Archives for December 1, 2019

Weekly Market Review – November 30, 2019

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Stock Markets

U.S. stocks rallied once again last week to a another all-time high. That accounts for the 26th record high of the current year. Clearly there is continued optimism that the US and China are making progress in their efforts to pound out a “Phase 1” trade deal, hopefully before year-end. Other data reinforced the notion that the economy is strong with a continued solid base. First, a decrease in the number of people applying for first-time unemployment benefits emerged, followed by an increase in personal spending for October. With October being the eighth straight monthly increase, analysts feel comfortable suggesting that consumers are in pretty healthy shape as we head into holiday spending and the end of the year.

U.S. Economy

U.S. stocks markets are experiencing their best year since 2014. At the same time, bonds are have risen more than the past 17 years. So, while performance remains strong, investors shouldn’t take this term for granted. Analysts are convinced that conditions are in place for an extension to the bull market. Of course, that’s not without some volatility. The Thanksgiving holiday signals we are headed into the homestretch for the year with all eyes on the very important and telltale holiday shopping season. By the numbers it is promising:

Market Numbers

  • Stock markets have historically done well after Thanksgiving. Beginning in 1950, the average return in December has slotted in at 1.5%. The market post-holiday gain in that time period is a gain of 81%.
  • Since 1950, the market has entered Thanksgiving with a year-to-date gain of 20% or more 18 times. This year has followed that trend. In each historical case, the following year produced an average return of 16%.
  • Analysts agree that 2019’s rally reflects positive fundamentals that created and still support this market.   

Metals and Mining

Gold started to stabilize Friday after dropping slowly during the majority of the week. The metal is fully on track to end up with its worst month in three years. In all, it could lose as much as US$58.60 per ounce since the beginning of November. So far, the US-China tariff stalemate has added volatility to the precious metals market, with gold benefiting most. Now, the White House is backing pro-Hong Kong protester legislation passed by Congress last week. This will certainly add tension to the overall discussion.

The crux of the legislation signed President Donald Trump earlier this week, declares the US must review Hong Kong annually to ensure they are sufficiently autonomous from China. Otherwise Hong Kong’s special status for trading will be taken away, and therefore damaging China. Of course, Beijing immediately voiced its criticism of the action and warned of countermeasures. Those new concerns helped gold rally on Friday morning to trade at US$1,459.68 at 10:21 a.m. EST. Silver and platinum have also trended lower over the 30-day period. Silver is down just over US$1 per ounce for the month, locking it into the US$17 range. Platinum has dropped about US$50 since the beginning of the month. According to a recent report from the World Platinum Council, global demand is expected to fall 10 percent in 2020. It seems that palladium is the only metal to have performed well over the 30 days. Palladium looks to be closing in on gold’s all time high of US$1,900 set in 2011. It is unequivocally the most successful precious commodity in 2019, gaining US$534 an ounce since starting the year at US$1,287.

Energy and Oil

The blatant uncertainty over global economic and oil demand growth will continue to put pressure on oil prices next year as the oversupply in the market will likely persist. That’s according to the monthly Reuters poll of economists and analysts issued Friday. According to the 42 experts, Brent Crude will average US$62.50 per barrel in 2020. The economists expect WTI Crude to average US$57.30 a barrel next year, also up from last month’s US$56.98 estimate. The analysts expect weak demand growth in the first half of 2020 due to weak economic growth. Most also agree that there is too much oil in the market. Demand growth could be anywhere in the range of 800,000 bpd to 1.4 million bpd, according to the experts surveyed by Reuters. The big story for the week was the spot prices for natural gas which fell sharply on Friday as forecasts for warm weather surprised traders who were hoping for increased demand. After all, this is normally cold season in the United States. Natural gas prices were trading down 7.52% on Friday afternoon at $2.313. Losses mounted all week starting out at $2.738 on Sunday – a loss of 15.5% for the week. As a result of some moderately warmer weather in the short term, US demand is expected to increase only to 104.7 Bcf/d over the same timeframe, compared with US natural gas production that is expected to hover around 92.7 Bcf/d—a 6% increase over year-ago levels. The EIA has estimated that total natural gas use actually fell 5% compared to the previous week, with natural gas use for power consumption declining even more, by 7%. Overall, natural gas prices are down sharply year on year, with prices as of November 30, 2018, sitting at $4.339, a loss of $2.026 or 47% y/y.

