Weekly Market Recap: Offense Wins: Tech Leads the Charge
Despite a steady drumbeat of fear-driven headlines—ranging from government shutdown worries to global tensions—markets have continued to climb through what is typically a seasonally weak stretch. August and September strength now set the stage for what could be a powerful Q4, historically the market’s strongest seasonal period.
What’s critical to note is that price action continues to confirm this resilience. The data is not flashing any material warning signs. Instead, risk-on behavior is evident across key offensive sectors—small caps, technology, and crypto-related equities—indicating that market participants are positioning for growth, not retreating from it.
Intermarket Overview
Bitcoin led global assets last week, gaining an impressive 11.06%—quietly setting a new all-time high in weekend trading. When the most speculative asset class leads, it often speaks volumes about risk appetite beneath the surface. The so-called “casino that never closes” is not typically where capital flows if fear truly dominates.
Other strong performers included Emerging Markets (+2.88%) and the Russell 2000 (+1.86%), reinforcing that breadth and participation are broadening beyond mega-cap leadership.
Sector Performance: What’s Happening Under the Hood
Let’s look under the hood across sector performance last week: Energy led to the downside (–3.35%) as crude oil futures fell sharply (–8.23%). Communications followed with a nearly welcome pullback (–1.51%), while Financials (–0.26%) and Consumer Discretionary (–0.77%)—both offensive sectors—saw modest and healthy consolidations after recent strength.
On the other side, Materials (+1.15%) and Industrials (+1.20%) showed solid follow-through, with Industrials finally joining the rally after an extended consolidation. The real upside surprises came from Healthcare (+6.88%) and Utilities (+2.42%).
Healthcare’s rebound offered much-needed relief to a lagging sector, while Utilities’ leadership isn’t necessarily a defensive signal this time. With Utilities increasingly tied to the infrastructure backbone of AI—data centers, energy grids, and power demand—its participation in the “AI trade” is becoming undeniable. This remains a key area of focus moving forward.
Still, all of that pales in comparison to the sector that continues to define this market: Technology. Not only did Tech post a +2.11% weekly gain, it also broke out on a relative basis versus the S&P 500. The Tech/S&P ratio just logged its highest monthly close since 2000—a critical data point supporting our offensive stance. If this truly is a “bubble,” then it may still be in its formative stage. This kind of relative breakout has been 20+ years in the making.
Market Breadth and Positioning
Concerns about narrowing breadth remain overblown. The equally weighted versions of both the S&P 500 and Nasdaq outperformed their cap-weighted counterparts last week, underscoring a broader, healthier rally.
- Equal-Weight Nasdaq: +1.72% vs. +1.21%
- Equal-Weight S&P 500: +1.42% vs. +1.09%
Additionally, the Equally Weighted Consumer Discretionary vs. Consumer Staples ratio—a simple offense-vs-defense gauge—closed September at its highest monthly level in 20 years, confirming continued risk-on positioning among institutional money.
Outlook and Opportunity
While select growth sectors appear extended, pullbacks should be welcomed as buying opportunities, not warning signs. We continue to see constructive intermarket confirmation, relative strength in leadership, and rotation that suggests the path of least resistance remains higher.
Until the data tells us otherwise, we’ll treat negative headlines as background noise—fuel for a market that climbs the wall of worry.
For those who want to dig deeper into my tactical trade ideas, relative strength models, and portfolio construction insights, I publish a more detailed analysis each week exclusively for clients interested in active management and alpha generation.
Reach out to George Wealth Management for more information.
The views stated in this letter are not necessarily the opinion of Cetera Wealth Services, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.