EU unemployment rate hits 11-year low | Flow Traders Investment Competition | Week 5

A mild increase in value on the markets this week, with the S&P 500 gaining 0.96%, and the AEX increasing by 0.67 percent. Eurostoxx 50 grew by as little as 0.16 percent, while NASDAQ changed the most with an increase of 1.47%. The Dow Jones Industrial Average increased by 0.86%, and the VIX dropped a mere 4.6 percent from last week.

The pace of the US economy’s expansion has picked up, with recent data showing the gross domestic product in the third quarter rose more than initially forecasted. The revised figure published by the Department of Commerce is an annualized 2.1% compared with the first estimate of 1.9%. This improvement in the economic data further reduces the risk of recession in the near future. Even though this might seem good news, a lot of economists say that growth is sharply slowing down in the current quarter. The Labor Department also came with good news, saying US weekly jobless claims fell by 15 thousand, suggesting a softening in the current labor market conditions. Albeit the good news, the governor of the Fed, Lael Brainard, recommended the central bank to use caps on interest rates the next time short-term rates get near zero. The suggestion is part of a review the central bank is doing of the tools it used to respond to the last economic downturn. US consumer confidence fell for a fourth consecutive month, with the consumer confidence index dropping to 125.5, while economists polled by Dow Jones expected the index to rise to 126.6. Expectations for the holiday shopping season are yet very strong though.

Onto Europe, where the Eurozone inflation picked up last week. It accelerated faster than expected during November according to the latest official figures, with food and services prices helping to push the rate to 1,0%, up from 0,7% in October. The European Central Bank aims to keep inflation below, but close to 2 percent. However, over the past few years, inflation has failed to pick up despite a series of stimulating actions from the central bank. Europe’s unemployment rate has fallen to its lowest rate for 11 years. The jobless rate fell to 7,5% in October, which is down from 7,6% the month before and is the lowest rate since July 2008. U.K. data showed consumer confidence stuck at its lowest level since 2013 in November due to a recent escalation in tensions over Hong Kong protests between the US and China.

Another week passed in the Flow Traders Investment Competition. Concordia International has kept its first place this week, with an M2 of 6,40% while Fundamenta Fortis rose to second place as Basura dropped the most spots this week to the 37th spot with an M2 of –0.41 percent. Gaining 28 spots this week and ending up 15th is INVICTI, finishing with an M2 of 0.86%. MBA Investors can take home the highest return until this week, resulting in 4.75 percent.

Sebastian Cornielje