Volatility Brings Changes To Market Leadership

2025-03-28 06:05:00 ET

Summary

• Since the February peak, equity markets experienced a savage reversal in leadership, momentum and investor confidence.
• Uncertainty around U.S. government policy – particularly tariffs – is resulting in elevated levels of market volatility, with some names down as much as -50%.
• Couple this volatility with a change in momentum and many crowded names, particularly within tech and AI, have seen a dramatic shift in fortune as last year’s momentum trade unwinds.

At a high level, it did not seem that bad. As of the second week of March, global equities were down roughly 6%, on par with the sell-off in late December and early January. That said, many of the trades that drove the market higher in 2023 and 2024 are now compromised....

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