World Markets

European stock markets were higher this week lifted by a rally on Wall Street. Still, worries emerged that U.S.-China trade tensions would escalate after President Trump showed support for Hong Kong protests. That action quickly capped the previous gains. The pan-European STOXX Europe 600 Index rose 1.1%. The German DAX gained about 0.7%, and the UK’s FTSE 100 Index was up about 0.5%. The British pound rose 0.7% against the U.S. dollar as another poll came out suggesting that a Conservative Party win was the likely result of the upcoming December UK elections. British Prime Minister Boris Johnson promises that he will deliver a new Brexit deal to Parliament even before Christmas. In Germany, the consumer sentiment rose unexpectedly in December. The improved mood among buyers is expected to give a boost to household spending and support the export-driven German economy.

Chinese stocks fell for a third week as President Trump’s signing of a bill supporting the Hong Kong protesters drew a sour response from Beijing. It also served to unhinge the bilateral trade talks aimed at forging a Phase One trade deal between the countries. For the week, the benchmark Shanghai Composite Index declined 0.5% and the large-cap CSI 300 Index, which tracks blue chips listed on the Shanghai and Shenzhen exchanges, gave up 0.6%. Both indexes fell to their lowest levels on Friday. That followed logically the day after China officially criticized the U.S. legislation and said it would take “firm countermeasures” if the U.S. continued to interfere in Hong Kong. Officials from both countries signaled during the week that an interim US-China trade deal is close, although it isn’t expected to include the bigger items such as intellectual property, or technology transfer.

The Week Ahead

In the post-Thanksgiving week, a few key data will be released that point to the way will be sending off 2019. Important items of note include jobs, the ISM manufacturing index and services PMI, motor vehicle sales, the unemployment rate, and consumer sentiment index which should reflect the average person’s view of how the economy is looking.

Key Topics to Watch

  • Markit manufacturing PMI
  • ISM manufacturing index
  • Construction spending
  • Motor vehicle sales
  • ADP employment
  • Markit services PMI
  • ISM nonmanufacturing index
  • Weekly jobless claims
  • Trade deficit
  • Factory orders
  • Nonfarm payrolls
  • Unemployment rate
  • Average hourly earnings
  • Consumer sentiment index
  • Wholesale inventories
  • Consumer credit

Markets Index Wrap Up

‘Project Cars’ developer bought by racing sim giant Codemasters

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Slightly Mad Studios was purchased for $30 million.

There’s mixed feelings for racing game fans this week as publisher Codemasters announced it will purchase Slightly Mad Studios, the developer of the Project Cars series. Codemasters will pay $30 million for the acquisition, as reported by GamesIndustry.biz.

Slightly Mad Studios is a British developer which worked on titles like Need for Speed: Shift and Test Drive: Ferrari Racing Legends before debuting the first Project Cars in 2015. The franchise had a second entry with Project Cars 2 in 2017, and a Project Cars 3 has been announced along with a mobile title, Project Cars Go, although neither has a release date yet.

The publisher that purchased the studio, Codemasters, is also a British outfit. The matchup makes sense given Codemasters’ focus on racing titles, with its portfolio including titles like the Colin McRae Rally series, the F1 series, the Micro Machines series and the Dizzy series. Though some fans have expressed concerns that the highly realistic simulation of the Project Cars games may be watered down to a more arcade style as seen in other Codemasters games like Grid.

The entire Slightly Mad staff of 150 will transition over to Codemasters in the deal. However, one open question remains: The fate of the “Mad Box,” an ambitious Slightly Mad program to build its own console. The plan to build “the most powerful console ever” was announced by CEO Ian Bell in January this year.

For now, the combined Codemasters and Slightly Mad forces will continue work on Project Cars 3, Project Cars Go and an as-yet-unnamed project which is rumored to be a tie-in to the Fast and Furious franchise.

Apple will take a ‘deeper look’ at disputed borders in Maps

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Don’t expect changes to its Crimea map for Russian users, however.

Apple might just rethink its approach to disputed borders following its change to Crimea for Russian users. A spokeswoman told the BBC in a statement that Apple would have a “deeper look” at how it handles contested borders in Maps in the wake of the controversy, and that there might be more changes as a result of the review. You shouldn’t expect it to reverse its Crimea changes, however. The company stressed that it was only labeling Crimea as Russian to obey that country’s law, and that the territory would still be listed as Ukranian for everyone else.

“We review international law as well as relevant US and other domestic laws before making a determination in labeling on our Maps and make changes if required by law,” the spokeswoman said.

There’s no doubt that Apple had fought the Russian requirement. It spent several months negotiating with Russia in hopes of finding a middle ground where Crimea would be marked as an undefined territory. Nonetheless, its concession has drawn criticism from the Ukraine government and others who believe that no one should recognize Russia’s annexation of Crimea regardless of pressure.

