The past week has not been good for the markets. Tech and finance stocks experienced a major fall. In the US, the S&P is down by -4.77%, Nasdaq100 by -4.17% and DJIA by -4.53%. In Europe the markets were also down. AEX fell by -2.64% and Stoxx600 by -2.44%. FTSE 100 also was down by -2.5%
Investors in the past week wiped $52.4B off the market value of four major investment banks in the US after a smaller “Silicon Valley Bank” lost $1.8B on 80% of its securities that were marked available for sale. This has sparked concerns about the potential effects of the high interest rate environment on the net income of banks and caused this huge sell-off.
The troubles of the Federal Reserve continue to persist. Chair Powell spoke this week to the Senate banking committee: “the ultimate level of interest rates is likely to be higher than previously anticipated” he also added that the economic data was also “stronger than expected”. We are yet to find out about how aggressive the FED will take action in the coming months. Powell has to decide between ripping the band aid slowly or quickly. Although the quick option always carries a high risk of recession.
After the disastrous earthquake in February, Turkey settled its first bond deal raising $2.25B in debt. The World Bank estimates that the earthquake has caused $34B in damage. Economists are expecting Turkey to finance the reconstruction through debt markets and bilateral deals. Investors are also keeping a close eye on the upcoming elections on the 14th of May which will be extremely significant for the country's economy and future.
Flow Traders Investment Competition Update
Last week the temperatures dropped drastically, and so did Fides Investments and Floryn Traders, both dropping 9 places in the competition. Hopefully, spring will bring better results for them. On a sunnier note, Next Generation had the biggest increase last week, rising 9 places to the 8th position. Then we have Nova Capital, losing 24,5% of their returns compared to last week, making them almost as volatile as the Dutch weather. Finally, B.R.O.O.D. Beleggers is still leading the competition with a M2 of 9.23%. However, Mercury is catching up quickly with a M2 of 9.13%. Will they take over the lead next week?
