A Temporary End to the US Shutdown | Flow Traders Investment Competition | Week 12

Global stock market was rather steady last week with Dow Jones Industrial Average finishing slightly higher by +0.82% and S&P 500 closing +0.51% higher. Investors keep an eye on the progress of U.S.-China trades and the pan-European Stoxx 600 rallied closing +0.62% higher, with trade sensitive stocks being top gainers. Meanwhile, FTSE finished last week going down by -2.25%.

In US, Trump signed legislation to end shutdown temporarily on the 25th. During the shutdown, the US economy lost $6bn due to decreased productivities and lay-offs according to S&P. On the 25th, two of the three main airports in New York area had delays because of staff shortages and continuous surveys revealed intensively negative public sentiment over the shutdown. Trump mentioned about the possibility of another shutdown on February 15th if no fair deal is made on the barrier construction.

After May’s Brexit deal was turned down, the Brexit impasse is continuing and Ireland refused the suggestion for the country to join the UK. Helen McEntee, Ireland’s Europe minister, mentioned about polls showing 92% of the population prefer to stay in EU and said quitting EU is not in the options being considered. With nothing being certain, British companies are preparing for a no-deal Brexit planning on moving their operations out of UK. Meanwhile, Germany reached an agreement on phasing out coal-fired power by 2038. Germany currently has coal power reliance of 40%. A review on 3032 will see if it can make the dead line earlier.

Finally, here are some updates on our investment competition. This week, while Victoria has maintained its first place with a pharmaceutical and high luxury brand stocks, Atlas Capital went 23 places up and CFQ 12 places. Overall, each group rebounded from recent losses with most of the groups recording positive gains or losses of less than 2%. Hercules, although suffered from big losses in the last few weeks, took a quick profit on Earthports with a return of 26%.

by Ahrim Kim