Getting Brexit done, again.. | Flow Traders Investment Competition | Week 7

Mostly black numbers in Europe and the US this week. Let’s start with the US, where the S&P 500 gained 0,73% and the Dow Jones Industrial Average gained 0,43%. The NASDAQ closed 0,91% higher than the week before. Let’s move over to Europe, where the AEX moved up by a small 0,09% and the Eurostoxx gained 0,80%. The VIX decreased by 7,27%. Normally the FTSE 100 is not included in the weekly update, but with last week’s developments, it may be interesting to have a look at it. The FTSE 100 closed 1,57% higher than the week before.

That immediately brings us to the first major news story of last week. The UK’s general election resulted in the biggest win for Boris Johnson and his conservative party since 1987. That means we are in for a treat in early 2020, as the UK will finally “get Brexit done” in January. Both the FTSE 100 and British Pound Sterling moved on the news, as uncertainty is finally nearing its end. However, trouble is not yet over for Boris Johnson, as the Scotland Nationalist Party also had a landslide victory in Scotland. Scotland’s sentiment on Brexit is quite different than that of Britain, as most Scottish citizens wish to remain in the European Union. Scotland now wishes to move out of the UK, so it can remain in the EU. The Scottish Nationalist Party is likely going to try for a second referendum on independence. As was to be expected, Boris is not the biggest fan of this subject. Time will tell how this will turn out.

On the other side of the Northern Pacific Ocean, a phase one deal has been made to start de-escalating the trade war between China and the US. Agreements have been made on issues such as China competitively devaluating its currency and US intellectual property theft, but there is plenty left to fight over, such as the Chinese state stimulating unfair competitiveness by subsidizing Chinese businesses. The deal is expected to be signed in early January and will take effect a month later. It is of course just a phase one deal, but this is a good step towards ending the everlasting trade war, which will hopefully put an end to the uncertainty in global markets and boost the global economy. The US markets saw some small gains on the news and T-Bills saw their yields narrowing.

Next week we will the bi-weekly release of the Manufacturing Purchasing Managers Indexes of both Germany and the EU. For those of you who are new to this concept: it’s an index which measures the activity in, you’ve guessed it, manufacturing purchasing managers. This index is of great importance to traders, as it often leads to overall economic performance.

Let’s talk about investment group performance. Omega Investments managed to keep their pace and has now conquered first place with an impressive M2 of 3,49%. Fundamenta Fortis and Concordia International are still in the top three, with an M2 of 3,06% and 2,99% respectively. Negotium Novum made the biggest jump this week, with an impressive move of 15 places. Conquistadores Capital had less of a good week and fell from the 16th spot all the way down to the 38th.

Robert Foppen