Flow Traders Investment Competition: Dow Jones drops significantly

The US industrial index has been dropping for the past week, as especially tech companies have been sliding. Amazon and other ecommerce firms experienced difficulties as a supreme court ruling will allow US states to collect sales taxes on online sales. Furthermore, Intel’s CEO resigned after it became clear he was having an affair with an employee. US treasuries and the dollar also fell a bit, but not as much.

Oil prices also fell a bit, as Saudi Arabia is pushing suppliers to increase output. Although the road to an OPEC agreement will be long, lower oil prices are a good possibility. This might benefit the US, as Trump has repeatedly pushed OPEC to lower prices. Iran still resists an increase in the oil supply though, which might make a deal hard to reach. In addition, Venezuela’s poor production has helped oil prices rise as well. Keep an eye out for changing oil prices in the future as they might significantly affect your portfolio.

In South America, Argentina has managed to win back its status as an emerging market on the MSCI index, which will help pour investment into Argentina on top of the IMF bailout they already receive. Argentina was downgraded in 2009 to a ‘frontier market’ because of the countries’ political and economic situation, but things now seem to return to a somewhat normal situation. Hopefully, this leads to a better performing Argentine economy in the future.

As for the Investment Competition, most groups saw a loss this week. One group that still did well is Invequity. The reason they still made 1.3% is that rather than investing in traditional equities or bonds, they decided to invest in crypto and thus avoid a correlation to the market. A group that did not do too well is Liquid Gold. They lost 4.57% because of their investment in Xylem Inc, an American water technology provider. Clearly, neither water or oil seems to be the liquid gold as of late.

In terms of the top groups in the competition, not much has changed. However, Primus is the only group in the top five to have made somewhat of a profit, and thus their position as second in the competition is solidified. With only a few weeks to go, it seems that Rising is the most likely winner of the competition. However, there might still be an event that changes things up, so if your group is not in the top league, don’t give up just yet!

Written by Xander Gelink