There has been no shortage of commentators telling ASX and international investors about the merits of investing in China.

China is the world’s second-largest and most populous economy. As such, China has been climbing its way up investors’ watch-lists in recent years. In no doubt helped by the stellar performance of some of its biggest companies.

US-based tech companies like Tesla Inc (NASDAQ: TSLA), Alphabet Inc (NASDAQ: GOOGL)(NASDAQ: GOOGL), Amazon.com, Inc (NASDAQ: AMZN) and Netflix Inc (NASDAQ: NFLX) are arguably still more popular with Aussie investors. Even so, it’s fairly safe to say that Chinese companies have worked their way into the ASX investor conscience.

Aussie investors are probably familiar with one of China’s biggest companies after 2020 – Tencent Holdings (OTCMKTS: TCEHY). Tencent made waves last year when it acquired a 5% stake in buy now, pay later (BNPL) darling Afterpay Ltd (ASX: APT) in May – an investment that would have already paid off very handsomely.

Chinese shares prove popular

Other Chinese companies, particularly those in the tech space, are also proving very popular. Just this week, we looked at some of the most popular international shares that ASX investors have been buying of late. And over the week of 4-8 January, 2 Chinese companies were in the top 10 list.

They were the e-commerce juggernaut Alibaba Group Holdings Ltd (NYSE: BABA) and the electric vehicle and battery manufacturer Nio Inc (NYSE: NIO), the ‘Tesla of China’.

Other popular Chinese companies include JD.com Inc (NASDAQ: JD), often described as the ‘Amazon of China’, Baidu Inc (NASDAQ: BIDU), the ‘Google of China’ and iQiYi Inc (NASDAQ: IQ) the ‘Netflix of China’.

The stellar performances of some of these companies have no doubt helped. Tencent, for example, is up more than 52% over the past 12 months. Baidu is up more than 70%, and Nio a whopping 1,550%.

As you might have noticed, these companies, although Chinese, are all listed on American stock exchanges like the Nasdaq and the NYSE. Tencent is listed on the over-the-counter (OTC) markets.

But these companies have recently become potential casualties of the rising geopolitical tensions between the United States and China. Just last month, US President Donald Trump signed a law that requires “foreign companies to submit to increased accounting disclosures and to certify that they are not owned or controlled by a foreign government”.

According to reporting in the Australian Financial Review (AFR) 2 weeks ago, the NYSE has already begun the delisting process for 3 Chinese companies – China Telecom Corporation, China Mobile and China Unicom. Other popular Chinese companies like JD.com have initiated separate listings on the Hong Kong Stock Exchange in anticipation of a potential delisting move.

China’s ‘big 3’ safe… for now

However, holders of the more popular Chinese companies will be breathing a sigh of relief today.

According to a separate AFR report today, the US government will not be forcing Alibaba, Tencent and Baidu to delist from American exchanges.

According to the report, the US Treasury has “blocked an attempt” by the Pentagon and the US State Department to delist these companies. That’s despite the latter 2 agencies “pushing hard” for delisting due to “alleged links to the Chinese military”.

Whilst this move might be irrelevant for many ASX investors who don’t hold the US-listed Chinese shares themselves, it would have had other consequences.

A popular and best performing exchange-traded funds (ETFs) on the ASX is the BetaShares Asian Technology Tigers ETF (ASX: ASIA). This ETF has more than $558 million in assets under management, and has returned 62% over the past 12 months. It holds Alibaba, Baidu and Tencent, as well as JD.com and iQiYi. ASIA unitholders (and BetaShares) would be very pleased with this development.

In 2021, Chinese companies will instead be dealing with a Biden Administration in the US. As such, it’s unclear whether the pressure on US-listed Chinese companies will deflate or ramp up in 2021 and beyond. But recent history is no doubt causing some worry for Chinese-focused ASX investors.

