A Persisting Feud Between the Fed and the White House | Flow Traders Investment Competition | Week 26

Very little overall movement this week, with the Dow dropping as little as 0,2 percent, and the VIX with a mere 0.5%. S&P 500 gained by 0,17%, and the FTSE and NASDAQ resulted in –0,72 and 0,18 respectively.

The US unemployment rate in April falls to its lowest point in nearly 50 years as employers ramp up hiring. The government questions whether enough workers can be drawn into the labor market to sustain the momentum of a nearly decadelong expansion. The feud between the Fed and the White House is still going strong, which was evident seeing there was another clash between the both on Friday, this time publicly. Several high officials at the Federal Reserve Bank, like the president at St. Louis James Bullard, think that at this time rate cuts are unnecessary. The Vice President Mike Pence on the other hand, thinks rate cuts are essential, saying the American economy’s engine could handle more fuel.

In Europe, the Scandinavian airline SAS has met a new agreement with its pilots, after a 7-day strike by about 1500 captains. The pilots will get a 3,5% raise in 2019, 3,0% in 2020 and finally 4,0% in 2021. The strike resulted in 4,000 flights being cancelled, and almost 400,000 passengers being aggrieved. Due to the increasing price in kerosene, and the unfortunate result in certain currency-effects, the merged airline Air France-KLM suffered a 320 million euro loss this quarter. Because of the friction between the two airlines, and the large amount of strikes that took place last year, the company is currently going through turbulent times. Besides al the recent uproar concerning the reputation of Huawei, KPN still decided to hire the company to place antennas for the new 5G network. The US is still putting pressure on its allies to avoid cooperating with China.

Research shows that a record high percentage has been reached, concerning the amount of Chinese student in Dutch universities, namely 10 percent at Wageningen university. China is increasing the amount of food technology projects, which might be the reason for the high percentage of enrolled students, besides the fact that Wageningen university’s reputation is held in high regard.

Next is this week’s investment competition update. Omega Investments is still leading this week and gained on Emmerson and sold their position in Celgene Corp. Meanwhile, MBA Investors loses on Sylvania Platinum & Vanguard S&P 500 ETF and sold their Advanced Metallurgical Group turbo long with a nice profit, nontheless the group fell again by two places. Hermanszoon Capital lost on AbbVie, BE Semiconductor Industries and Virtu Financial. K2 capital gained two weeks in a row on Take Two Interactive Software and Paypal holdings. FInally, Merx gained on Alibaba turbo long, Turtle Beach Corp and DAX 2x turbo long.

Written by Sebastian Cornielje

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