FINANCE ACCELERATOR

MACRO RESEARCH

www.amplifyme.com
ASSET MANAGER: BUY-SIDE OBJECTIVES
● Investment Strategy: US Equity & Crypto, Long Only, $20 million
capital.

● Client Profile: 40 yrs old founder/CEO of a successful tech company.

Moderately high risk appetite.

● Investment Time Horizon: 30 minutes simulation time will be

equivalent to investing through a fictitious 3-month time period.

● Investment Objective: To generate as high a return on investment

as possible whilst beating the underlying benchmark index. The
benchmark index is equally weighted across all 5 tradable products.

● Investment Constraints: The aim is to invest all of your client’s

$20million cash across the 5 tradable products. A diversified
portfolio spreads the risk. However, do not break your max stop loss
limit of -$500,000 in any one trade.

● Execution: Avoid large market impact on the exchange. Achieve

more competitive prices by trading through the investment banks.

INVESTMENT BANK: SELL-SIDE OBJECTIVES

● Client Relationships: Communicate regularly with your clients in

order to form and maintain strong relationships.

● Maximise Commission: Facilitate as many client trades as you can.

● Competitive Prices: Provide tight bid/offer spreads for clients when

they ask for quotes. Bad/wide spreads will mean clients will be
unlikely to trade with you.

● Manage Risk: When a client accepts a trade with you, the bank will
automatically be put into the opposite position. Trade out of these
positions of risk by using the exchange or finding another client.

● Manage Market Impact: When trading out of risk positions on the

exchange, break positions up into smaller execution sizes to avoid
PnL losses through market impact.
MACRO OVERVIEW

Global equity markets have seen their largest correction lower for more than a decade as an
unprecedented worldwide pandemic causes a humanitarian disaster that has triggered economic
chaos. Asian countries have already gone into lockdown to suppress the spread of coronavirus and
most recently Italy became the first European country to announce a lockdown in a move that has
seen financial markets now price in a similar trend for the rest of Europe and the US.

To counter the economic disruptions the US central bank, the Federal Reserve, surprised markets
last week by cutting interest rates by 0.5%, which was a larger than expected stimulative move.
Traders are now speculating that there will be further stimulative measures to come from other
central banks as well as emergency fiscal stimulus from Governments worldwide.

As we head into the start of the simulation, market sentiment shows some very early signs of
recovery, but investor confidence is very fragile and if no further stimulus is forthcoming or if the
pandemic escalates further then markets could turn sharply lower again.

Apple (AAPL)
In the last 4 weeks Apple’s share price has
crashed by 25% from a record high of $81.
Global lockdowns have put at risk Apple’s
entire supply chain and investors fear that
iPhone sales could be significantly
impacted.

However, some analysts are expecting

Apple’s services revenue streams to
potentially offset this with App Store sales
and Apple TV+ expected to perform strongly
in the coming quarters.

Meta (FB)

In a broad based market sell off, Meta has

performed relatively worse than its rival tech
giants. The share price has dropped 29% in
recent weeks to make a new 12 month low.

Investors are concerned about the impact of

the global pandemic on corporate advertising
budgets. 98% of Meta’s revenue is generated
from advertising and if we see a prolonged
recession then this could have a prolonged
impact revenues and profits for the social
media giant going forward.
Tesla (TSLA)
Tesla shares tripled in value at the end of last
year with three factors driving the sharp
upside: 1) The accelerated global shift towards
Electric Vehicles as the climate change agenda
gathers momentum. 2) Strong production
growth saw a record volume of 500k+ vehicles
produced last year and 3) Tesla delivered its 6th
profitable quarter in a row.

However, Tesla’s share price has pulled back a

massive 33% due to the pandemic, proving
again the heightened volatility of this stock.
But, some investors who missed out on last
year’s rally are seeing this a good buying
opportunity, albeit a high risk trade.

Bitcoin (BTC)
The world’s most widely held cryptocurrency
has dropped over 50% in recent weeks,
moving from above the $10k handle down to
test the important technical support at $5k.
The sharp decline has investors questioning
Bitcoin’s potential as a safe haven asset.

The primary reason for the sharp downside is

a panicked global investment community
moving their portfolios into cash whilst they
assess the broader economic implications of
the pandemic.

Ethereum (ETH)

Ethereum has followed Bitcoin with a similarly

sharp move to the downside demonstrating
how volatile the cryptocurrency asset class is.
Generally speaking crypto is down double the
amount compared to large cap US stocks.

However, Ethereum showed slightly more

resilience than Bitcoin as the sell off meant a
new six month low compared to Bitcoin’s 11
month low and we have already seen a small
recovery back above the important $3000
handle.