More reading

• Here are the US shares ASX investors are buying in 2021 so far
• 2 quality ETFs for ASX investors in January
• 3 great ASX tech shares to buy
• 2 fantastic ETFs for ASX investors to buy
• 2 outstanding ETFs for ASX investors to buy

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Baidu, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), Amazon, Baidu, JD.com, Netflix, and Tesla and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, JD.com, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Cyclopharm Limited (ASX: CYC) share price was sent soaring today after the company announced a business update.

Cyclopharm shares went as high as 14.41% in afternoon trade before closing 6.78% up at $2.52 per share.

What Cyclopharm does

Cyclopharm is an ASX-listed radiopharmaceutical company headquartered in New South Wales. It currently has a market capitalisation of just over $203 million.

As stated on the company’s website, “the company’s mission is to provide nuclear medicine and other clinicians with the ability to improve patient care outcomes.”

The health company aims to achieve this objective through the provision of its core radiopharmaceutical product, Technegas, which is used in functional lung ventilation imaging.

What happened?

Today, the Cyclopharm share price went soaring after the company announced an update on its progress towards gaining United States Food and Drug Administration (USFDA) approval. The company needs USFDA approval in order to begin sales of Technegas, its flagship product, in the US.

The company announced that its phase 3 trials have met their Primary and Secondary Efficacy Endpoints in September of last year. As such, it will continue its ongoing “positive” dialogue with the USFDA in order to get its approval of Technegas.

Based on these discussions, the company remains highly confident the approval process is on track to be completed in the second half of FY21.

Cyclopharm also updated its guidance for FY20 revenue. The company stated that despite the challenges of COVID-19, revenue is expected to be in line with that of FY19, which was approximately $14 million.

US market entry

With the impending approval of Technegas, Cyclopharm has begun undertaking activities to ensure it is well placed to rapidly roll out its product. These activities include building inventory reserves, finalising agreements for third party distribution, service and installation, and administrative support.

According to Cyclopharm, the existing market for nuclear medicine ventilation in the US is estimated to be roughly US$90 million annually.

Based on Cyclopharm’s experience in the Canadian market, it remains confident that Technegas can achieve a 50% share of the USA market over 2 to 3 years, with an 80% share representing around 480,000 procedures per annum achievable over a 5 to 7 year period.

More reading

• Why the Odyssey (ASX:ODY) share price is up a whopping 60% today
• Signal share price? An Elon Musk tweet and a WhatsApp controversy
• Why the Nanollose (ASX:NC6) share price is shooting higher today
• 2 ASX 50 shares to buy
• 3 reasons we might see higher ASX share prices in 2021

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Odyssey Gold Ltd (ASX: ODY) share price is one of the few star performers on the ASX market today. This comes after the company released previously uncovered results from its high-grade Tuckanarra exploration project.

During the opening minutes of trade, the gold miner’s shares rocketed to an intraday high of 8 cents. However, investors have decided to take some profit off the table, sending the Odyssey share price to 6.9 cents, up 60.4%.

What’s moving the Odyssey share price higher?

Today’s news revealed that Odyssey has uncovered a number of previously unannounced results from Bottle Dump (the most eastern pit at its Tuckanarra project), which signify the potential of high-grade gold mineralisation at the site. 

Odyssey acquired an 80% interest in the Tuckanarra gold project from Canadian-listed gold producer, Monument Mining Ltd, late last year. Since then, the miner has been collating and reviewing all historical exploration data to see if it missed any drilling results that occurred before its acquisition of both the Tuckanarra and Stakewell projects.

The newly discovered results from Bottle Dump were as follows:

• 30 meters @ 3.7 grams per tonne (g/t) of AU (gold) (BTD100 from 87 metres)
• 13 meters @ 8.5 g/t Au (BTD128 from 15 metres)
• 8 meters @ 10.3 g/t Au (BTD123 from 88 metres)
• 2 meters @15.8 g/t Au (BTD107 from 81 metres)
• 8 meters @ 6.3 g/t Au (BTD138 from 80 metres)
• 12 meters @ 4.5 g/t Au (BTD108 from 69 metres)

Located in Western Australia, Tuckanarra covers an area of 52 square kilometres. The project has four main pits – Bottle Dump, Maybelle, Cable and Bollard. Originally, Tuckanarra came with extensive drilling and geochemical tests at the site. Over 2,949 drill holes and 6,940 soil/rock samples were conducted prior to the acquisition.

