A recent Goldman Sachs survey suggests consumers will likely spend more on holiday shopping this year compared to 2023.

But not all retailers are built the same.

Historically, certain retailers experience a more significant boost during the holiday season.

With that in mind, two retail stocks stand out as particularly attractive investments ahead of Black Friday.

Both have consistently outperformed their peers in December over the past ten years.

Bath & Body Works Inc (NYSE: BBWI)

Bath & Body Works (BBWI) stock has shown impressive strength this month, and its historical performance suggests further gains are possible in December.

Since 2021, the retail stock has consistently rallied over 8% in the final month of each year.

Adding to its appeal, BBWI recently exceeded Wall Street estimates for its third financial quarter.

On November 25th, Bath & Body Works expressed confidence in its ability to navigate a volatile retail environment and capitalize on the holiday shopping season, raising its full-year guidance.

CEO Gina Boswell attributed this positive outlook to “strong execution and the momentum we’re building,” reiterating the company’s commitment to sustainable, long-term profitable growth in the earnings press release.

A distinguishing factor for BBWI is its predominantly US-based supply chain.

This domestic focus, combined with the company’s growth strategy, could propel its stock to $42 by the end of next year, according to analysts at TD Cowen.

This price target represents a potential 20% upside from current levels.

Furthermore, BBWI offers investors a healthy 2.26% dividend yield, making it an attractive option for passive income seekers.

Abercrombie & Fitch Co (NYSE: ANF)

Abercrombie & Fitch Co. (ANF), despite a recent decline of more than 10% over the past month, also exhibits a historical trend of December gains, typically up to 3%.

The clothing retailer’s positive financial performance further strengthens its potential for recovery.

On Tuesday, Abercrombie & Fitch significantly surpassed Wall Street expectations for its fiscal third quarter.

Citing anticipated holiday shopping activity, the company raised its guidance for the current quarter, projecting sales growth of up to 7% during the holiday period, exceeding the 4.8% increase forecast by analysts.

“Our teams are engaged and ready to deliver for our customers this holiday season with the goal of achieving sustainable profitable growth firmly in our sights,” CEO Fran Horowitz stated in a press release.

Analysts currently see an average upside of over 25% for Abercrombie & Fitch stock.

However, unlike Bath & Body Works, ANF, whose shares recently broke above their 50-day moving average, does not currently offer a dividend.

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Asian stock markets faced downward pressure on Wednesday as investors grappled with the implications of incoming US President Donald Trump’s renewed tariff threats against Canada, Mexico, and China.

This unease follows Trump’s pledge on Tuesday to impose new levies on these key trading partners.

The Canadian and Mexican currencies, the loonie and peso, remained weak following sharp declines to multi-year lows on Tuesday.

The Chinese yuan also edged closer to its four-month low from the previous session.

Similarly, the Australian dollar, often seen as a proxy for the yuan due to China’s significant trade relationship with Australia, neared its own four-month low.

However, the New Zealand dollar rebounded after the country’s central bank announced a smaller-than-expected interest rate cut of 50 basis points, defying some market predictions of a larger reduction.

Safe-haven yen rises as US dollar weakens

Amidst the market uncertainty, the safe-haven Japanese yen continued its ascent, reaching a two-week high against the US dollar.

The US dollar’s decline was further exacerbated by weakening Treasury yields.

Japanese stocks underperform, autos sector hit hard

Japan’s Nikkei index lagged significantly, falling 0.9%.

The automotive sector was particularly hard hit, declining over 3% on the Tokyo Stock Exchange.

This drop reflects the dual pressures of potential tariffs and the strengthening yen, both of which threaten to squeeze profit margins.

Mixed Performance Across Asian Markets

Taiwanese stocks dipped 0.2%, while South Korea’s KOSPI edged up less than 0.1%, struggling to recover from Tuesday’s 0.6% decline. Mainland Chinese blue-chip stocks fell 0.4%, but Hong Kong’s Hang Seng index managed a slight 0.1% gain.

Overall, MSCI’s broadest index of Asia-Pacific shares slipped 0.1%.

Asian markets diverge from Wall Street gains

The weakness in Asian markets contrasted with the overnight gains on Wall Street, where all three major indices closed higher.

S&P 500 futures indicated a potential 0.1% further advance.

This divergence underscores the specific concerns surrounding Trump’s trade policies within the Asian markets.

Trump’s tariff threats rattle investors

Early Tuesday in Asian trading hours, Trump announced on Truth Social his intention to immediately impose a 25% tariff on all goods from Mexico and Canada upon taking office, along with an additional 10% tariff on products from China.

He stated these tariffs would remain in effect until these countries addressed issues such as drug trafficking and migration across US borders.

“The theme on the day has been to buy America, and for some to begrudgingly open a Truth Social account, with confirmation that headline risk and the communication channels for price discovery in markets have officially evolved,” commented Chris Weston, head of research at Pepperstone.

He further noted the change in Trump’s approach compared to his first term: “he is far more prepared, has a clear game plan, and has the legal passage to execute without constraint,” leading markets to “expect bold action ongoing, with the noise in markets officially increasing even before inauguration.”

