The market corrections at the start of last month and this month felt eerily familiar, like Neo’s déjà vu moment in The Matrix, when he sees the same black cat walk by twice. At first, all seems normal, until the glitch reveals itself, a repetition of events caused by revisions made to the current situation.

For the financial markets, the déjà vu moment came in the form of the ISM Manufacturing Index (Institute for Supply Management) being revised significantly lower in both months, signalling that we weren’t in familiar territory anymore. Investors found themselves in a shifting landscape, unsure if they were stuck in a loop or staring down a whole new reality. It’s like seeing a black cat and thinking, “No big deal”, but what if that cat was really a black swan? A rare event with the potential to shake everything up? Just like Neo, investors were left wondering if this correction was truly behind them or if something bigger was lurking beneath the surface.

Still, while these early-month market tremors can feel unsettling, history suggests they often fade as the month progresses. Most non-professional investors aren't glued to their screens, nor should they be, they trust experts to manage their assets for a reason. As a result, this initial turbulence tends to smooth out when viewed through their longer-term lenses like monthly, quarterly, or yearly performance. Much like Neo eventually bending the rules of his reality, patience allows investors to see past the distortions and recognise the true direction of the market.

Nb; Thomas Williams from the Equity Team gave me the idea for this post although he had never seen the movie (he was 2 years old when it was released back in 1999).

“Denial is the most predictable of all human responses” –The Architect (The Matrix Reloaded)

The déjà vu scene from The Matrix (1999)

Article by William Raynar