Markets Take a Negative Turn | Flow Traders Investment Competition | Week 18

It was a bad week for the global economy. The S&P 500 dropped with 2.53%. The Dow Jones dropped by 2.58%. The AEX dropped by 1.77% and Euro Stoxx 50 dropped by 1%.

Importantly, the February job growth in the US was disappointing, with 20,000 new jobs added. For comparison, this number was 311,000 in January. Moreover, it seems the trade war with China may not be resolved anytime soon after all. Although China’s government again promised not to cause their currency to be undervalued. Furthermore, at the end of February it seemed like the US and China had agreed on a deal to make sure that China complies with any agreements made. This meant that failure on China’s side to keep to agreements would lead to meeting with US officials and, if necessary, relation by the US in the form of tariffs. Now, China’s government feels that this deal is too one-sided, not giving China the same power as the US to retaliate in case the deal is not lived up to. This has all lead to a stall in the negotiation process, delaying the end of the trade dispute.

Looking ahead, in Europe there is much uncertainty about the Brexit vote coming Tuesday. Of course, there is a very real chance that Prime Minister Theresa May’s deal will once again be rejected.

As an additional note, China’s economic growth is slowing, which we have known for a while now. It is important to note that this will definitely affect not only all of Asia, but the entire world. The trade war is only making this problem worse.

Overall, due to all the above-mentioned events there is a lot of uncertainty on the global scale. This uncertainty has persisted for a long time now and global markets are suffering as a result.

Yet another week has passed in the competition with big gains and losses for some groups! Meanwhile, many others are still unable to beat the AEX.

Notably, Omega Investments had a total gain of 40% on Emmerson. Furthermore, they benefited from their investment in a Gold ETF, gaining 16%. Overall, this launched them to first place in the competition!

On the down side, MBA, Borsa, and Merx faced losses. That is, MBA lost on their Amazon and Advanced Metallurgical Group turbos, dropping 2 places. Merx also had losses on their turbos, namely Alibaba and Global Lithium & Battery Tech ETF. Borsa dropped as much as 9 places due to losses on both CVS Health Corporation and Fedex.

Written by Hazel Alberts