More economic data: US home sales have dipped, but remain sharply higher than a year ago.

The pending US home sales index dropped by 2.6% in November, a month in which Covid-19 cases rose sharply across America.

But, sales are still 16.4% higher than a year ago, partly due to pent-up demand following the lockdown earlier this year. Also (as in the UK) some families are keen to move to larger, rural properties -- plus, there’s a shortage of houses on the market.

Economic news: The US trade deficit in goods widened in November to $84.8bn, from the $80.4bn recorded in October.

Marketwatch has spotted that this is a record high, “reflecting weaker US exports tied to the coronavirus pandemic”.

The Census Bureau reported that exports increased $1.1bn month on month (to $127.2bn), while imports rose $5.5bn (to $212bn), pushing the goods deficit up by around 5%.

Russ Mould of investment platform AJ Bell has a good take on bitcoin, and its prospects for 2021:

“Nelson Bunker Hunt once espoused the view that ‘Almost anything is better than paper money. Any fool can run a printing press.’ Although the magnate’s attempt to corner the silver market came to grief in 1980 some investors appear to agree with him right now, given how gold and especially bitcoin are performing.

Gold reached a new all-time high in 2020 and bitcoin has set a string of new peaks, more than trebling in the second half of the year to pass the $28,000 mark for the first time.

Some will argue that there is more to come from both gold and bitcoin, especially if governments keep piling up debts and central banks do their best to fund that borrowing through the backdoor with QE, zero interest rates and bond yield manipulation, thanks to their scarcity value relative to cash. Bitcoin’s supply is fixed at 21m units and gold supply grows at barely 2% a year, as the metal is hard to find and expensive to mine.

Others will argue neither gold nor bitcoin have intrinsic value, as they do not generate cash. Some will even argue that bitcoin is just a glorified Ponzi scheme, as new money flows in at the bottom to help the smart money that got in early bail out at the top. In 2021 investors will get their chance to pay their money and take their choice as to whether they see bitcoin and gold as stores of value, and useful portfolio diversifiers, as governments and central banks conjure money out of thin air, or more trouble than whatever they may (or may not) be worth.

Supporters of bitcoin argue that it is the future of money, free from government interference and money-printing devaluation, and a legitimate asset with growing support from major investors and services like PayPay.

But there are potential hurdles ahead, and sceptics.

Earlier this week, Jesse Cohen, senior analyst at uk.Investing.com, predicted that bitcoin will face further scrutiny from regulators in the United States and Asia.

While many expect the Bitcoin rally to continue in 2021, I’m more concerned with what the Biden administration could mean for cryptos. Incoming Treasury Secretary Janet Yellen in the past has warned investors over Bitcoin during her time as Fed Chair, calling it a highly speculative asset and not a stable store of value.

I expect Bitcoin to remain highly volatile to the downside in the new year, given the potential for more scrutiny and tighter regulation. That should see prices fall back from their record highs, with the prospect of increased regulation being the most important factor affecting Bitcoin in 2021.

Economics professor Nouriel Roubini – a long-time critic of bitcoin – is blunter, telling Yahoo Finance last week that it was a “hyperbolic bubble” that will go bust.

There is no use. There is no utility. The only thing is a speculative, self-fulfilling kind of rise, and that rise is driven totally by manipulation.

The price of Bitcoin is totally manipulated by a bunch of people, by a bunch of whales. It doesn’t have any fundamental value.

Roubini also argues that central banks are going to introduce digital currencies, which will revolutionise payment systems. More details here.

Britain’s housing market has shrugged off the economic shock of the Covid-19 pandemic this year, but 2021 could see a slowdown.

UK house prices inflation hit a new six-year high in December, Nationwide reported this morning, with prices 7.3% higher than a year ago. Prices rose by 0.8% during this month alone.

Demand for larger houses from home-bound former commuters was one factor, alongside the government’s stamp duty holiday … and the fact that many households have been growing their savings during the lockdown.

Detached houses have seen the fastest rise, while flats have lagged, as families have moved out of cities to rural areas in search of more space

Robert Gardner, Nationwide’s chief economist, explains:

The pandemic itself also boosted activity, as life in lockdown and changes to working patterns led many to re-evaluate their housing needs. Our research earlier this year indicated increased demand for less densely populated locations and different property types.

This helps to explain why detached properties have seen greater price gains in recent quarters, while flats have underperformed.

All regions saw a pickup in house price growth rates over the last quarter, with East Midlands the strongest region.

But with unemployment set to rise in 2021, and the stamp duty waiver ending in the spring, some forecasters predict a slowdown in 2021.

As Gardner says:

The housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.

More here:

Here’s our news story on bitcoin’s surge:

Bitcoin, incidentally, has dipped back from its latest record high ($28,575 on my Reuters), and is trading around $27,900.

