Geopolitical Turmoil | Flow Traders Investment Competition | Week 11

Despite all the negativity in the news last week, markets showed some nice gains. In the US the S&P 500 and the DJIA gained 0,94% and 0,66% respectively. The NASDAQ topped that with a rise of 1,75%. On the other side of the Atlantic the Eurostoxx gained 0,43% and the AEX showed a small decline of 0,10%. The VIX declined with 10,41%.

On January 3rd, the assassination of Quassem Soleimani took place, ordered by Donald Trump. Soleimani was the top general of Iran and was (according to The Donald) planning military action against the US. Of course, Iran did not take Trump’s action well, and promised retaliation. On Wednesday, Iran delivered on its promise and fired around 16 missiles on a US base in Iraq, of which 12 missiles hit the target. According to Washington, no US soldiers were killed in the incident. To add fuel to the fire, a few hours later a Ukrainian jet was shot down minutes after taking off from Tehran, killing all 176 passengers and the crew. On Saturday, Iran admitted it had mistakenly shot down the plane. The statement made by the Iranian military explained that the airplane, while turning, looked to be getting close to a military base and was identified by radar systems as a hostile object. By human error the airplane was shot down.

The action is seen as a huge embarrassment for the Iranian government, although the government could not help but shift a little bit of the blame to the US for causing the Iranian military to be extra alert after multiple threats from the US. Donald Trump announced not to be planning any more military action against Iran, but instead, to continue hitting the country with more economic sanctions. The US-Iran tensions caused a lot of volatility on the oil markets. Before the assassination of Soleimani, Brent Oil was trading for 66 USD. While tensions were rising, the price rose as high as 70 USD, only to come down to around 65 USD after Trump’s announcement. 

Next week, The president of the European Central Bank, Lagarde, is expected to speak on Thursday. In the speech, hints can often be picked up with regards to upcoming ECB monetary policy, interest rates and short-term trends.

On to the investment competition, where Omega Investments is continuing its five week streak of holding first position. A few positions have switched positions in the top five, but it holds the same names for now. Midas Investments has made the biggest jump with an impressive thirteen places and INVICTI fell twelve places. Floryn enjoyed the highest weekly return with 7.75%, which sees them climb eight places.

 

 

Robert Foppen