Flow Traders Investment Competition: Trump triumphs with his new tax bill

The Republicans successfully passed their new tax legislation. However Trump’s administration is under pressure from the Russia investigation. Wall Street could either benefit or lose out. Cryptocurrency is still booming, but might be in for a correction.

The US Senate has approved the largest tax overhaul since 1986, which could push the S&P 500 to even greater heights after it had already gained 1.61% last week. In addition, Bitcoin continues to rally as it went from $8,645,20 per Bitcoin to $11,088.50 per Bitcoin in a week. Does it provide an interesting investment opportunity or is it merely a bubble waiting to burst?

Though the S&P rallied, the AEX dropped with 0.42%, and the Eurostoxx 200 Large index dropped as well, with 0.84%. It seems US markets keep pushing higher, most likely due to revised tax regulation pushed by the Trump administration. It is not all good news for America though. Trump’s former national security adviser has pledged guilty to misleading the FBI and there are fears this could spell trouble for Trump himself as well.

Most groups made a loss last week, with a few notable exceptions. Porto, for example, managed to make a profit of over a hundred euros on a Basic Fit turbo. Batavia also did very well on their Bank of America play, a position which increased by more than a hundred euros as well, with a potential further increase given that Trump’s tax legislation was especially well received by banks. ‘B.R.O.O.D. Beleggers’ portfolio enjoyed a significant increase too, growing by 1.90%.

Borsa Valori has lost their top position to Primus, and unfortunately success might not be a choice after all, seeing as ‘Succes is een keuze’ is still last placed in the competition. One choice you do have to make is which stocks to buy though. As we said in the last competition update, it’s going to be a great time for stock pickers (assuming you pick the right stocks). Therefore, we hope you paid attention during the Fundamental Analysis 2 academy of last week so you will be able to pick the best ones.

An interesting industry to look at could be FinTech. According to the Financial Times, investment banks are getting more interested in retail banking because it seems to offer higher returns on equity. And within retail banking, FinTech is becoming more and more relevant. Stocks such as PayPal ($PYPL) have seen a steady increase over the past year, although it has dropped slightly last week.

Written by Xander Gelink