After last week’s strong performance of equities due to earnings season being in full effect, this week was rather ambiguous and saw little overall progress throughout the past 5 days. Although indices such as the Nasdaq and S&P 500 hit new all-time highs during the week, most of these gains were squandered during a dip on Friday (S&P total weekly gain was 0.02% whilst Nasdaq posted a -0.39% decrease), flattening out the total progress made. European markets also left much to be desired, as the FTSE gained a meager 0.45%, and our own AEX dropped by -1.15%.
It seems that the dismissal of some of the Dutch coronavirus restrictions did little to ease investors. No more evening curfew and the re-opening of terraces would surely provide the economy with a much-needed push in the back. However, the next big threat already seems to be lurking in the distance. Rapid spread within India of a new coronavirus mutation is a troubling development that could put another dent in worldwide recovery efforts. Turkey has also announced a full 2-week lockdown in response to these recent developments, indicating that governments should still be wary of facing another tidal wave of new possible infections. Although this might seem problematic, there is also much hope, as vaccination efforts are picking up steam, which in turn suppress the potential spread of the virus. The FED’s Jerome Powell has also indicated that there will be no brake on the financial stimulus packages anytime soon, and with Europe usually following suit, economic damage within the western world is likely to be averted for the foreseeable future.
The fear of underperforming has certainly never crossed the minds of the C-suit of all FAANG corporations, as their earnings this week once again showcased why they remain atop of the corporate food chain. Combined these companies (on average) outperformed expectations by 41%(!), which is staggering once you consider that Apple alone beat sales targets by $12 billion. However, the reaction on the markets was lackluster, with these stocks even trailing the general market in 2021. With the unprecedented bull run these firms have had over the past years, and their estimations for the coming quarters only improving, is it still in time to hop on the bandwagon?
In turn, these earnings also certainly have had an effect on our own Flow Traders investment competition. Conquistadores Capital is still behind the steering wheel as they continue to top the chart with their M2 of 24,23%, although they should be wary of Merx breathing down their necks. CMG Investment managed to post some impressive nummers by pulling in a weekly return of 8,54% , as well as Hercules who managed to climb up by 12 positions. K2 Capital was less fortunate as they dropped by 7 positions on the leaderboard.
Our second investment competition remained flat for the most part, with no changes on the leaderboard compared to last week. Das Kapital remains on top with their M2 of 10,96%, whilst Aurelia managed to pull in the highest return of the week with 1,17%.