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Where do we go now? | Flow Traders Investment Competition | Week 18


With the losses of last week fresh in memory, the first week of March was eagerly eyed by investors and was hoped by many to bring about a change of fortune. Although major indices such as the S&P 500(+0.93%), FTSE 100 (+2.27%), and AEX (+0.40%) were able to post positive numbers on the board, sell-offs persisted within technology and foreign equities, with big tech stocks dropping close to 30% over the past three weeks. Additional rises in bond yields caused worries about a potential rise in interest rates, and remarks made by FED honcho Jerome Powell failed to comfort investors across markets, which was likely cause for the NASDAQ dropping an additional 2.06% last week.

The February job report released in the USA on Friday signaled a turnaround, however, as their economy was able to add back the most jobs in four months (379,000) and have their unemployment rate fall back to 6.2%. Although this is still far from the pre-covid peak, the successful vaccination effort seems to provide promising results, which paints a hopeful picture for European economies soon. This likely caused the NASDAQ to have its biggest intraday comeback in over a year, a meteoric rise that European markets are eager to recreate.

Another meteor that has thus far failed to come down back to earth, and even exhibits something resembling a second life, is the revival of the hype in Gamestop shares. Additional media attention due to increased activity on the r/Wallstreetbets subreddit garnered caused the recently collapsed share price to skyrocket again, climbing up to $137 as opposed to $45 two weeks earlier. This revival was instigated by posts claiming that a bunch of ETFs that had significant GameStop exposure was being heavily shorted by large investors, which caused retail investors wanting to squeeze out the large hedge funds once again out of principle (so they claim, although the prospects of quadrupling your investment within a couple of weeks seems a far more likely fundamental reason).

The coming week will likely be another volatile one, with lots of reports related to inflation and economic performance being released in western economies. With crude oil prices still on the rise, and global treasury yields being unpredictable, no one can say for certain what is in store for us. The S&P 500 is currently still 12% higher than its previous peak, and one can only guess if the recent downward movement in global markets is a signal for what’s ahead, or if we are bound for new all-time highs (meaning that now would be the right time to invest due to the recent drop in valuations)?

As for our investment competition, although not as dire as last week, many portfolios still got clapped and ended up posting negative returns for the week. Merx remains the top performer for the second week in a row with a M2 16,36%, which is up an additional 1,62% from last week. Heeren XIIII also fought their way back into the top 10, and now take up the 5’th overall position after having climbed 8 spots compared to last week. Omega, CFQ & Floryn were less fortunate as each group dropped by 8 points within the ranking. The top 10 now look completely different as opposed to a couple of weeks ago, and with much volatility in the foreseeable future, it will be exciting to see what the next weeks have in store for us.

Within our second B&R investment competition, a stalemate has been reached as all groups are in the same exact position as last week. After some heavy losses have been incurred by New Rotterdam Investments and IValue Investments, Aurelia and Das Kapital are currently the only ones posting positive numbers on the board.


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