The adjacent Stakewell gold project is located just north of Tuckanarra. Both sites, which represent the Tuckanarra greenstone belt, position Odyssey to become a large player in the area known as the Murchison Goldfields.

In light of the recent developments, the company stated that it was planning to commence its maiden drilling program at Tuckanarra and Stakewell. Odyssey added that planning, contract tendering and permits are well advanced and will begin work sometime this quarter.

Management commentary

Odyssey executive director Mr Matt Syme touched on the positive find, saying:

The Odyssey team is very pleased that our review and modelling of the extensive historical exploration dataset continues to enhance the potential at Tuckanarra.

Bottle Dump is emerging as an exciting, high priority target given the down plunge potential revealed by these and earlier results.

The Company is looking forward to further results from the ongoing review and collation of historic exploration data as well as the commencement of our maiden drill program in coming weeks.

More reading

• Signal share price? An Elon Musk tweet and a WhatsApp controversy
• Why the Nanollose (ASX:NC6) share price is shooting higher today
• 2 ASX 50 shares to buy
• 3 reasons we might see higher ASX share prices in 2021
• Does the ASX care that Donald Trump has been impeached, twice?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The last week certainly has been anything but boring, especially for the Signal app and its alleged ‘share price’.

You’d be forgiven if you missed Signal’s spontaneous rise to stardom amongst the flurry of big tech interventions and controversies. Better still, what even is Signal? And why does it get the endorsement of Tesla Inc (NASDAQ: TSLA) founder and world’s richest person, Elon Musk?

The truth is Signal is not a publicly traded company, but we’ll get into that a little bit later. Firstly, let’s grasp a novel understanding of what Signal is and how it has come to find itself topping the app stores around the world.

No mixed signals, just plain private

In 2015 former Twitter Inc (NYSE: TWTR) employee Moxie Marlinspike combined 2 secure messaging products to create Signal. The messaging service provides end to end encrypted messaging by solely using your phone number as the intermediatory identifier. However, not even this information is used by Signal to try to identify you.

The fierce privacy emphasis has been praised by iconic ambassadors, such as American whistle-blower, Edward Snowden.

Here’s a reason: I use it every day and I’m not dead yet. https://t.co/Trhgqbwdpj

— Edward Snowden (@Snowden) January 7, 2021

https://platform.twitter.com/widgets.js

The platform’s service is in stark contrast to the likes of Facebook Inc (NASDAQ: FB) and its subsidiary WhatsApp when compared on a privacy scale. Currently, Facebook collects information from its users’ including location, name, photos, browsing history, advertising data, audio data, health and fitness – you get the point, it’s an extensive list.

When ripples turned into waves

As written in The Wall Street Journal, the de-platforming of United States President Donald Trump from popular social media services, such as Facebook and Twitter, after the devastating US Capitol riots resulted in some people seeking means of communication that cannot be intervened.

Pouring fuel on the fire, WhatsApp then updated its privacy policy. The update stipulated that WhatsApp would have the right to share the user’s IP address, phone number, and payments, with its parent company Facebook. These terms of service are mandatory and unless otherwise agreed to by 8 February would bar the user from using the messaging application.

Many WhatsApp users were unsettled by the move and were open to alternatives. Key intro, Elon Musk, turning that diesel into rocket fuel, as he does best. Igniting the public interest in Signal, with the eloquently put tweet, “Use Signal” on 7 January.

With more than 42 million Twitter followers, the ensuing flood of signups to Signal tested its load handling. Reportedly, more than 8.8 million people downloaded Signal through the Apple and Google stores over the week beginning 4 January.

