Liontree Weekly Update
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Liontree Weekly Update
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The major market indices were fairly flat with the S&P 500 closing slightly down and Nasdaq closing slightly up, but under the hood, the equal weight S&P fell -0.7% and was down for the 7th straight week. A striking stat (per FactSet) that I saw was that fewer than 25% of index constituents are above their 50-day moving average. Yields remain a big focus with the 10 and 30-year yields hitting their highest levels since 2002, though each ended the week off those record levels as Fed rate cut expectations eased (and helped the Friday stock market rally, along with lower oil prices).

It was a busy week with a lot of interesting updates across AI (of course), media entertainment, wearables, and cable (to name a few) but I’d say Meta’s Muse was of particular note given the breadth of its stock and market impact this week. While Meta shares themselves were up a stunning ~+13%, it also helped drive the SOX up +6.3%, while pressuring a slew of “consumer inertia” stocks (see Theme #2). All in all, Nasdaq hit a new record high earlier this week and the S&P 500 is only 1% from its August record high. However, small caps continue to be under pressure as interest rate yields maintained their ascent.

It was a volatile week on multiple fronts. The Fed hiked rates +25bps on Wednesday to 3.75-4% which was largely as expected, but the tone was a bit more hawkish than anticipated. That coupled with an AI-fear driven selloff sent the Philadelphia Semiconductor Index down ~5.8% on Monday which was its worst session since July. The major indices came back but still closed the week mixed (Dow fell -1.7%, S&P 500 -0.08%, Russell 2000 -1.5%, while Nasdaq rallied +0.72%). Oil above $95/barrel and the hotter-than-expected August CPI print from last week continued to weigh on rate-sensitive names as well.