After a few optimistic weeks in the stock market, it seems like the recent tech rally is slowly losing its momentum. The tech-heavy Nasdaq100, which has led the recent gains, closed on a small 0.15% loss on Friday. Similarly, the S&P500 and Dow Jones haven’t moved much on a weekly basis, finishing the week only 0.37% and 0.13% higher, respectively. The downside moves were slightly deeper in Europe, with AEX, Stoxx600 and FTSE100 closing the week 1.05%, 0.39% and 0.59% lower.
Even though the markets as a whole disappointed, the technology sector was again overperforming the broad market. On the relative performance basis, it ended the week surging to its highest level since August 2000.
The soft-landing narrative of Europe avoiding recession, which was one of the primary causes of the recent positive sentiment in the markets, has started to crumble. With the 1Q23 GDP estimates printing -0.1% and 4Q22 GDP being revised to the same value, Europe has officially entered a technical recession. Noticeably, the industrial production printed really low, indicating an increase of only 0.7% on a YoY basis.
The second leg of the same narrative also started to fade, as Chinese imports and exports both declined, by 4.5% and 7.5% respectively on a YoY basis. Whereas some of the Chinese data printed slightly above expectations, the economy signals a struggle with picking up, which is best reflected by the producer prices declining by 4.6%.
Finally, the details about Donald Trump’s indictment were released, sparking a controversy among the U.S. policymakers, most notably Speaker McCarthy. Voices were raised that Trump’s prosecution may set up a dangerous precedent in the U.S. election process.
Flow Traders Investment Competition Update
This week the top two of the competition remained the same, which means that Mercury is still leading the competition with a M2 of 23.46% followed by Negotium Novum with a M2 of 20.42%. The rise of Heeren XIII was short as they dropped out of the top three this week already. Also, the CMG got rid of their last position quite fast, as they rose 7 places to the 39th place. The biggest increase belonged to Urban Investments who are now in 12th place. Finally, because CMG lost their last place another group had to be the unlucky ones to take this spot now. This week this is Audacity.
