When It Rains It Pours

Detailed analysis below...

It was a tough back half of the week for US stocks, as the combination of recession fears and mixed Big Tech earnings left investors fleeing to safety.  On the week, we saw sharp moves lower for the S&P 500 -2%, NDX -3%, and RTY -6.7%. 

The moves were classic ‘risk off’ / ‘flight to safety’ oriented.  On Thursday and Friday, we saw economically sensitive Cyclicals underperform Defensives by 734bps, the worst 2-day move ever recorded (dating back to 2007).  The only other comparable days were during actual recessions (March 2020 Covid Crash and 2008 GFC). And yet, Thursday-Friday were worse than any 2-day drop that took place during those recessions.