(910) 319-7834
Major Index Performance (as of Thursday’s Close):
- S&P 500: Down (-3.67%)
- Dow Jones Industrial Average: Down (-2.87%)
- Nasdaq Composite: Down (-4.12%)
- Gold: Up 2.46%
Nasdaq Enters Correction
The Nasdaq Composite has continued its recent decline this week, now down 10.4% from its high of 20,173.89. A market correction is defined as a 10% decline from a recent high, while a 20% decline would confirm a bear market.
Thursday’s sharp selloff in the tech-heavy Nasdaq was driven by concerns over global trade tensions and renewed uncertainty surrounding the artificial intelligence sector. Marvell Technology Inc., despite surpassing earnings expectations, saw its stock drop nearly 20% on revenue guidance. Suffice it to say, this kind of news can, and usually does, temper investor enthusiasm. The continuation of AI-driven growth may not be over, but the severely overvalued sector obviously needed a rest.
Other key players in the AI sector were also under pressure. Broadcom Inc. declined more than 6% ahead of its earnings release, while Nvidia Corp. dropped 5.7% on Thursday, extending its weekly losses beyond 10%—erasing six months’ worth of gains.
After a brief midweek rebound, broader market losses resumed as trade concerns resurfaced. However, losses were partially trimmed following an announcement that the 25% tariffs on imports from Mexico and Canada, originally imposed Tuesday, will be paused until April for goods complying with the U.S.-Mexico-Canada Agreement (USMCA).
Key Economic Data This Week:
- Initial Jobless Claims: 221K (vs. 233K estimate)
- Change in Nonfarm Payroll: 151K (vs. 160K estimate)
- Change in Private Payroll: 140K (vs. 145K estimate)
- Unemployment Rate: 4.1% (vs. 4.0% estimate)
Why Active Management Matters:
Market conditions continue to shift as economic indicators show signs of slower growth. Headlines and emotions often cause knee-jerk reactions, thereby exacerbating the vicissitudes across major indexes.
You might be wondering what is best for dealing with these conditions. Passive investors tend to ride out market fluctuations, compared to actively managed portfolios that have the flexibility to assess risks, adjust positioning, and potentially capitalize on opportunities as conditions evolve. Instead of reacting impulsively, a strategic and disciplined approach allows for proactive decision-making based on economic data, corporate fundamentals, and broader market trends.
When it comes to navigating uncertainty in the context of investing, it requires more than just waiting for the market to recover, depending on an investor’s circumstances. It demands a focus on risk management, adaptability, and long-term strategy—all of which are hallmarks of an actively managed portfolio.
Have a great weekend,
Your Portfolio Management Team
