that is coming on the other side of the pandemic, in line with GREED & fear’s base case,” he said.

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Asian shares up as strong Japan data offsets Wall St losses

Shares have risen in Asia, shrugging off a weak close last week on Wall Street after Japan’s central bank reported a strong improvement in business sentiment.

Tokyo’s Nikkei 225 climbed 0.6 per cent and shares were also higher in Shanghai, Seoul and Sydney. Hong Kong’s Hang Seng declined.

The quarterly “tankan” survey by the Bank of Japan showed business sentiment has improved sharply with expectations for a recovery from a year-long recession.

The main measure of business conditions of large manufacturers rose to minus 10 from minus 27.

It showed rebounds in all categories, both manufacturing and nonmanufacturing companies, large and small. It was a marked improvement from the past several quarterly reports as Japan battled the coronavirus pandemic.

The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

U.S. markets ended last week on a downbeat note. Benchmarks pulled further away from their recent highs Friday as prospects for another aid package from Washington faded while a surge in virus cases is threatening to inflict more damage on an already battered economy.

The proposed $900 billion aid package from a bipartisan group of lawmakers has essentially collapsed because of continued partisan bickering.

But President Donald Trump signed a temporary government-wide funding bill into law, averting a federal shutdown at midnight and buying Congress time for the on-again, off-again talks on COVID-19 aid.

“Given these talks have been running since July, the market may be bored to tears, but if the stimulus door slam shut before Christmas, it could still change the positive vaccine mood music,” Stephen Innes of Axi said in a commentary.

The S&P 500 slipped 0.1per cent to 3,663.46, its third-straight decline since it set a record high on Tuesday. It ended the week 1per cent lower after two weeks of solid gains.

Treasury yields fell broadly, a signal that traders were seeking to lessen their exposure to riskier holdings. On Monday, the yield on the 10-year Treasury was at 0.90per cent, up from 0.89per cent on Friday.

The Dow Jones Industrial Average got a boost from Disney, which hit a new high after giving investors an encouraging update on subscriber growth and future plans for its Disney Plus streaming service. The index rose 0.2per cent, to 30,046.37. The tech-heavy Nasdaq lost 0.2per cent to 12,377.87. The Russell 2000 small-cap index gave up 0.6per cent to 1,911.70.

Investors are watching for updates on the rollout of coronavirus vaccines that might help beat back surging infections that threaten to derail recoveries from business shutdowns and other pandemic-related shocks.

The first of many freezer-packed COVID-19 vaccine vials made their way to distribution sites across the United States on Sunday, as the nation’s pandemic deaths approached the horrifying new milestone of 300,000.

Widespread vaccination will take months and the virus pandemic is prompting tighter restrictions on businesses. An already slow economic recovery appears to be stalling in the wake of the latest surge and unemployment is rising.

Wall Street is also waiting for a special election in Georgia in early January, which could potentially switch the balance of power in the U.S. Senate.

In other trading, benchmark U.S. crude oil gained 13 cents to $46.70 per barrel in electronic trading on the New York Mercantile Exchange. It lost 11 cents to $46.57 per barrel on Friday. Brent crude, the international standard, picked up 16 cents to $50.13 per barrel.

The dollar weakened to 103.98 Japanese yen from 104.93 yen late Friday. The euro rose to $1.2135 from $1.2115.

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