24 April 2017: Macron

The outcome of the first round of the French presidential elections yesterday can be called revolutionary. It meant a huge defeat for the two center-right and center-left groupings that have dominated French politics for 60 years. Investors were relieved with the inclusion of Emmanuel Macron in the couple of candidates who will go up for the finale on 7 May. It is very likely that Macron will defeat Marine Le Pen, the far-right candidate of Front National. Although the victory of Macron will be built on many anti-establishment votes, the effect on stock markets will be contrary to what happened during Britain’s vote last June to quit the European Union and the election of Donald Trump as U.S. president. Macron wants to reform France socially and economically and is a proponent of European cooperation. Vive la France, vive l’Europe!

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U.S. stocks slumped last Friday as financial and health care companies moved lower. Many stocks continued the up-and-down pattern they have been stuck in for the last month. The S&P 500 closed 0.3% lower, while the Dow (-0.2%) and the NASDAQ (-0.1%) recorded somewhat smaller losses. The VIX rose more than 3%. UVXY ETFs also climbed: 0.85%. XIV ETNs faced a small loss: -0.30%.
Danny Daredevil was the only one who profited: his RSS rose to 451%. Adventurous Anny was unchanged as she is still hanging on to cash. Solid Suzy and Lazy Larry saw their attempt to reach positive territory frustrated and their RSS dropped to -0.63%.
None of our models gave a trading signal at the end of Friday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

450.53%

36.57%

17.44%

269%

Adventurous Anny Cash 6 March 2017

21.78%

21.78%

0.00%

362%

Solid Suzy XIV 6 March 2017

-0.63%

-0.63%

-9.27%

-5%

Lazy Larry
XIV 6 March 2017

-0.63%

-0.63%

-9.27%

-5%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

A rain cloud over Mastbosch, Breda