That’s still a gain of 3.7% today (roughly $1,000), meaning the cryptocurrency is still up over 40% this month alone.

Reuters flags up that limited supply is supporting bitcoin (there are currently over 18m in existence, with a hard cap of 21m built into the system).

Investors said limited supply of bitcoin – produced by so-called “mining” computers that validate blocks of transactions by competing to solve mathematical puzzles – has helped power upward moves over recent days.

Many recent entrants to the market are holding onto positions, they said.

“The supply side to the bitcoin market will remain tight,” said Jacob Skaaning of crypto hedge fund ARK36.

The latest gains took bitcoin’s market capitalisation past $518bn, according to industry website CoinMarketCap.

Financial experts and business groups are welcoming the news that the UK has approved the Oxford/AstraZeneca Covid-19 vaccine.

Janet Mui, investment director at wealth manager Brewin Dolphin, says it’s a turning point in the fight against the pandemic:

Critically, the vaccine has advantage on storage, distribution and affordability than its peers so it can accelerate the global vaccination efforts. The UK government has pre-ordered 100m doses of it so a large population will be able to receive the treatment relatively quickly. The vaccine’s long-term shelf life and its ease of storage will allow vaccination to be done more efficiently.

The vaccine is much cheaper than its peers so it will ensure more equitable access, in particular for developing countries. The prospect of more rapid and widespread inoculation will be a shot of confidence to markets as the Covid-19 struggle intensifies.

Matthew Fell, chief UK policy director at the CBI, cautions that tough precautions will still be needed in the short-term, meaning businesses need more support.

Approval of the Oxford/AstraZeneca vaccine is hugely positive news, and a real feather in the cap for the UK life sciences sector. It adds another weapon to the UK’s pandemic arsenal, bringing us one step closer to returning to a more normal way of life.

This is not the end of the battle, though. Rising infection rates and new strains mean tough precautions remain necessary in the short-term. Businesses understand this and continue to do their utmost to protect their staff and customers.

In turn, government must continue to do all it can to protect businesses. It must ensure ongoing restrictions are grounded in evidence, continue to roll out an improved testing regime which will enable more parts of the economy to reopen safely, and ensure financial support for the hardest-hit sectors remains in place until the pandemic is past.

Naeem Aslam, chief market analyst at Avatrade, agrees out that the health emergency is still critical:

On the Covid-19 front, Oxford-AstraZeneca’s Covid vaccine finally got the green light from lawmakers today.

This is certainly good news because there is no doubt that the current coronavirus vaccine demand is nowhere close enough to supply. Another major company getting its vaccine approved by the lawmakers will further improve the coronavirus situation as the number of Covid cases are ticking higher over in Europe and in the US.

The US is logging nearly 189,905 new coronavirus cases daily now, and more than 2,000 people are losing their lives every day.

European stock markets have slightly higher in early trading this morning.

In London, the FTSE 100 is currently up just 5 points or 0.08% at 6,607.

Yesterday, it jumped by nearly 1.6% amid hopes that the Oxford/AstraZeneca vaccine would soon be approved in the UK, so today’s good news may be priced in.

UK-focused stocks are among the risers, including banks Barclays and NatWest, housebuilders Taylor Wimpey (+1.2%) and Barratt Development (+1.1%), and hotel and restaurant operator Whitbread (+1.6%).

They should all benefit from a return to economic normality next year, once Covid-19 vaccines are rolled out.

European markets are also calm, with France’s CAC up 0.17% and Germany’s DAX flat (again, after rallying earlier this week).

While bitcoin is rocketing, gold – the traditional store of value – is flat this morning at $1,878 per ounce.

Back in August, gold did hit a record high over $2,000/oz, but has dropped back since.

Brad Bechtel of Jefferies reckons the two assets will be battling it out next year:

Gold continues to languish around $1,875 and although that is still the market’s preferred store of value, the ancient relic is indeed looking a little behind the times.

Will be interesting to watch these two assets duke it out in the new year with each fighting for dominance as the alternative store of wealth for the rapid fiat currency debasement going on in the financial system.

Here’s Bloomberg’s take:

Bitcoin has almost quadrupled in value this year amid the global coronavirus pandemic, while the wider Bloomberg Galaxy Crypto Index tracking the largest digital currencies is up about 270% as rival coins such as Ether have also rallied.

The latest price surge continues to divide opinion between those who view cryptocurrencies as a hedge against dollar weakness and inflation risk, and others who question Bitcoin’s validity as an asset class given its speculative nature and boom-and-bust cycles.

While a growing institutional presence has been part of the narrative of the current bull run, we may see increased retail interest in Bitcoin as a form of digital gold,” Paolo Ardoino, chief technology officer of crypto exchange Bitfinex, said in an email.