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Market recap

Happy May FS Insight Family!

After a strong start in Q1, the stock market experienced some volatility throughout April. Influenced by tax selling, hotter-than-expected CPI, hawkish Fedspeaks, and disappointing earnings from some high-profile companies (notably from META), we observed significant deleveraging, for example hedge funds' short interest surged to 2022 levels, the VIX futures term structure inverted, and market indicators such as the percentage of members below their 20-day average dropped to 8%, an extremely oversold reading. At the worst, the S&P 500 dropped nearly 5.5% from its high at the end of March. However, thanks to GOOGL, MSFT, and even TSLA, the stock market once again showed resilience. And despite the influence of weaker-than-expected GDP numbers, hotter-than-expected GDP price index, PCE, and ECI in the last few trading sessions, the stock market managed to recover a bit and finished April down 4.2%.

The sector performance in April also reflected the deleveraging we experienced. All sectors were lower on an absolute basis. Relatively speaking, defensive sectors such as Consumer Staples and Utilities led in April. Additionally, due to the intensifica...

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