Equal-Weight Nasdaq 100 on Track for Record Underperformance vs S&P 500
The equal-weighted Nasdaq 100 is underperforming the S&P 500 by 6.8 percentage points in July, set for its worst relative month on record, as investors rotate out of tech stocks at an unprecedented pace.
The equal-weighted Nasdaq 100 has fallen 4.6% month-to-date in July, while the equal-weighted S&P 500 has gained 2.2% to trade at an all-time high.
This 6.8 percentage point gap marks the largest monthly underperformance by the average tech stock relative to the average S&P 500 stock in at least 20 years. Over that period, no single month saw a gap exceeding 5 percentage points.
The rotation comes after four consecutive months of outperformance by equal-weighted technology shares. Investors are booking profits on tech names at a historic pace, pushing the equal-weighted Nasdaq 100 near its lowest level since mid-May.
Source: The Kobeissi Letter