Here we go! | Flow Traders Investment Competition | Week 1

Very little movement in the markets this week, with the S&P 500 and AEX respectively moving 1.15 and -0.44 percent. Eurostoxx 50 only gained a mere 0.14%, Nasdaq 1.10% and the Dow Jones Industrial Average gained 1.03 percent. The VIX fell 3.97% this week.

In the US, Google has decided to move into the wearables market, deciding to acquire the smart watch company Fitbit, an important step towards their goals of competing with the Apple Watch. Google’s parent company Alphabet paid 2,1 billion dollars for the company, hoping to complete the acquisition at the start of next year, after approval of shareholders and the supervisory board. WeWork, a workspace-sharing company, has lost more than 45 billion dollars the past two months in value because of their excessive expansion the past year. The unicorn’s founder Neumann has been bought out by the investment firm Softbank, and accompanied by an 18,5 billion dollar cash infusion they are going to restructure the company. Although investors thought the chairman of the Fed Jerome Powell is going to cut interest rates by a quarter point, the current consensus view is that the Fed will now pause in its rate cutting, and watch the economy for further moves. Despite the current trade tensions and tariffs Buffet’s Berkshire tops profit forecasts with a record amount of 128.2 billion dollars in cash.

In Europe, a merger between the PSA group and Fiat-Crysler will result in the company becoming the fourth largest car producer in the world. Rumor has it that Tavares will be named CEO of the combined automaker, and that the French government won’t interfere with the plans, despite its stake in PSA Group. Since the nearing of Brexit tension between EU member states is rising, who will pay the UK’s share of the budget? Most fingers are pointed at western Europe of course, especially Germany, but exact figures aren’t published yet. The Dutch government decided to write an on-time 500 million euro cheque to counter emissions, mainly due to the fact that the government’s policy has been laid flat because of recent strikes and emission results. About 18.000 building projects are currently stalled until further policy concerning emission is implemented by the government. Analysts from ABN Amro expect the losses will be around 14 billion euro’s due to the emission crisis, as well as seventeen thousand jobs in construction.

Thursday night the Flow Traders Investment Competition was opened. Due to insufficient data points, the ranking of this week will be based on absolute return instead of the M2. Only a few of the investment groups have already invested this year and we see that Hermanszoon Capital tops the first standings of this year’s edition, followed by Basura while Metrics Fund and Merx share the third place. We wish all investment groups best of luck in their endeavors to achieve this year’s first place.

Written by Sebastian Cornielje