The Monday Morning Playbook: Week of March 3, 2025

Good morning,

Sometimes you don’t want to be right.

We were off last week, but in our last MMP on February 17, I expressed a number of reasons for caution, including:

• Poor seasonality in the second half of February

• Overbought readings in the ARK funds

• Extreme performance differentials between equal-weight discretionary stocks and consumer staples

• A lack of new highs even as the index was trading near all-time highs

In the past two weeks, the S&P 500 is down 2.6%, including a 4-day losing streak, the ARK funds have collapsed more than 17%, equal-weight staples have outperformed discretionary by more than 6%, and new highs remain few and far between, despite a new all-time price high for the S&P 500 on February 19.

Now, that is what has happened, but as always, what matters now is what will happen.