Markets rebound as coronavirus fears fade | Flow Traders Investment Competition | Week 15

Last week showed some small rebounds in the markets as coronavirus fears faded. The AEX and Euro Stoxx 50 showed increases of 4,57% and 4,33% respectively. The US also rebounded quite a bit, as the S&P 500 and DJIA increased 3,17% and 3,00% respectively. The NASDAQ topped that with an increase of 4,04%.

Part of the increase of the NASDAQ can be attributed to the incredible rally of Tesla. Tesla reached a price 962 USD last week, more than double the price of Tesla at the start of 2020. The rally got corrected quickly, as analysts stepped on the breaks by pointing out uncertainty in China manufacturing due to the coronavirus. The stock got hit by a 22% correction and is now trading at 747 USD (still an increase of 76% year to date). Tesla is the first publicly listed carmaker to reach a valuation of more than 100 billion USD and is now worth more than Ford, Peugeot, BMW and Fiat Chrysler combined. This valuation is certainly questionable, as the company hasn’t had a single full profitable year yet. The rally seems to have originated from beating estimated on EPS for Q4 of 2019 and an increase in production numbers. The biggest winner is Elon Musk himself, as he owns about 20% of Tesla’s stock. He saw his net worth increase by about 18 billion USD. But things could get even more exciting for the ambitious engineer, as sustaining a 150 billion USD market cap is the second milestone of twelve which would grant him a 50 billion USD compensation package.

Elon Musk was not the only one in a good mood last week, as, unsurprisingly, The Donald got acquitted from both articles of impeachment filed against him. What was surprising, however, was that for the first time in history a senator voted for the impeachment of a president from his own party. Mitt Romney, a republican, found Donald Trump guilty of abuse of power, one of two articles of impeachment filed against him. It did very little for the outcome, however, as impeachment will only commence when two-third of the senate votes to impeach. Seen the fact that the senate consists of 53 republicans, the impeachment trial was a long shot to begin with.

Next week we will see earnings of companies like Lyft, Kraft Heinz and Under Armour, which all reported disappointing earnings in 2018. Let’s see if 2019 was a better year for them.

On to the investment competition. The top two remains unchanged since last week, wit MBA Investors and Omega Investments still on top. Mayfair Investors and Porter Capital partners have both lost their position in the top five. Fundamenta Fortis, Conquistadores Capital and Borsa Valori all climbed two places and are now numbers three, four and five respectively. Porter Capital, despite losing six places, gained the most this week with an impressive 9.45% return. With 9 places, Victoria is the biggest riser of this week: the winners of last year gained 7.98%.

Robert Foppen