📈 More than 5M people downloaded #Signal this weekend, after @elonmusk and @Snowden tweeted about it 😱 👁‍🗨 #privacy #whatsapp

Our report 👉 https://t.co/qgRqvJ6940 pic.twitter.com/bmvuCWQJwr

— Appfigures (@appfigures) January 12, 2021

https://platform.twitter.com/widgets.js

Signal share price, a case of mistaken identity

If we reminisce on last year when the video conferencing software, Zoom, was taking the world by storm – traders and investors mistook Zoom Technologies Inc (OTCMKTS: ZTNO) for the real culprit. This led to a much smaller company rising nearly 900% before being halted.

Much like this scenario, Signal brought along its own doppelgänger for a ride. The ‘Signal’ share price experienced massive volatility and jumped more than 6000% after the Elon Musk tweet. Unfortunately, Signal Advance Inc (OTCMKTS: SIGL) has absolutely nothing to do with the private messaging provider, Signal.

Foolish takeaway

Well, if we were looking for a quiet start to the year, I think that can be ruled out. The absurdity continues into 2021.  Social media companies are grappling with the grey area between responsibility for what is published on their platforms, or if they are more a utility.

We all certainly want to have a right to privacy, but in doing so, we don’t want to create echo chambers of ill intent. The regulatory woes will likely continue for Facebook, Twitter, Google, etc. into the future as we attempt to navigate these unchartered waters.  

More reading

• These ASX stocks just got a big upgrade on the back of Tesla (NASDAQ:TSLA)
• Will the ASX see a share market bubble in 2021?
• Here are the US shares ASX investors are buying in 2021 so far
• Elon Musk is now world’s wealthiest person
• We’re in a massive bubble: This is when it’ll pop

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Mitchell Lawler owns shares of Facebook and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook, Tesla, and Twitter. The Motley Fool Australia has recommended Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nanollose Ltd (ASX: NC6) share price has been on fire the last two days. Yesterday, the company’s shares jumped to more than 52% at market close, following the announcement of a joint patent application with Grasim Industries Limited.

Today, investors further drove up the Nanollose share price after digesting the news, sending it a whopping 82% higher at 14 cents.

Quick take on Nanollose

Based in Australia, Nanollose specialises in researching and developing eco-friendly biomaterial using its microbial cellulose technology. Its proprietary plant-free technology alters the structure of nano cellulose through physical or chemical treatments to create new modified fibres.

The company aims to commercialise the production of its cellulose technology as an environmentally-friendlier alternative to cotton, tree pulp, and other fibres that are used within the textiles industry.

What’s driving the Nanollose share price to massive highs?

In yesterday’s release, Nanollose advised that is has filed a patent application with Grasim for a high tenacity lyocell fibre made from microbial cellulose.

The submission represents a major step forward for the company as it seeks to improve its fibre composites. Nanollose said that a team of fibre specialists at Grasim’s Pulp and Fibre Innovation Centre was producing nullarbor lyocell fibre. This is a revolutionary fibre said to be finer than silk and significantly more durable than conventionally-sourced wood pulp lyocell.

The use of lyocell is increasingly popular in today’s environment with the fibre employed in a number of industry-wide applications. The more expensive cousin of cotton, Lyocell is used in many everyday fabrics. This includes textiles to make clothing such as jeans, towels, and underwear. In addition, the cellulose fibre is used for conveyer belts, speciality papers, biodegradable plastic and films, and medical dressings.

According to GM Insight, the lyocell market is estimated to be worth US$1.5 billion before 2024. This represents a compound annual growth rate of 8% and highlights the growing market opportunity for Nanollose and Grasim.

Both companies will seek to produce commercial quantities of the tree-free fibre, in hope that commercial agreements will be formed with fashion labels.

Management commentary

Nanollose executive chair, Dr Wayne Best, welcomed the progress with Birla Cellulose – Grasim’s business unit, saying:

We are extremely pleased with the progress of our collaboration with Grasim and Birla Cellulose, which has already delivered this joint patent application.

