From the Team @ HPLT 3/10

Markets Update

Yikes!  Last week felt like 2 months…  Risk-off sentiment is a real thing at the moment, with major focus on both softening of the macro/economic picture, along with volatile (daily) tariff-related headlines. The debate by the middle of last week was: Is this a technical unwind where we ultimately find support and see a meaningful bounce in the near-term, or is this part of a larger and longer-term growth scare that would suggest stocks are going lower from here for some time.  Those in the first camp, probably would have guessed we were in the 7th or 8th inning by the middle of last week, with folks who leaned more towards growth scare suggesting we could be in the 1st or 2nd inning of a sell-off.  That’s a meaningful gap.  That debate is still wide-open, and stocks drifted lower in the most volatile market environment we’ve seen in the last couple years.  The S&P 500 traded in a > than 2% range each session last week… not normal.

Major US indices closed down 3% on the week, but the bulk of the pain has been seen in the high-momentum / high-flying / momentum-driven stocks that have been market winners over the last 6-12 months.  That factor (or category) of stocks was down, wait for it… 14% just last week, and -24% from where this sell-off began on Feb 19th. Translation: The speed of this unwind was/is unprecedented. 

Geopolitics is hot & heavy right now, add that to the list of ‘why are stocks going down every day recently?’  The U.S. decided to halt all aid to Ukraine, with tensions remaining high following the Trump-Zelensky showdown 10 days ago.  The next round of US-Ukraine talks is scheduled for this week.  Trump has been threatening harsher sanctions on both Russia and Iran recently.  That said, Crude oil traded down 4% on the week after OPEC announced production will increase starting in April.

A number of charts to further break down the week that was: 

Investor sentiment via the Fear and Greed Index

Stocks currently sit below their 125-day moving avg

Performance by sector last week

High-momentum stocks, 6-month chart to illustrate the SPEED of the sell-off

2 years of momentum returns basically gone in 14 trading days

Good 1 to visualize the last 5 sessions of > 2% trading ranges (S&P) … relative to last couple years

Odds of a rate cut from the Fed in May has moved to ~ 40%

Trump’s Bitcoin reserve announcement / press conference last week appears to disappoint (so far) … BTC over the last week below

Go get 'em this week…

Work Hard / Be Kind / Have Fun


brian mazzaComment