The new week will kick off with a three-day European Central Bank (ECB) meeting in Portugal on investment and growth in advanced economies. Investors will be on the lookout for any indication from Mario Draghi of when central banks would begin normalizing monetary policy. On Tuesday, Fed Chairwoman Janet Yellen will speak on ‘global economic issues’ at the British Academy’s 2017 President’s Lecture in London. Here, investors will be listening for clues as to when the next interest rate hike is likely to take place, and when the US central bank will start unwinding its massive $4.5 trillion balance sheet.
Will the necessary actions be taken soon enough? Don’t count too much on it. Chances are, that change will come by itself eventually, instead of by some form of proactive policy. And if it does, it will do so unexpectedly, unforeseen, and without anybody being prepared for it. Actions speak louder than words, but words are easy, and actions are not.
The trading week that ended Friday, was dominated by the uncertainty and negative sentiment surrounding oil prices entering a bear market. As a result, stocks slid three days in a row, ending the week lower, with the exception of the NASDAQ. The latter closed the day up 28.56 points or +0.46% to 6,265.25, which was 1.1% higher than its opening on Monday. The S&P500 gained 0.16% for the day (-0.17% for the week) and the Dow closed the day virtually flat at -0.01% (-0.2% for the week). Volatility eased significantly for the second day in a row: the VIX closed 4.39% lower. UVXY ETFs lost another 2.08% and XIV ETNs gained 1.06%.
Danny Daredevil bought UVXY ETFs at the beginning of the session and saw his RSS drop to 336% at the close of trading. The RSS of Adventurous Anny, who sold her XIV ETNs and kept a cash position Friday, stayed just above 40%. Solid Suzy and Lazy Larry had another good day. As their XIV ETNs climbed, they saw their RSS rise to almost 28%.
None of our models gave a trading signal at the end of Friday’s session.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
Last Saturday, These Dutch Guys spent the day together. Up until a couple of months ago, they used to spend most of their time together on the topic of White Chapel. But since their model(s) and the website have evolved into a well-oiled machine and everything seems settled for now, they could spend most of the daytime hours walking in the drizzle in the woods, enjoying lengthy chats about a wide variety of subjects at the forest retreat, and, once back home, watching and discussing fragments of classic cinema for hours on end.
‘Bloed kruipt waar het niet gaan kan’ (blood is thicker than water), so after a self-prepared Penne rigate al salmone, they sat together at René’s iMac and continued working on their core business: White Chapel. The fruits of last Saturday’s get-together will be presented any time soon.