After the rough and unpredictable nature of last week, the first week of February was a warm welcome for investors due to positive returns all across the board. The Dow Jones managed to gain an impressive 3.89%, the S&P 500 an even more impressive 4.65%, and the NASDAQ a stunning 6.01% over the past 7 days. This up movement was somewhat driven by the progress of the vaccine distribution in the United States, as well as positive expectations for additional fiscal stimulus. The US Job report released by the bureau of labor statistics on Friday, although falling short of expectations, was no reason to suppress the hopes of a strong economic rebound at the end of the year. Back in Europe, indices failed to outperform their American counterparts but still posted positive returns nonetheless. The FTSE 100 gained 1.28%, whilst our AEX managed to climb 2.53%.
Although Dutch equities performed well over the last week, there is still much ambiguity about the expected duration of the current lockdown measures. Although it was initially planned to lift the evening curfew on the 9’th of February, the recent advance of the British mutation of the Covid-19 virus on Dutch soil has thrown a spanner in the works. Policymakers and the Dutch outbreak management team are still undecided whether to continue the current lockdown measures or not, and the path forward is therefore unclear and uncertain. Furthermore, as shops and restaurants have been commanded to remain closed until early March, the Dutch economy will likely face additional suffering for the foreseeable future. Although the vaccination effort is slowly but surely gaining momentum, companies and investors can only hope that things will return to something that somewhat resembles “normal” soon.
Something that did (somewhat) return to normal, was the exuberance in US equity markets related to the illustrious “meme stocks”. The GameStop saga came to a screeching halt, as the share price plummeted from $316,55 on Monday to $63,77 on Friday, a loss close to -80%. It seems that much of the traders that got in early wanted to realize their insane returns and decided en masse to liquidate their positions. The same occurred with all other hype stocks, such as AMC, Bed Bath & Beyond, and Kodak. Although the “anti-Wall Street'' narrative that originated from Reddit seems to have lost some steam, it remains far from over. During the week, Silver became the new target for the hordes of Robinhood traders, resulting in significant volatility in the commodity and all related companies. If one wants to place a bet on what asset is likely to generate some excessive returns (and losses) in the foreseeable future, closely monitoring r/wallstreetbets seems to be the way to go.
However, the Reddit saga pales in comparison to our Flow Traders investment competition as we enter week 14, as the battle for the top spot rages on. Fundamenta Fortis remains on top of the competition as it has for several weeks now, as they are the top performer with their M2 of 15,00%. CFQ, Omega investments, and Alpha investments are on Fundamenta’s tail, however, as multiple groups are within reach of the coveted first place. Next Generation also displays some impressive performance, as they gained 14,77% in returns over the past week, which now amounts to an incredible total of 32,87%. The Quants of Minerva were less fortunate, as they saw 16,63% of their returns being wiped out over the past week.
In our second investment competition, Aurelia stands lonely on top of all others, with their M2 of 9,40%. They are far ahead of the number 2 contender, Das Kapital, with their respective M2 of 2,99%. All other groups in the competition have not managed to reel in any total positive returns, but IValue is trying hard to get back in the race by gaining over 5,8% last week.