Stocks rise amid new sources of uncertainty | Flow Traders Investment Competition | Week 16

Stocks fluctuated between gains and losses before finishing Friday at new all-time highs, in the case of the S&P 500 and Nasdaq. This performance was explained by a late-day report which stated that the Trump administration was considering a tax incentive for Americans to buy stocks. Despite continued increases in Coronavirus cases in China, stocks secured weekly gains, with the S&P 500 rising 1.6%, the Dow Jones added 1.0%, and the Nasdaq rallied 2.2%., while the VIX decreased 11.6%. The Eurostoxx 50 index and the AEX index increased in the same way, both rallying 1.1% and 2.1%, respectively.

According to Fed Chair Jerome Powell, the Fed is also “closely monitoring” the deadly outbreak of the Coronavirus, which has now been officially named COVID-19. He also mentioned that if incoming information about the US economy remains broadly consistent with the FED’s outlook, the current stance of monetary policy will likely remain appropriate.

Worries about the European economy emerged on Wednesday as the euro fell to its weakest level against the dollar since 2017. This negative sentiment was explained by the expectation of the impact that Coronavirus might have over an already weakened German economy. At the same time, it is expected that Deutsche Bank will post a contraction in the fourth quarter. Moreover, rumors of a succession battle at the top of the German government, a slump in Eurozone industrial production, and fears about the financial health of Italy contributed to the weakening of the euro currency.

Greece’s bond rally reached another landmark during the last week as the country’s 10-year yield dropped below 1% for the first time. The recent drop in borrowing costs represents a significant turnaround since the height of the Eurozone debt crisis when the country’s 10-year yield spiked above 30%.

Crude oil climbed back over US$ 50 per barrel as Russia said it was studying an OPEC+ proposal to curb crude output by a further 600 thousand barrels per day. However, Energy Minister Alexander Novak did not specify when the country would make a decision.

Now let’s take a look at what happened in the Flow Traders Investment Competition. Still leading the competition is MBA Investors, with Omega Investments following closely. Phoenix posted the highest return this past week, rising 4.99%. Accompanying their high returns, they also rose the most places: 8. They are now in 33rd place, so let’s see if they can keep up the pace.

Gino Beteta