COMMENTARY:
- The S&P500 fell this week. Sensitivity to AI related news pushed the markets down early in the week, followed by a slight mid-week recovery. Then, tariff talk, the aviation disaster, at the end of the week, collectively resulted in a drawdown of 1%.
- Energy was the worst-performing sector this week, falling 4.0%. Continued speculation of potential impacts of 25% tariffs with Canada and Mexico, weighed on the energy markets and was a contributing factor. Individual underperformers for the week included Kinder Morgan (-9.2%) and ONEOK (-7.0%). Exxon Mobile, the largest holding fell 1.7%.
- The week’s big news impacting the Technology sector was China’s new DeepSeek AI platform. The claims are the platform is faster and cheaper than its competitors. This sent chipmakers into a sell-off. Eight of the constituents in the index had double-digit declines this week. Nvidia (-15.8%), Super Micro Computers (-14.3%), and Hewlett Packard (-13.0%) were the three whose returns were down the most.
- Communication Services led the way on the positive side. The sector was up by almost 2%. Meta Platforms was a significant contributor gaining 6.4%, with T-Mobile (+6.6%), and Electronic Arts (+5.5%) also having a positive impact.
- All but one of the sectors clings to positive returns for the month (YTD). Health Care leads the way so far this year up 6.8%, while the only sector in the red is Technology, which is down 74 basis points.
ETF TIDBITS:
- This week, investors allocating the Technology sector, contributed $1.39 billion into the Vanguard Information Technology ETF (VGT), at the same time redeeming $1.46 billion from the Invesco QQQ Trust (QQQ), which may show investors are looking at expense ratios differentials.
- Grayscale currently offers exposure to the third largest Cryptocurrency (XRP) in a Trust format. The firm has recently asked the SEC for approval for the first-ever XRP ETF wrapper.
