Last Week in Review

Last week was brutal. The market traded down in front of the three day Memorial Day weekend. It is not unusual for the market to decline in front of a long holiday weekend. Many investment banks and market makers do not want to sit on a large inventory of stocks over a long weekend. What is unusual is the magnitude of that fall. The S&P 500 fell 3.5% over last week and has fallen 5.5% year-to-date. The pain was evenly spread between growth and value but Large Cap domestic stocks have fallen more than Small caps for the week and the year. No one is more surprised by these results then me. I truly thought that Small Caps would take it on the chin this year and Large Caps with their international exposure would outperform.

All major sectors of the market were negative last week and year-to-date only energy and materials sector are positive. It is not a surprise that financials are the hardest hit sector. The chart below is a pictorial summary of last weeks market action and was produced by JPMorgan.