Important Information
This information is provided for general educational purposes only without regard to your particular investment needs. This material, including any attachments or hyperlinks, should not be taken as investment or tax advice of any kind whatsoever (whether impartial or otherwise) on which you may rely for your investment decisions, nor be construed as an offer, solicitation or recommendation for any investment strategy, product or service. Investors should consult their financial and tax adviser before making investments in order to determine the appropriateness of any investment discussed herein.
Material authored by any particular Artisan Partners individual or team represents their own views and opinions, which may or may not reflect the views and opinions of Artisan Partners, including its autonomous investment teams or associates. Statements are based on current market conditions and other factors, which are as of the date indicated and are subject to change without notice. While this information is believed to be reliable, there is no guarantee to the accuracy or completeness of any statement in the discussion.
All investments are subject to risk, which includes potential loss of principal. Past performance is not indicative of future results.
This material may reference index or other information that is subject to copyright by its respective service provider, including the following: MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. Frank Russell Company ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication. The S&P 500 and S&P UBS Leveraged Loan Indices are products of S&P Dow Jones Indices LLC (“S&P DJI”) and/or its affiliates and has been licensed for use. Copyright © 2025 S&P Dow Jones Indices LLC, a division of S&P Global, Inc. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). None of S&P DJI, Dow Jones, their affiliates or third party licensors makes any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The Index may not be copied, used, or distributed without J.P. Morgan's prior written approval. Copyright 2025, J.P. Morgan Chase & Co. All rights reserved. Source ICE Data Indices, LLC, used with permission. Source ICE Data Indices, LLC is used with permission. ICE® is a registered trademark of ICE Data Indices, LLC or its affiliates and BofA® is a registered trademark of Bank of America Corporation licensed by Bank of America Corporation and its affiliates ("BofA"), and may not be used without BofA's prior written approval. The index data referenced herein is the property of ICE Data Indices, LLC, its affiliates (“ICE Data”) and/or its third party suppliers and, along with the ICE BofA trademarks, has been licensed for use by Artisan Partners Limited Partnership. ICE Data and its Third Party Suppliers accept no liability in connection with the use of such index data or marks. See www.artisanpartners.com/ice-data.html for a full copy of the Disclaimer. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment.
© 2025 Artisan Partners. All rights reserved.
Growth Team Weekly Investment Insights
After a few weeks off due to vacation and working through the quarter-end rush, we are back.
1) Deflation
Starting at a higher level, there has been a lot of data released over the past few weeks that point to a macro environment of slowing inflation and a slowing (albeit still strong) economy.
The June consumer price index (CPI) reading showed a monthly decrease of 0.1%. The last time the US had a deflationary CPI reading was July 2022. This follows a 0.0% reading in May.
One of the driving factors of the recent fall is shelter inflation, which registered a 0.2% MoM reading (the lowest since August 2021). This has been largely expected due to its lag compared to real-time estimates from housing companies like Zillow.
2) The Great Rotation
This kicked off a historic market rotation. Rates fell as the market priced in a September Fed rate cut, and smaller, cyclical and higher-debt companies all rallied. Looking at rolling five-business-day returns of the Russell 2000® Index versus the NASDAQ Composite Index, we just experienced a period of ~13% outperformance. This was the biggest disparity (in either direction) of the last 20+ years!
If we dissect the Russell 1000® Index returns since CPI day on July 11, cyclical sectors, along with smaller and more indebted companies, outperformed, as fears of future refinancing pressures eased.
3) Semiconductors: The Perfect Storm?
Semiconductors have hit the perforce storm. As we highlighted earlier, the market has at least temporarily rotated away from growth companies in the technology sector. At the same time, these companies have been pressured by rhetoric from both sides of the political aisle. First, Donald Trump commented that “Taiwan should pay us for defense,” and second, President Joe Biden’s administration indicated that it is considering using the most severe trade restrictions available against China.
The industry group went from outperforming the broader index by >500bps on July 10 to underperforming by -600bps, an 11% swing in relative returns in just seven trading days.
4) Netflix Rakes in Subscribers, Earnings and Emmy Nominations
Netflix continued its impressive run of adding new users, reporting eight million new subscribers in its most recent earnings release. However, the company warned that its next reported new subscriber number would likely be lower than a year ago, given the challenging comparison versus when its password-sharing crackdown went into full effect.
Netflix’s fundamental results remain encouraging, and the future continues to look bright, considering the benign competitive environment and its production of quality content. This year, it surpassed HBO for the most Emmy nominations.
5) Big US Banks Warn of Financial Stress Among Lower-Income Customers
This Financial Times article summarizes some of the findings from the latest batch of financial results from the big US banks. One common theme was evidence of stress among lower-income consumers.
Artisan Partners Growth Team manages portfolios that held securities issued by Netflix as of 6/30/24. Portfolio securities are subject to change.
Contact the Editorial Staff
Have a question or comment? We welcome your feedback. Comments will not be made public, but will be read by a member of our editorial staff.
Thank you for your question or comment.