Central banks worldwide took on the spotlights in the past week with the FED raising interest rates with a quarter percent. Although equity markets delivered mixed performances, most of the investment groups had to take a loss. Especially movements in the retail and consumer sector left a scar in our investment competition. Meanwhile, TMT Investments exited the competition by withdrawing all liquidity from their account.
Although central banks of the UK and Canada did not raise interest rates, clear signals were given that easing monetary policy might come to an end. Both pound sterling and the canadian dollar gained against the greenback, who struggled to keep up a rally caused by the FED’s rate hike. Doubts about the strength of US inflation and the government’s abilities to deliver on domestic policies and fiscal stimulation are holding back investors.
Technology companies in the US continued their fall in the past week. The negative mood on the market was fuelled by valuation levels that are considered too high by investment managers according to a survey by Merrill Lynch. These market conditions did not hinder Aequitas Capital in search for alpha, who came in first on basis of weekly return by choosing specific American technology stocks
Amazon, who is dominating e-commerce sales in the United States, has announced that it will buy the grocery group Whole Foods Markets for $13.7 billion. By acquiring Whole Food’s more than 450 upmarket physical stores in the US, Amazon is stepping up its ambitions to enter the food sector and compete with traditional retailers such as Walmart. While the tech company led by billionaire Jeff Bezos has been exploring the traditional retail market by opening physical bookstores, Walmart is expanding its strategy too by setting up delivery services.
In our competition, CMG Investments immediately saw their positions in the retail sector decrease in value. Porto D’Oro felt the movements in the market even more and lost the most of the week by having a sprinter long in the supermarket group Ahold Delhaize.
Furthermore in the competition, some fashion loving B&R members have enabled their groups to make nice returns. Liquid Gold gained around 10% in just two weeks on Michael Kors, whose stock price rebounded after an earnings-fuelled sell-off. Borsa Valori closed their position in Industria de Diseno Textil (Inditex) after making more than 10% on the Spanish fashion retail group over the course of three months.
Written by Lemeng Li