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6 Straight Down Days
A Beating for the S&P 500
The S&P 500 closed red for a 6th consecutive day on Friday, its longest losing streak since October 2022.
Big-tech led the way to the downside, with NVDA down over -14%. It was the worst week for the S&P 500 since March 2023.
Tensions in the Middle East on the Rise
The price of oil has been rising again with a war slowly developing between Israel and Iran. Keep in mind, oil is the main transmission mechanism which a war in the Middle-East would impact the US economy. While this is definitely a risk, most financial media outlets are blaming the sell-off solely on this risk. However, oil actually saw a -3% drawdown this week.
Clearly this sell-off is about more than just geopolitical tensions…
Investors are Dumping Bonds
Fund manager allocations to bonds just saw the biggest MoM drop since July 2003. Rising interest rates are being driven not just by oil but rising global growth expectations and sticky inflation. Higher rates and higher volatility means tighter financial conditions and LESS LIQUIDITY.