Calm before the storm?

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After a small sell-off in the Flow Traders Investment Competition two weeks ago, last week remained relatively calm. Turbulence in the rankings was low, even though the S&P 500 and the Dow Jones are still reaching record highs. Will the water keep smooth, or will there be a storm incoming?

Yet another investment group has become a victim of leverage. Succes is een Keuze achieved the biggest relative loss for a second consecutive week, as they continue to suffer from a basket of turbo’s. Will their portfolio make a turnaround in the upcoming weeks?

Phoenix has taken a hit too and fell, as its M2 was affected by a surge in volatility. Fortunately, the cause has been a nice profit in the past week from a covered call strategy, among other things. As the profit has been their biggest since the commencement of the competition, their volatility almost doubled in size.

Manufacturers in the Eurozone are gaining momentum, which economists consider an important factor for general economic growth. The eurozone Purchasing Managers’ Index (PMI), an index that tracks the health of the manufacturing industry, suggests that expansion of the sector is accelerating. However, European equities fell slightly in the past week, as investors are being held back by political uncertainties.

UK equity has been affected by disappointing earnings from banks in particular. The CFO of Royal Bank of Scotland claimed that “It’s difficult to announce that sort of loss, particularly one of that magnitude.” whilst being interviewed. The bank namely reported a near £7 billion loss this year, which means it has lost £58 billion since it was rescued by the government in 2008. RBS simultaneously announced a new cost-cutting plan and hopes to return to profit next year.

PSA Group, the manufacturer of Peugeots and Citroëns, is planning to take over Opel from General Motors. With the acquisition Carlos Tavares, who successfully cut costs after taking over as CEO in 2014, hopes to achieve further savings by shared R&D costs and other synergies. PSA group would promote Opel in markets where its other brands are losing presence and could possible enter the US car market. Obstacles are still in the way, as governments and labour unions in the UK and Germany have expressed their concerns regarding job losses. PSA also has to deal with a multibillion deficit in Opel’s pensions, which one analyst described as “hellishly large”.

Written by Lemeng Li

The Corporate Tax Avoidance Toolbox

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Summary

  • Tax Avoidance is legal, frequent and encouraged by competition, countries and consultants
  • Intellectual Property is one of the biggest tools used in tax avoidance
  • There is a thin barrier between Tax Avoidance and Tax Evasion
  • The lawyer & accountant always win

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Investment Groups taking profits?

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This week we saw global markets continue to rally, as the S&P has avoided losses of more than 1% on a day for 82 days, which is the longest streak since November 2006. However, 19 of the 40 groups took profits (or losses) on one or more positions, are the groups onto something? Read more

Make bears great again: good things can’t last forever

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Summary:

  • An 8-year bull market is something to celebrate, but we have to prepare for what is coming next.
  • Trump’s plans may get the economy closer to a bear market.
  • If we take in consideration the history and statistics of elections, Trump will face a relatively quiet stock performance in the next months.

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