Ongoing dispute between the US and Russia | Flow Traders Investment Competition | Week 13

A slight increase in the global stock market this week, with the Dow Jones Industrial Average finishing with a 1.88% increase, and the S&P 500 increasing by 2.3%. Moreover, the Stoxx Europe 600, as well as the Eurostoxx 50 index increased by 1.5% and 0.44% respectively.  The FTSE closed 3.09% higher this week, and the volatility index decreased by 16.1%.

After the 35-day government shutdown in the US, president Trump failed to get the support of the democrats for the 5.7 billion dollars needed for initial wall construction. The democrats came with attractive alternatives for the wall, including the placement of barriers, such as levee walls, which are placed to control flooding, and Normandy walls, which are basically traffic barriers. Despite the proposals of the democrats, Trump persists on building “a lot of wall” on the south border. The talks started Wednesday and will conclude before the 15th of February. Last Wednesday the markets roared after the approval of the Fed to take a “patient” approach to rate hikes, yet there was little momentum left on Thursday. This might suggest that investors are bracing for more hikes in the future.

Russian president Vladimir Putin has responded aggressively to the US,  which has suspended an important arms treaty between Russia and the US called the INF (Intermediate-Range Nuclear Forces). They suspended the treaty because of Moscow’s alleged violations and also threatened to withdraw from the pact in six months, if Russia would not end said violations. Putin responded on Saturday, a day later, by suspending the INF treaty also, and start the production on hypersonic missiles. A great deal of earnings reports came out last week, where Apple, Microsoft, Facebook, AT&T, Amazon and Exxon Mobil were among the largest of companies. Exxon Mobil had a staggering 39,81% surprise between the forecasted and actual EPS, one of the largest differences in this quarter.

Juan Guaido was recognized by the European Parliament as interim president of Venezuela on Thursday last week. This will increase international pressure on the OPEC members, as well as the (former) socialist president Nicolás Maduro. After the referendum the estimate of jobs that would be moved out of the city of London, were around 65,000, yet London’s Lord Mayor said recently that by the 29th of March it is likely to be below 13,000. Most UK banking jobs have moved to Frankfurt, with JP Morgan moving the most, around 2500 and counting. .

As for the investment competition. Victoria is still first place. Porto d’Oro has moved 18 places with their turbo, long on Gold. STIP has descended 10 places, because of their loss on McDonalds, which closed with a 3.2% decrease.

By Sebastian Cornielje