The nullarbor fibre produced by the team at Birla Cellulose has exceeded our expectations, and we now have a fibre that is not only more eco-friendly but has superior properties over conventional tree-based fibres.

We are very much looking forward to commencing the pilot production and presenting textiles made from this remarkable fibre to the fashion industry.

Chief technology officer for the Aditya Birla Group (owner of Grasim and Birla Cellulose), Dr Aspi Patel, added:

This innovative development is another important step in our continuing journey to make our fibres more sustainable.

This is an exciting development in the area of next generation alternative feedstock and we are looking forward to scaling up this technology in collaboration with Nanollose.

More reading

• 2 ASX 50 shares to buy
• 3 reasons we might see higher ASX share prices in 2021
• Does the ASX care that Donald Trump has been impeached, twice?
• Why this broker likes ANZ (ASX:ANZ), NAB (ASX:NAB), and Westpac (ASX:WBC)
• What’s next for WAAAX shares in 2021? 

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 50 index may not be as well-known as the S&P/ASX 200 Index (ASX: XJO), but it is arguably just as important.

On the ASX 50 you’ll find many of the highest quality and most respected companies that the ANZ region has to offer.

Two ASX 200 shares that have been rated as buys are listed below. Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

The first ASX 50 share to look at is BHP. It is of course one of the world’s largest miners and the owner of a portfolio of world class and low cost operations across the globe.

Thanks to sky high iron ore and copper prices and a recovery in oil prices, BHP has been tipped to deliver a bumper profit result in FY 2021.

One broker that is particularly positive on the mining giant is Ord Minnett. Last month it put a buy rating and $50.00 price target on its shares. Its analysts believe the company is well-placed to outperform in the post-COVID environment and expects this to lead to generous dividend payments.

Based on the current BHP share price, Ord Minnett is forecasting a 5.1% fully franked dividend yield in FY 2021.

Ramsay Health Care Limited (ASX: RHC)

Another ASX 50 share which is highly rated is Ramsay Health Care. Although it is battling tough trading conditions at the moment, analysts at Macquarie believe its long term growth prospects remain very bright.

In light of this, it believes that investors ought to focus on the long term investment opportunity and consider taking advantage of recent weakness in the Ramsay share price.

The broker currently has an outperform rating and $73.65 price target on the private hospital operator’s shares. This compares very favourably to the current Ramsay share price of $59.30.

More reading

• BHP, Rio Tinto’s new copper mine under threat
• The BHP (ASX:BHP) share price is Goldman Sach’s top pick for iron ore
• 5 things to watch on the ASX 200 on Wednesday
• Here’s why the Fortescue (ASX:FMG) share price is up 12% in a month
• The Pilbara Minerals (ASX:PLS) share price is already up 25% in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2020 turned out to be a surprisingly good year to have been invested in S&P/ASX 200 Index (ASX: XJO) shares. As long as you didn’t sell your entire portfolio on 23 March, that is. Despite the pandemic, the ASX 200 quickly recovered from the initial market crash we saw in March, and ended up finishing the year a tad below where it started.

Over in the United States (US), things were even better. The flagship S&P 500 Index (INDEXSP: .INX) ended up giving investors a very healthy gain of roughly 16% for the year. That was despite the US getting arguably harder hit by the virus.

But now 2020 is (thankfully) in our rear-vision mirrors, attention is on what 2021 will bring.

Here are 3 reasons why 2021 could end up being an even better year for ASX shares and investors than 2020 was.

Political certainty for shares

This applies mostly to the United States, but as we all know, what happens in the US affects the ASX. President-elect Joe Biden will take office on 20 January. When he does, both chambers of the US Congress will also be under Democratic Party control. This replaces the rather… volatile Trump Administration and the divided control of Congress that has been prevalent since 2018.

