War Rotation

Who knew that a war against Iran would cause a mean reversion trade here in the US? So far this week, the best-performing stocks have been ones hit hardest this year through February, and vice versa.

Below we’ve broken the Russell 1,000 into deciles based on each stock’s year-to-date performance through February. For each decile, we show the average stock’s performance so far this week.

As shown, the decile of the worst-performing stocks this year through February is up an average of 3.07% this week. The eight best performing deciles through February are all in the red this week, with the decile of the best performing stocks through February down the most at -2.01%.

Of the 25 worst-performing Russell 1,000 stocks YTD through February, just two are down this week, while on average, they have bounced 6.2%.