US Corona aid now totalling 3 trillion dollars | Flow Traders Investment Competition | Week 26

Markets seem to have recovered after the contraction occurring earlier in the week, with WTI Crude oil dropping to historic lows. The AEX ended up decreasing by a mere 0.49 percent this week, with the S&P 500 declining 0.31%. Eurostoxx 50 lost the most at week’s end with a –2.93% result. The Dow Jones Industrial Average lost 1.33 percent, followed by the NASDAQ, increasing a mere 0.49% during the week. The VIX ended up declining steeply after the contraction, resulting in a 15.1 percent decrease at week’s end.

In Europe, the EU is still debating about concrete measures being taken concerning the Coronavirus, yet there has been made a program consisting of major financial support by the ECB, the so-called Pandemic Emergency Purchase Program, or PEPP. As of now, it consists of 750 billion euros aiming to support liquidity and improving economic conditions within the Eurozone. The 750 billion Euro relief package from the ECB is aimed at purchasing private and public sector securities, emphasizing the aim to soothe all sectors with its economic support, both families, firms, as well as banks and governments. Mainly due to uncertainty within the European Union did the investor sentiment concerning the Euro decrease the past week, resulting in the Eurostoxx 600 closing lower with more than 1%. Risk sentiment has recovered slightly now that the Remedesivir drug report from Gilead, proving to be ineffective, is slowly leaving public sight.

In the US, President Trump’s immigration ban might prove to have devastating results for the technology sector within America, given that a rising number of migrant workers derive from Asia, and are a vital component of the growing industry. On top of that, the US unemployment claims have hit over 26 million this week amid the Coronacrisis, resulting in the same amount of jobs won since the great crisis in 2008. Economists all over the country have observed that the current economic contraction has similarities with the great depression in the 1930s, and might worsen even more in the coming months. The good news is that both the Fed, as well as Congress, have agreed to do whatever it takes to counter Corona’s impact, resulting in another Covid-19 relief package of almost 500 billion US-dollars this week, totaling the current financial aid at 3 trillion dollars. Most of the money is aimed at helping small businesses, hospitals, and recently unemployed citizens. The durable goods orders dropped by 14.4%, yet the nondefense capital goods order who was expected to drop by 6%, actually increased by 0.1 percent. Sadly the consumer sentiment hasn’t proven as progressive, falling to 71.8 this week.

Next week we can expect some major quarterly earnings reports coming out, including Amazon, Apple, Facebook, Microsoft, and Berkshire Hathaway.

On to the Flow Traders Investment Competition, Clear Water Group has held on to the first place with a 35.06% M2, followed by Concordia International with an M2 of 8.27%. The investment groups dropping the most spots are Next Generation and CMG Investments, both dropping 5 spots to 9th and 34th place respectively. The investment group moving up the most was Alpha Investments, moving up 8 places to the 15th spot.

Sebastian Cornielje