Third risk-off in the last 12 months.

Looking through the prism of the S&P500, we currently have the third major correction since July 2023.

The first one lasted from July 31 to October 27, 2023 - the S&P500 decreased by 10.35%.

The second correction took place in April this year, the S&P500 fell 5.5%. The current decline (from the peak of July 16) is 2.9%. See Figure 1.

During the correction in 2023 and April 2024, the largest decline occurred in small companies (Russell 2000). Currently, the Russell 2000 return in July 2024 is the best monthly result since December 2023 (month-to-date +6.67%, including a 3.5% decline from the top on July 16). See Figure 2.

In the case of Nvidia, the current drawdown is already 13.02%. In April, the drawdown was 19.79%, and during the correction in 2023 it was 18.29% - see Figure 3.

So far, the current risk-off is similar to the two previous such cases, only the performance of small companies is an exception.