HALFTIME ADJUSTMENTS

Here are Wall Street’s best trades from the first half of 2015

It’s a crazy world out there, we know. Asset prices are always zig-zagging back and forth, volatility spikes and subsides, liquidity is abundant and then suddenly nowhere to be found.

But here at Quartz, we’ve got your back. Now that year is halfway over, here’s a list of a few of the best-performing assets to help you make sense of what just happened.

These were the five best trades of the last six months, in our view.

1. Chinese stocks

Investors look at an electronic board showing stock information at a brokerage house in Fuyang, Anhui province, China, June 26, 2015. China stocks on Friday posted some of their worst losses in seven years, as investors stampeded out of a market amid increasing signs the country's eight-month-long bull run is running out of fuel. REUTERS/China Daily CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA
An endless source of fascination. (Reuters/China Daily)

China’s economy is famously slowing down. But as the People’s Bank of China has cut interest rates four times since November to kickstart faster growth, its stock markets have really taken off. The Shanghai Composite index is up more than 30% through the first half and the Shenzhen A Share index has risen nearly 75%. Those stellar numbers come despite signs that the rally is losing momentum. A recent slide shrank the Shanghai Composite index’s market value by roughly the equivalent of the entire of the Spanish stock market.

The source of the stock surge: leverage from investors, leverage from the brokerages themselves, and Chinese government’s recent habit of cheering on the rally.(paywall). No one knows if Chinese stocks will continue their recent tumble. But if investors got in early enough—and have gotten out safely—they’re probably too busy celebrating to care.

2. Gasoline

A customer fuels his car at a Mobil gas station off Route 3 south, heading toward Cape Cod at the start of Mother's Day weekend, Friday, May 8, 2015, in Pembroke, Mass. With more money in their pockets thanks to lower gas prices and an improved job market, AAA expects more than 37 million Americans to travel for Memorial Day, the most since 2005. (AP Photo/Stephan Savoia)
What’s bad for travelers is good for commodity traders. (AP Photo/Stephan Savoia)

This time last year gas prices began their initial descent into five-year lows, as it became clear that OPEC decided that it had had enough of bubbling shale production in the US. Saudi Arabia boosted oil production, helping to crater crude prices. And with lower oil prices, came lower gas prices.

The oil price decline has petered out. Benchmark Brent crude prices are only up 13% since the start of the year. But US gasoline futures have surged nearly 40%, thanks in part to a series of refinery outages (paywall) that have kept supplies tight in several key states, such as California. And though gasoline is far less expensive than it was a year ago, the price of the pump is rising fast.

That’s bad if you were hoping cheap gas would fuel consumer spending, but great if you’ve been pumping up your portfolio gains.

3. Buying Swiss francs with euros

A picture illustration of Swiss Franc and Euro banknotes taken in central Bosnian town of Zenica, January 26, 2015. The amount of cash commercial banks hold with the Swiss National Bank rose the most since at least March 2013 last week, suggesting the central bank intervened to keep the franc down despite scrapping a cap against the euro. Switzerland's central bank shocked financial markets 11 days ago by abandoning the three-year-old cap on the franc, a policy it later said would have cost 100 billion Swiss francs ($112.99 billion) to defend this month alone had it been maintained. The move sent the Swiss currency soaring against the euro and stocks plunging, a reaction the SNB said was overdone. In the week following the removal of the cap, sight deposits surged to 365.486 billion Swiss francs last week, up from 339.614 billion francs in the prior week, SNB data showed on Monday. REUTERS/Dado Ruvic (BOSNIA AND HERZEGOVINA - Tags: BUSINESS)
A prosperous pairing. (Reuters/Dado Ruvic)

One of the biggest shocks in monetary policy didn’t come from the Federal Reserve, the European Central Bank, or the Bank of Japan (despite its best attempt). No, that honor goes to the Swiss National Bank.

Back in January, the SNB decided to scrap the Swiss franc’s peg to the euro, and the franc immediately shot 20% higher against its former partner. The move caught most investors by surprise, with firms like JP Morgan reaping huge windfalls and others like Citi licking their wounds.

At the same time, the ECB finally started its bond-buying program, surprising nobody and weakening the euro. Combined, the two events mean that anyone who had the foresight to buy francs with euros at the beginning of the year can probably use them on a very nice ski trip for themselves.

4. Gilt-y pleasures

Bank of England Governor Mark Carney drinks a toast during the Bankers and Merchants Dinner at the Masion House in London, Britain June 10, 2015. REUTERS/Neil Hall
Bank of England governor Mark Carney raises a toast. (Reuters/Neil Hall)

Speaking of central banks, the Bank of England has been hanging in the Fed’s shadow for months now. It, too, cut interest rates to nearly zero and bought a bunch of bonds to keep them that way. Its economy is also jostling towards normalcy. Thus, it’s been (somewhat unsuccessfully) laying out the groundwork for its own interest rake hike for months now, a development that would surely hurt UK government debt. (When interest rates rise, bond prices fall.)

Nevertheless, the ECB’s tardy take-up of quantitative easing has thrown a wrench into those plans, especially because inflation remains so low. And because bond yields were so low on the mainland, investors came rushing over to buy British debt. And though the British 10-year has undergone its fair share of climbs and clobberings (paywall), the Barclays index tracking the so-called 10-year Gilt is up 8% in sterling terms since the end of 2014.

5. Watching Netflix soar

Netflix internet North America
Netflix CEO Reed Hastings presides over a rapidly expanding kingdom. (Reuters/Mike Cassese)

Netflix has been a juggernaut in the S&P 500 this year, and its market value has surpassed other corporate heavyweights like Yahoo and CBS, which illustrates how much of a force it has been in transforming entertainment industry. The stock itself is up nearly 92% in the first half alone. The next highest stock in the US benchmark index is insurance company Cigna with a 57% advance.

One of the big stories around its tremendous growth; the company has been racking up new subscribers in the US and abroad, and about a third of the company’s subscriber base is international. But it’s popular with investors, too. So popular that it decided to split its stock 7-for-1 in order to make its shares more accessible. Hedge fund investor Carl Icahn was pleased, deciding his work at the company was done and cashing out what was left of his stake.

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