NYSE MAC Desk - November 4 Weekly Recap

Coming into this week the S&P 500 had rallied >4% in back-to-back weeks. We started the week with a modest pullback, but major indices closed out October with very solid gains. The S&P 500 ended the month up ~8% while the Dow Jones Industrial Average, which had closed higher for five consecutive weeks, closed out its best month since January 1976 up >14%. On Tuesday, it looked like we were going to start the month of November off on a good foot with major indices gapping up >1% following speculation that China was working on plans to ease Covid restrictions. That early strength faded as growth/mega-cap tech stocks sold off, which was a continuation of the theme we had highlighted last week.

The Tuesday losses were modest, but the downside accelerated following Wednesday's FOMC policy decision with the S&P 500 ending the session off 2.5%. There was some downside follow through yesterday as rates and the US dollar index moved higher again. This morning major indices gapped higher following some more China "re-opening" optimism and a mixed jobs report, but major indices stalled out at key technical levels with the same group of stocks leading to the downside. After trading modestly lower we did get a late day rally as the US dollar index moved lower throughout the session and following some quasi-dovish headlines from Fed Evans this afternoon. For the week the S&P 500 was down 3.3% while the Dow losses were about half of that down 1.7%. The NYSE FANG+ index ended the week at a new YTD low down 5.6%, despite the China components (BABA/BIDU) which make up ~18% of the index ending the week higher by >6%. The growth factor underperformance was evident across all market caps, but it was most stark for the mega cap names, underperforming by ~6% this week (MGK -6.8% vs. MGV -0.7%) bringing the YTD underperformance to ~29%. Below I've updated the S&P 500 Growth vs. Value Chart from last week.

Read the rest of the Weekly Recap here