Outlook 2021 and Top Buy Stocks(Lists)

Two important lessons to learn from 2020 stock markets are to keep a long-term perspective and the belief that markets are forward-looking. Heading into 2021 we look forward to hopefully a year when the pandemic subsides, lives return closer to normal, and economic recovery picks up. Below are the highlights of the sectors with stock in focus for the year 2021.

1. Semiconductor/Chips: The global Semicon industry suffered its worst year in almost two decades and picking up to return to growth in 2020, according to World Semiconductor Trade Statistics. The group sees Semicon sales accelerating further in 2021. The fastest-growing category of semiconductors in 2021 is memory chips, with forecast growth at 13.3%. As electric vehicles, smartphones, 5G equipments etc all need chips, chips are in great demand. The largest chipmaker in the world is Taiwan Semiconductor Manufacturing(TSM), and other top players including Advanced Micro Devices(AMD), Nvidia(NVDA), Qualcomm(QCOM), Apple(AAPL), and ASML(AMSL). Or Semicon Sector ETF SOXX.

In Hong Kong, related top players including SMIC(981) Sunny Optical(2382), AAC Tech(2018) or Hang Seng TECH Index ETF(3033) 

In Singapore, related tech players including AEM, Frencken, UMS

2. Food Delivery: Virus won't go away at least for quite some time, and home office will be the new norm. It's expected food delivery companies will do well. Companies in focus including Uber Tech(UBER), DoorDash(DASH).

3. Online Shopping and Logistics: Amazon(AMZN), Alibaba(BABA, or 9988.HK), Pinduoduo(PDD), ContextLogic(WISH), WISH is called the U.S version of China's Pinduoduo, just launched its IPO on Dec 16, it traded underwater to its IPO price US$24. and also FedEx(FDX) and United Parcel Service(UPS)

4. Remote Working: Zoom Video Communications( ZM), Cisco System(CSCO), Slack Tech(WORK), Alphabet(GOOGL), Facebook(FB), Microsoft(MSFT)

5. Online Education: TWOU(2U), Stride(LRN), 17 Education(YQ), GSX Techedu(GSX), TAL Edu(TAL) New Oriental Edu(EDU)

Hong Kong related stocks: New Oriental Edu(9901), Koolearn(1797)

6. Remote Healthcare: Teladoc Health(TDOC), American Well(AMWL), Veeva System(VEEV)

7. Online Entertainment: Netflix(NFLX)

8. Consumer Staples: Wal-Mart Stores(WMT), Costco Wholesale(COST), Procter & Gamble(PG), or SPDR Consumer Discret Sector ETF(XLY)

In Singapore, related stocks Wilmar.

9. Insurance and Wealth Management technology companies: Lemonade(LMND) Lufax(LU)

10. New Energy Vehicle companies: Tesla(TSLA), NIO, XPeng(XPEV), Li Auto(LI)

In Hong Kong, related stocks Ganfeng Lithium(1772) which is the top battery supplier to TSLA and other electric car companies. 

In Singapore, there are two companies with very unique business thus give them unbalanced advantages: Nanofilm and Credit Bureau Asia.

A Look Back At An Unprecedented Year 2020

Summary of content for the week of  Dec 31:

1. Week 53 major indexes performance;

2. Week 53 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

4. Major Indexes monthly performance for December

5. Wrapping up the year 2020

U.S

U.S major indexes hit all-time highs in the holiday-shortened last week of the year. Stocks closed out a year of solid gains led by the technology-heavy Nasdaq Composite Index(COMP), which recorded its best annual performance since 2009, with a total 43.64% return. 

To highlight, Consumer Discretionary(XLY) shares were very strong, as electric vehicle maker Tesla(TSLA) just joined the index. Energy(XLE) stocks lagged in the week. 

A look back at an unprecedented year. The year 2020 will go down in history as one of the most memorable and unpredictable years of our lives. Below are some of the highlights(good and bad):

1. The fastest bear market and the fastest recovery from a bear market on record. SPX entered into the bear market from all-time highs in just 23 days, with 34% decline. On the flipside, SPX rebounded to new highs in Aug recorded the fastest recovery from a bear market on record in just four months. By year-end, SPX rallied 71% from March 23 bottom and closed 16% up for the year. 

2. Record GDP swings. The U.S 2Q GDP contracted -31% annualised and rose 33% in 3Q after reopening of the economy. 

3. Unemployment spikes. Apr 2020 saw the unemployment rate spiked to 14.7%-the highest level since the Great Depression from a 50-year low of 3.5% in Feb. 

4. Fed's enormous asset buying. Fed injected over US$ 3 trillion over the course of four months, a similar amount it had done in four years in the 2008 financial crisis. 

5. Negative oil rates. In Apr, oil prices fell into negative territory for -US$37 per barrel first time in history. 

China/HK

China Shanghai SSE index finished at a new high since Feb 2018 as investors anticipated stronger growth in 2021. The great news before the year ended was EU and China agreed on an investment treaty after seven years of talks. The HSI index also closed at its highest since Feb 24 2020, further upside is expected. One company to highlight is Alibaba(BABA, 9988.HK) which saw its price rebounded in the last week of the year, after dropping as much as 33% from its all-time high on Oct 26. 

Singapore

STI was the worst-performing index with an 11.76% loss( refer to my weekly index performance table below). It's hoped the Singapore stocks will do a catch up in the new year 2021 after the vaccine was carried out first in Asia. Technically, STI next major target is at the 3100 level.