Volatility Is Back
Weekly Investment Update | By Brian Schreiner
A sell-off in the tech sector sent the Nasdaq 2.5% lower last week, but stocks were mixed as the Dow Jones Industrial Average hit 50,000 for the first time ever and finished the week up 2.5%. The S&P 500 was nearly unchanged. (Fox Business)
Gold and bonds were up and commodities were down. After trading above $100,000 for most of last year Bitcoin has been trending lower. The crypto currency extended its losses to around $63,000 last week before but surged to over $71,000 on Friday. (The Street)
VIX SPIKES AS TECH & CRYPTO SELL-OFF - Market volatility returned to the spotlight last week. On Thursday, the CBOE Volatility Index—a key gauge of anticipated market swings known as the “VIX”—reached 23.1, its highest level since late November, suggesting investors may be shifting to a risk-off mood. (Seeking Alpha)
SOFTWARE STOCKS DOWN 20% THIS YEAR - The recent sell-off in software stocks has been fueled by the rapid emergence of new AI tools that automate tasks in areas such as legal, marketing, and finance. Investors are concerned that software is being disrupted by AI tools and the trend may result in pricing pressure and may even render some software applications obsolete. (CNBC)
$100 BILLION NVIDIA / OPEN AI DEAL COLLAPSES - The circular deal through which the chipmaker would supply the ChatGPT developer with huge sums of money that would largely go towards the purchase of its own chips. Jensen Huang has soured on the deal and OpenAI officials say they’re “unsatisfied” Nvidia’s advanced chips and is seeking alternatives. Nvidia’s stock is down over 10% from that October peak. (The Guardian)
OLD ECONOMY STOCKS SHINE AS TECH STUMBLES - After years of tech-led dominance, the market is experiencing a meaningful rotation toward traditional “old economy” sectors. Investors appear to be gravitating toward real‑asset businesses and industries that had previously fallen out of favor—oil & gas, chemicals, transportation, consumer staples, and regional banks—all of which have been outperforming since high‑flying tech stocks began losing momentum late last year. (Edward Jones)
PRIVATE CREDIT CONCERNS RESURFACE - Shares of the leading private credit firms such as Blackstone (BX), Apollo (APO), Blue Owl (OWL), Aries (ARES) and KKR (KKR) sold-off last week over investor concerns about outsized exposure to software businesses. Former Apollo co-founder Josh Harris said, “Poeple don’t understand that some of these structures may not be liquid when things go wrong—and that’s exactly when they need the money.” (Bloomberg)
GOLD DEMAND HIT ALL-TIME HIGH LAST YEAR - Total gold demand in 2025 exceeded 5,000 tons (11 million pounds) for the first time in history. Central banks purchased 863 tons as the safe haven asset set 53 new all-time highs. (World Gold Council)
CPI & JOBS REPORTS THIS WEEK - This will be a busy week of economic reports including two important data points: employment and inflation. The Bureau of Labor Statistics will release a new jobs report on Wednesday and a new Consumer Price Index report on Friday. (MSN)
THE ALPHA ROCK DIFFERENCE - Our investment strategies are a compelling alternative to traditional buy-and-hold investing. By focusing on liquid alternative investments and active risk-management, we target absolute returns, not benchmarks. To see how we’re invested and why, download our most recent Quarterly Investment Outlook, Bubble Watch & the Elusive Pin.
REVIEW YOUR INVESTMENTS - When market volatility increases, it’s a good time to review your investments, especially if you’re using a passive, buy-and-hold strategy. (Schedule a Call or Meeting)
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