Currency markets and treasury yields respond

The offshore yuan weakened 0.1% against the dollar, approaching Tuesday’s low.

The Mexican peso also declined, nearing its overnight trough.

The Canadian dollar edged lower but remained above its previous session’s low.

Against other major currencies, the US dollar saw mixed performance, strengthening slightly against the euro but weakening against the yen, hitting its lowest point since November 10th.

US short-term Treasury yields also continued to decline, extending their pullback from Friday’s nearly four-month high.

Investors assess tactical and fundamental implications

Trading volumes were generally lighter this week due to the US Thanksgiving holiday, with many investors extending their break.

Market participants are also anticipating the release of the Federal Reserve’s preferred inflation gauge, the PCE deflator, later on Wednesday.

Shinji Ogawa, head of Japan cash equities sales at JPMorgan, observed that as the initial market reaction to Trump’s tariff threat subsided, “investors seem to view this as more tactical rather than fundamental, but enough to trigger risk off ahead of the long weekend.”

This suggests a degree of caution but not outright panic among investors.

Commodities markets react to geopolitical and supply dynamics

The New Zealand and Australian dollars saw mixed performance, with the Kiwi gaining ground while the Aussie slightly declined.

Bitcoin, the leading cryptocurrency, attempted to recover after a four-day decline from its record high, while gold prices ticked up slightly.

Oil prices, on the other hand, continued to fall as markets weighed the potential impact of a ceasefire between Israel and Hezbollah, in anticipation of Sunday’s OPEC+ meeting.

Both Brent and WTI crude futures declined, reflecting the easing of geopolitical tensions in the Middle East.

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The Adani Group has issued a clarification regarding the charges against its founder, Gautam Adani, following a US indictment.

Adani Green Energy Ltd., in a stock exchange filing on Wednesday, stated that neither Gautam Adani nor his aides, Sagar Adani and Vneet Jaain, have been charged under the US Foreign Corrupt Practices Act (FCPA), contrary to some media reports.

The company clarified that the Department of Justice indictment charges Gautam Adani, Sagar Adani, and Vneet Jaain with conspiracy to commit securities fraud, wire fraud conspiracy, and securities fraud.

These charges generally carry less severe penalties than bribery.

Additionally, Gautam and Sagar Adani face a civil complaint for violating sections of the Securities Act and aiding and abetting Adani Green in violating the Act.

The Adani Group has previously denied all allegations and stated its intention to pursue legal action in its defense.

FCPA and its implications

The FCPA prohibits companies or individuals with US ties, such as public listings, American investors, or joint ventures, from offering bribes to foreign government officials in exchange for favorable treatment.

While the Adani Group does not directly trade in the US, it does have American investors, which establishes a US link.

Federal prosecutors allege that Adani and other defendants promised over $250 million in bribes to Indian officials to secure solar energy contracts, concealing this scheme while raising capital from US investors.

FCPA investigations are often complex and lengthy, involving the gathering of evidence and interviewing witnesses potentially located outside the US.

However, these cases tend to be high-profile and can lead to significant fines for companies and notable victories for prosecutors.

Potential penalties for Adani Green

Adani Green acknowledged facing potential monetary penalties under the civil complaint but stated that the specific amount has not yet been determined.

The company’s filing aims to provide clarity on the specific charges and potential repercussions of the ongoing legal proceedings.

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Bitcoin, the largest cryptocurrency, has reversed course after flirting with the $100,000 mark.

The digital asset reached an all-time high of $99,830 on November 22 but has since dropped over 8% to $91,377.32 as of Tuesday.

As of 11:48 am IST on Wednesday, BTC stood at $93,099, according to CoinGecko.

The downturn comes despite a stellar 120% rise in 2024, with gains fuelled by bullish market sentiment following Donald Trump’s presidential election victory.

Trump’s pro-crypto stance, including pledges to make the US a global cryptocurrency leader and amass a national bitcoin stockpile, has played a pivotal role in driving demand.

Investors shift focus to protective strategies

Market activity points to heightened caution among bitcoin investors.

Nick Forster, founder of Derive, an on-chain options platform with $7.1 billion in total trade volume, noted a significant shift in sentiment.

The call-put skew index for December 27 bitcoin options expiry dropped 30% in the last 24 hours, signalling an uptick in protective hedging.

“The decline in skew reflects traders hedging against potential downside risks,” Forster told Reuters.

While calls—options to buy bitcoin—still outnumber puts—options to sell—the trend suggests a cautious market, likely spurred by bitcoin’s sharp pullback from its peak.

Major price movements expected around options expiry

The December 27 expiry of $11.8 billion in bitcoin options could act as a catalyst for substantial price movements.

According to Forster, there is a 68% probability that bitcoin will move 16% lower to $81,493 or 20% higher to $115,579 by this date.

Extreme scenarios include a 29.5% decline to $68,429 or a 41.8% rally to $137,645, though these outcomes have only a 5% probability.

Notably, data from Derive shows a 45% chance of bitcoin hitting $100,000 again, with a 4% chance of exceeding $150,000.

