8 September 2017: A strong euro

Europe is feeling the effects of the growing doubts investors have on US President Donald Trump’s ability to turn his big words into action. The value of the euro keeps climbing in comparison to the US dollar. The barrier of $1.20 for one euro has been crossed and it is very likely that a next hurdle of $1.25 will be taken before the end of the year. And this means trouble for Mario Draghi, the boss of the European Central Bank. A rising euro makes it harder for him to realize his long-cherished wish of reaching a level of inflation of approximately 2 percent. Yesterday, Draghi announced that he left interest rates unaltered and that there will be no change to the ECB’s quantitative-easing program in the upcoming months. This is probably the last time that Draghi can sit on his hands. His QE program ends this December and that would be a good occasion to take some measures: the economies of the eurozone have reached a strength that enables them to absorb higher interest rates and/or a tightening of the money market.

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US stock indexes closed slightly up or slightly down yesterday. Investors are cautious because of the devastating effects of hurricane Irma and potentially devastating effects on their portfolios of yet another North Korean missile test. The S&P 500 closed down 0.02%, while the Dow shed 0.10%. The tech-heavy NASDAQ was able to squeeze out a small gain: +0.07%.
Volatility moved up and down and up and down. The VIX closed with a small loss: -0.69%. UVXY ETFs matched this loss: -0.69%. XIV ETFs recorded a small gain: +0.42%.
Danny Daredevil recorded a small loss. His RSS dropped to 79%. Adventurous Anny is still holding cash. Her RSS remained at 4%. Solid Suzy and Lazy Larry saw their return since the start creep up to 23%.
None of our models gave a trading signal at the end of yesterday’s session.

Model  Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

79.41%

-55.49%

-58.78%

41%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

8%

Solid Suzy XIV 6 March 2017

22.66%

22.66%

-2.00%

49%

Lazy Larry
XIV 6 March 2017

22.66%

22.66%

-2.00%

49%

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

 

RS_v05-smallRené’s Reflections @ Friday: Maintenance mode

Every now and then, it is good to make the balance of whatever it is you do to fill your (free) time with. Ask yourself some questions — not just at New Year’s Eve. How much of what you do is the same every day? How much of that do you really need to do? How much of what you (think you need to) do is driven by satisfying the demands and expectations of anyone but yourself? What would you fill your time with, if it were all totally and exclusively up to you? Right. If you find out there is an imbalance here, it might be time for you to make sure that today’s burdens don’t become tomorrow’s obstacles. I’m now switching into maintenance mode during the upcoming quiet, introspective weekend. Hope to see you next week with some fresh insights!