Liontree Weekly Update
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Liontree Weekly Update
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202620252024

What a week! The massive surprise rally on the back of the mid-term election results on Wednesday was met with a massive surprise tech meltdown on Thursday. Few were spared. Even though the market tried to make a comeback on Friday, Nasdaq still closed the week down -3.4% while the S&P 500 fell -2.7% and the Dow relatively outperformed at -0.9%.

The tech sector continued its downward spiral this week as tech earnings failed to deliver. Nasdaq fell -2% (closing the month of October down -5%). However, market breadth was actually better with the equal-weight RSP outperforming the cap-weighted S&P by nearly 140 bp. Fundamentally, it was a very busy earnings week.

The tech sector failed an early attempt to bounce back from last week’s carnage with the SOX down -3.2% and Nasdaq dropping a further -0.7% (on top of last week’s -4.5%) as investors rotated into more defensive sectors (see Theme #2 for more thoughts). The equal weighted S&P outperformed the official index by ~160bp and the Dow Jones did manage to end the week up. AI spend/credit fears were front and center again as was the escalating conflict in Iran which pushed WTI crude back above $100.