Profit-taking drives selling pressure

Profit-taking by long-term holders is adding to bitcoin’s recent sell-off.

Analysis from _checkonchain.com reveals that $60 billion worth of bitcoin supply has been distributed in the past 30 days.

Since bitcoin’s low of $15,479 during the FTX collapse two years ago, long-term holders have moved 21% of their supply this November, marking the heaviest profit-taking in this cycle.

Anthony Pompliano, founder of Professional Capital Management, cited this data in a letter to clients, underscoring its impact on market dynamics.

Despite recent declines, bitcoin’s volatility metrics remain stable, suggesting the market is bracing for further swings.

The cryptocurrency’s seven-day implied volatility stands at 63%, closely aligned with the 30-day level of 55%.

“This close alignment indicates traders are expecting significant price movements soon,” Forster added.

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Singapore’s strategic positioning as a global financial hub continues to strengthen, with the city-state outpacing long-time rival Hong Kong.

Bolstered by political stability, favourable tax policies, and a reputation for neutrality, Singapore is attracting a growing share of foreign capital.

As tensions between the US and China escalate, the flow of investments into the region has further tilted in Singapore’s favour.

Its financial institutions, led by Oversea-Chinese Banking Corporation (OCBC), are navigating these changes with a balance of local focus and global reach, positioning the city as a safe haven for investors seeking stability in uncertain times.

OCBC drives Singapore’s financial sector with $18.4 billion revenue in 2023

OCBC, the second-largest bank in Singapore with $448 billion in assets, has become emblematic of the city-state’s robust banking sector.

Generating $18.4 billion in revenue in 2023, the bank accounts for 62% of its earnings within Singapore, while its Southeast Asian and Greater China operations contribute 19% and 13%, respectively.

Its diversified revenue streams and strategic investments in wealth management have helped the bank maintain resilience amid geopolitical headwinds.

The bank also holds a majority stake in Great Eastern, Singapore’s largest life insurer, and operates private banking services through the Bank of Singapore.

These moves position OCBC as a pivotal player in Southeast Asia’s financial landscape.

Wealth management has become a cornerstone of Singapore’s strategy to outpace Hong Kong.

In the first nine months of 2024, this segment contributed $2.9 billion to OCBC’s revenue.

The city-state has introduced tax incentives for single-family offices, attracting 1,650 such entities by mid-2024, up from 400 in 2020.

This influx underscores Singapore’s appeal as a destination for high-net-worth individuals and corporations seeking financial security in a volatile global market.

US-China tensions shift capital to Singapore

The escalating decoupling between the US and China has had profound implications for Hong Kong, whose economy has traditionally relied on its close ties to the mainland.

By contrast, Singapore’s perceived neutrality and stable regulatory environment have drawn capital from both sides.

Assets under management in Singapore reached $4.1 trillion in 2023, surpassing Hong Kong’s $3.9 trillion.

As US funds increasingly view Hong Kong’s financial ecosystem as risky, Singapore has emerged as the preferred alternative for capital allocation.

Trump’s policies could accelerate Singapore’s gains

The election of Donald Trump as US president could further tip the scales in favour of Singapore.

Trump’s prior administration imposed stringent sanctions and financial restrictions on China, and his re-election promises a continuation of these measures.

Such policies may compel US and European firms to withdraw from Hong Kong, redirecting their investments to Singapore.

Singapore must tread carefully to avoid potential fallout from Trump’s proposed tariffs, which could disrupt global trade and impact its export-reliant economy.

Helen Wong’s leadership cements OCBC’s position

Helen Wong, OCBC’s CEO since 2021, has steered the bank through these shifting dynamics.

With roots in Hong Kong and decades of banking experience in Greater China, Wong has leveraged her expertise to expand OCBC’s influence in both China and ASEAN markets.

Under her leadership, OCBC has prioritised wealth management, broadened its customer base in Hong Kong, and enhanced its offerings in Malaysia and Indonesia.

Wong’s leadership has also earned her recognition as one of the most powerful women in global finance, ranked 17th on the Fortune Most Powerful Women list in 2024.

Her dual focus on resilience and growth exemplifies the strategies driving Singapore’s broader financial ambitions.

Hong Kong fights back

Despite these setbacks, Hong Kong is working to reclaim its status as Asia’s financial powerhouse.

It is revitalising its IPO pipeline, aiming to attract 200 new family offices by 2025. UBS predicts Hong Kong could surpass Switzerland as the leading hub for cross-border finance by 2026.

The city’s reliance on a sluggish Chinese economy and its proximity to Beijing’s jurisdiction remain significant challenges.

Singapore, meanwhile, has taken a broader view, seeing the success of Hong Kong as complementary rather than competitive.

The city-state’s ability to tap into diverse regions without geopolitical baggage gives it an edge that Hong Kong cannot easily replicate.

Singapore’s government is already planning for the next wave of challenges.

A task force is addressing its lagging capital markets, and banks like OCBC are eyeing opportunities arising from increased Chinese manufacturing investments in Southeast Asia.

With the global trading system facing potential disruptions, Singapore’s adaptability and foresight will likely determine its financial trajectory in the years ahead.

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