As with the decision to pull a Hong Kong protest app, Apple is in a difficult position. While it has typically opposed authoritarian moves like this, it also risks losing access to major markets if it refuses to give in — and leaving an oppressive country isn’t necessarily going to lead to greater freedom. There’s no easy choice, and Apple’s review of its strategy might be crucial to walking that fine line in the future.

TunnelBear discounts a year of VPN service to $50

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It might be an affordable way to keep your connection private.

If you’re concerned about the privacy of your internet access or just want to access foreign content like you’re a local, a VPN can help — and thankfully, you might not have to pay early to use one. TunnelBear is running a Black Friday weekend sale that offers a year of VPN service for $50, or just shy of $10 off the usual price. That nets you 256-bit encryption on up to five connected devices with unlimited data, and there won’t be logs to help hackers or suspicious governments trace your activity.

The promo is only expected to last through December 2nd (aka Cyber Monday), so you’ll want to act quickly if you like the idea of using a VPN to protect your internet traffic.

TunnelBear isn’t necessarily the most advanced VPN available, but it is one of the easier-to-use examples with apps for virtually every major platform and a plain-language approach. The company also vows never to monitor activity and gets yearly independent security audits. While that doesn’t guarantee that the service will be completely bulletproof, it could be ideal if you’re a VPN rookie who wants some added security without much fuss.

Apple offers three-month News+ trials through Black Friday weekend

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It’s a temporary promo, but a big step up from the usual one-month offer.

Apple Music has long had three-month free trials, but what if you want to give News+ a similar dry run? You can — but only if you act quickly. Apple is offering a three-month trial to News+ to American and Canadian users who sign up through Black Friday weekend. That’s much longer than the usual one month, and should give you a considerably better feel for what it’s like to read magazines and newspapers on your Apple devices.

As always, you’ll want to keep an eye on when your trial date ends. Apple will automatically renew your News+ service for $10 per month ($13 CAD) if you haven’t cancelled before your free period is over.

It’s not certain if or when Apple might offer a promo like this again. However, there have been rumors that News+ got off to a slow start. Campaigns like this might help fence-sitters who’ve been curious and wanted more time to sample Apple’s wares. And look at it this way: if nothing else, you’ll have plenty of reading material to tide you over during the winter.

AcelRx Pharmaceuticals Inc. (ACRX) Soars 5.68%

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AcelRx Pharmaceuticals Inc. (ACRX) had a good day on the market for Friday November 29 as shares jumped 5.68% to close at $1.86. About 401,297 shares traded hands on 1,358 trades for the day, compared with an average daily volume of n/a shares out of a total float of 79.57 million. After opening the trading day at $1.77, shares of AcelRx Pharmaceuticals Inc. stayed within a range of $1.86 to $1.75.

With today’s gains, AcelRx Pharmaceuticals Inc. now has a market cap of $148.01 million. Shares of AcelRx Pharmaceuticals Inc. have been trading within a range of $4.09 and $1.64 over the last year, and it had a 50-day SMA of $n/a and a 200-day SMA of $n/a.

AcelRx Pharmaceuticals Inc is a specialty pharmaceutical company focused on the development and commercialization of therapies for use in medically supervised settings. The company’s proprietary, non-invasive sublingual formulation technology delivers sufentanil with consistent pharmacokinetic profiles. The company has one approved product in the U.S., DSUVIA (sufentanil sublingual tablet) known as DZUVEO in Europe indicated for the management of acute pain, severe enough to require an opioid analgesic for adult patients and one product candidate, Zalviso (sufentanil sublingual tablet system, SST system being developed as an innovatively designed patient-controlled analgesia (PCA) system for reduction of moderate-to-severe acute pain in medically supervised settings.

AcelRx Pharmaceuticals Inc. is based out of Redwood City, CA and has some 90 employees. Its CEO is Vincent J. Angotti.

AcelRx Pharmaceuticals Inc. is also a component of the Russell 2000. The Russell 2000 is one of the leading indices tracking small-cap companies in the United States. It’s maintained by Russell Investments, an industry leader in creating and maintaining indices, and consists of the smallest 2000 stocks from the broader Russell 3000 index.

Russell’s indices differ from traditional indices like the Dow Jones Industrial Average (DJIA) or S&P 500, whose members are selected by committee, because they base membership entirely on an objective, rules based methodology. The 3,000 largest companies by market cap make up the Russell 3000, with the 2,000 smaller companies making up the Russell 2000. It’s a simple approach that gives a broad, unbiased look at the small-cap market as a whole.