Many in the investing community won’t be overjoyed with the prospect of some parts of the Democrats’ agenda, such as higher taxes. Even so, there’s a reason why US markets (and the ASX) jumped when the results of the Georgia senate elections become obvious earlier this month. Unified control of the US government promises more stability and predictability. That’s something markets love (and arguably haven’t been getting much of over the past 2 years).

Pent up demand

Reporting in the Australian Financial Review (AFR) today tells us that “households and businesses have stockpiled more than $200 billion of extra savings” over the past year so so. That’s in large part due to the government’s unprecedented stimulus programs such as JobKeeper.

According to the report, “updated Treasury modelling shows the government’s fiscal support will add 5 per cent to economic output in 2020-21 and boost gross domestic product by 4.5 per cent in 2021-22, compared with the negative and flat GDP growth rates that would have occurred without any stimulus spending”.

That’s in spite of the fact that most of the programs are scheduled to end in March.

This is indisputably good news for the economy. And what’s good for the economy is usually good for the companies that trade within it.

Ultra-loose monetary policy looks set to continue for ASX shares

Last year, the Reserve Bank of Australia (RBA) lowered the cash rate to several new all-time lows. It also initiated an Australian quantitative easing (QE) program for the first time in our country’s history.

As it stands today, interest rates are sitting at just 0.1% (which is virtually zero). These rock-bottom rates are very conducive to higher share prices since they reduce the appeal of other asset classes. These primarily include cash in savings accounts, and fixed-interest investments like bonds.

The RBA has indicated that lower rates are here to stay for at least a couple of years. Further, it has also indicated that it is less inclined than it has historically been to raise rates if inflation kicks off. This should also help in boosting ‘risk-on’ asset prices like shares.

Foolish takeaway

No one can predict the future, and this is especially so when it comes to the volatility of the share market. I’m not saying there’s no way ASX shares can go down at any point during the course of this year, far from it. We are likely to see the usual bouts of volatility at least at some point during the year. But as it currently stands, in my view there are far more short-term tailwinds than headwinds pushing against the market as we embark on a new investing year.

More reading

• Does the ASX care that Donald Trump has been impeached, twice?
• Why this top broker thinks the Telstra (ASX:TLS) share price could surge ~40%
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Are ASX 200 shares set to climb 15% higher in 2021?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The United States economy constitutes roughly one-fourth of the world economy, according to NASDAQ’s January 2020 analysis.

Remarkably, the person employed to oversee this incredible international beast as part of his job has been nearly booted out of office now, twice.

When Congress is continuously taking active duty to dethrone the President of the United States, I can’t help but ask myself: Does the ASX share market care that Donald Trump has been impeached, twice?

The first time Donald Trump was impeached

The first time US Congress tried to fire Donald Trump was in 2019. It was 18 December 2019, to be exact.

In the four weeks that followed, the S&P 500 was up around 4%. The S&P/ASX 200 Index (ASX: XJO) followed suit, knocking up 3.3%, while the S&P/ASX All Ordinaries Index (ASX: XAO) racked up over 15% from 18 December 2019 until 20 January 2020. 

This was a short-lived victory considering the 33% dive that the All Ords took in early February 2020.

The second time Donald Trump was impeached

US markets weren’t really bothered upon the news that Donald Trump was getting kicked out again. Wall Street bench marks didn’t do much overnight. The Dow Jones Industrial Average and S&P 500 Index each moved less than half a percent up and down, respectively.  

At the time of writing this, the ASX 200 has inched up by 0.44% 

Judging by these numbers, it doesn’t seem like investors are too shook about what’s happening in the White House. Perhaps Washington has already lost credibility?

Wait, what does the VIX say?

The S&P/ASX 200 VIX (INDEXASX: XVI) measures market volatility. The VIX measures high when market fear is high. A lower VIX signifies investor complacency. People use the VIX index to predict market patterns and certainty levels.

The Australian Financial Review defines the VIX Index as ‘a higher visibility output of options markets’ further known as the “fear and greed” index.

The ASX noted earlier that the VIX is “sharply lower today, dropping -0.54 points or -3.82% to 13.69”. The index has lost -4.02% for the last five days, but gained +24.32% over the last 52 weeks.

