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Facebook, The Right METAmorphosis? | Flow Traders Investment Competition | Week 4


Investors faced a very volatile week, especially in the US, where this week 114 companies of the S&P 500 released earnings. At the end of the week of the 31 of January, the S&P 500 was up 1.55%, the Nasdaq 2.38% and the DOW up 1.05%. Value stocks continue to outperform growth despite a noticeable rebound in big tech. With the earnings report of Alphabet (+7.5%), Amazon (+9.5%) which both surpassed expectations, particularly for amazon who reported EPS of 27.75 instead of the estimation of 3.71! On the other side of the table, Facebook/Meta is struggling, on the news of the company’s annual report, the stock plunged 21.4%, wiping out 250 Billion dollars of valuation in a single day. Next to facebook, Paypal Stock is also diving, down 22.9% at the end of the week.

In Europe we saw smaller volatility changes with the STOXX european 600 down 0.73%, the Xetra DAX down 1.43% and the FTSE 100 index up 0.63%. The Bank of England raised rates for the second time in two months. The inflation in the country is forecasted to reach 7.25% annualized in April. Concerning the Euro Area, no increase has yet been agreed on, however, parts of the bond buying programmes of the ECB will start to be reduced as of March. Moreover, Christine Lagarde, the ECB president, suggested that rates might be increased during March, as a reminder, the inflation in the Eurozone topped in January to a record high of 5.1%. 

56% of the S&P 500 companies have released their earnings so far, many are expected to do so next week, so investors might be prepared for volatility. Coming next week are the earnings of Pfizer, Uber, Coinbase, Disney or Toyota among others, the numbers of US inflation for January will be released on thursday. In aggregate, 76% of the companies of the S&P have beat expectations, with an average outperformance of 8.2%. In Europe annual reports of Unilever or BP might be driving markets.


We saw a small return with most groups. Vae Victis especially had a great week with a return of 9.31%. There were also some groups that had a little more trouble this week.
De Ruyter Capital went down like a struggling sea-admiral in losing more than 1/5th of their portfolio’s worth in a week's time. They need to run a tight ship in the coming weeks if they want to stay afloat. Whether they will manage that is something we will have to sea. There are still 17 groups who have not made a trade, there are only a few weeks to start doing so. These groups should really start because it’s a boat time!


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