Investors have now lived through several weeks of heightened market volatility, driven primarily by a combination of disappointing economic data and erratic policymaking. As we’ll point out in this piece, the amount of market churn – especially intraday – has been unusually high while the peak-to-trough declines in most major indexes have not…at least, not yet.

In many ways, investors are facing a similar harsh reality of change today, as they confront how different the world, markets, and policy priorities are in 2025 than they were in, say, 2017.

Thursday and Friday saw the beginnings of an unwind of the ultra-dominant U.S. large cap momentum trade (think of the momentum factor as the Newton’s First Law factor, “an object in motion stays in motion”, with momentum capturing the dynamic that if a stock has been performing well it will continue to perform well).

It’s never fun to write about disappointment on Valentine’s Day, but Pat Benatar would agree that this week’s inflation data was more “love taker” than “dream maker”.