However you look at it, the VIX is built to assess investor sentiment and, based on today’s performance, it doesn’t seem like the market is generally fussed.

More reading

• Why this top broker thinks the Telstra (ASX:TLS) share price could surge ~40%
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Are ASX 200 shares set to climb 15% higher in 2021?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 0.1%

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is back on form and on course to record a solid gain. At the time of writing the benchmark index is up 0.5% to 6,721.3 points.

One area of the market that has been doing a lot of the heavy lifting today has been the banking sector. At the time of writing, all the big four banks are trading higher and are underpinning the ASX 200’s gains.

Why are bank shares climbing higher today?

Today’s gains appear to have been driven by a positive broker note out of Morgan Stanley.

According to the note, the broker believes the banking sector’s outlook is improving and expects the market to begin to price in a recovery in earnings and dividends as the year progresses.

After which, it suspects that next year the banks could be looking at capital management initiatives given the excess capital they built up during the pandemic.

In light of this and the fact that their valuations are still below their pre-COVID-19 levels, the broker sees upside for the big four banks’ shares in 2021.

How does it rate the big four banks?

In alphabetical order, here’s how Morgan Stanley currently rates the big four:

The broker has an outperform rating and $28.00 price target on Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares. It is expecting a 98 cents per share dividend in FY 2021 and then a $1.27 dividend in FY 2022.

Morgan Stanley is less positive on Commonwealth Bank of Australia (ASX: CBA) and has a neutral rating and $82.00 price target on the shares of Australia’s largest bank. It is forecasting a $2.50 per share dividend this year and then a $2.88 per share dividend year next year.

Its analysts see value in the current National Australia Bank Ltd (ASX: NAB) share price and have an outperform rating and $26.00 price target. The broker is forecasting an 88 cents per share dividend in FY 2021 and a $1.06 per share dividend next year.

Finally, the broker also thinks that the Westpac Banking Corp (ASX: WBC) share price is in the buy zone. It has an outperform rating and $22.50 price target on its shares. Morgan Stanley is forecasting an 86 cents per share dividend in FY 2021 and then a $1.08 per share dividend in FY 2021.

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• 2 ASX dividend shares with 6%+ yields
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why this broker likes ANZ (ASX:ANZ), NAB (ASX:NAB), and Westpac (ASX:WBC) appeared first on The Motley Fool Australia.

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WAAAX shares have been the favourites of ASX investors in recent years. Consisting of Wisetech Global Ltd (ASX: WTC), Afterpay Ltd (ASX: APT), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX), and Xero Limited (ASX: XRO), WAAX shares are Australia’s equivalent to the United States’ FAANG stocks.

The coronavirus pandemic has had a mixed impact on WAAAX shares. While some benefitted from the social changes spurred by the pandemic, others faced headwinds. So what’s next for WAAAX shares? 

Logistics technology gaining momentum 

Wisetech is in the logistics business, supplying a software platform to manage supply chains. More than 17,000 logistics organisations use Wisetech’s solutions for freight forwarding, customer clearance, warehousing, tracking, and tracing.

Despite the disruptions to the industry caused by COVID-19, Wisetech’s revenue increased 23% in FY20.

Due to the complexity of the global logistics market, integrated software takes time and expertise to develop. Logistics service providers are moving away from in-house systems and towards commercial software that provides economies of scale with development, upgrade, and maintenance costs spread across many customers. 

Wisetech has worked to standardise global variations in freight forwarding into a single modular product that consolidates data and automates workflow. Since listing on the ASX in 2016 Wisetech has completed over 40 acquisitions, providing it with a unique footprint in the global market.

Although Wisetech boasts all 25 of the world’s largest global freight forwarders as customers, it says it is still in the early stages of market penetration. Wisetech has been gaining momentum and says it is well positioned to transform the US$9 trillion global logistics market. 

Buy now, pay later booms

Afterpay was the star performer of the WAAAX shares in 2020 with the Afterpay share price increasing a staggering 289%. The buy now, pay later (BNPL) provider now boasts a market capitalisation of more than $33 billion. The company has benefitted from the shift to online shopping and digital payment methods as well as an increased focus on budgeting in the wake of the pandemic. 

In November 2020, Afterpay exceeded $2 billion of global sales, more than double that of November 2019. 

Afterpay boasted 11.2 million active customers at the end of the first quarter of FY21, a 98% increase on the prior corresponding period. This included 6.5 million customers in the United States, a key growth market for the company.

Underlying sales in the US overtook those in the ANZ region for the first time in November 2020 at $1 billion versus $0.9 billion for ANZ.

The UK is another key market that Afterpay is seeking to grow as the BNPL sector matures. A $786 million capital raising conducted in July 2020 provided the company with funds to accelerate investment in existing regions and expedite expansion into new markets in 2021. 

Momentum returning for Altium 

Altium provides printed circuit board (PCB) design software. PCBs are a key component of electrical devices, used in everything from mobile phones to cars. Altium is seeking to leverage society’s increasing reliance on electronic devices via domination of the PCB design industry.

Altium’s revenue grew by an impressive 10% in 2020, however, this was below the rate of growth seen in previous years. Nonetheless, Altium has recorded 9 consecutive years of double digit growth and expanding margins.

The macro environment remains challenging, with the first half of FY21 impacted by COVID. Altium says signs of momentum are coming back for the second half and has confirmed guidance of US$200 million to US$212 million in revenue in FY21.  

Long-term AI trends remain positive 

Appen is due to report its financial results for the year ended 31 December 2020 next month. The artificial intelligence (AI) company reported strong growth in 1H20 despite the impacts of COVID on new business development and renewals.

Third quarter revenue was lower than expected, however Appen’s major customers released strong third quarter results and online advertising bounced back. While the fourth quarter improved on the third, Appen’s usual ramp up seen towards the tail end of the year failed to eventuate.

COVID has disrupted the priorities and activities of Appen’s customers, with the result that Appen has revised its full year earnings before interest, tax, depreciation and amortisation (EBITDA) guidance to $106 million—$109 million. Appen says long-term trends for the business remain positive, as spending on artificial intelligence is growing at 28% annually and is expected to accelerate in a post-pandemic environment. The company expects these structural tailwinds to support a return to strong growth rates in 2021.

Cloud accounting continues to grow 

Xero reported a strong performance in the six months to 30 September 2020. Despite challenging market conditions, operating revenue increased 21% year-on-year, while net profit after tax was up by $33.2 million.

Xero provides a software-as-a-service accounting system for small and medium businesses. The company has been focused on helping customers navigate through COVD-19 by enhancing its platform in response to government initiatives and stimulus benefits.

Going forward, Xero is looking to drive the uptake of cloud-based accounting and scale globally. Xero estimates cloud accounting has been adopted by more than 50% of its addressable market in Australia and New Zealand, but less than 20% across the rest of the world.

With liquid resources of $723 million, Xero is well positioned to fund future growth. The continued uncertainty created by COVID has prevented Xero from providing further commentary on its expected full year performance. 

What’s next for WAAAX? 

WAAAX shares reported mixed performances in 2020, but are anticipating positive results in 2021. Afterpay has shone recently but Wisetech, Altium, Appen, and Xero also have plans for growth in place. As the global economy recovers from the ravages of the pandemic, investors will be watching WAAAX shares with interest.  

More reading

• Afterpay (ASX:APT) share price jumps 10% on bullish broker note
• 3 ASX 200 shares to buy right now
• Could this be why Afterpay (ASX:APT) and other BNPL shares are soaring today?
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Why Afterpay, Australian Ethical, Pro Medicus, & Sezzle shares are charging higher

Kate O’Brien owns shares of Altium and Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What’s next for WAAAX shares in 2021?  appeared first on The Motley Fool Australia.

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