Positive Week for AltFi Fintech Index
The AltFi Fintech Index had an impressive performance last week, marking its second best week of 2023 with a significant return of 11.23%. This surge was nearly twice the S&P 500’s rally of 6% between 30 October and 3 November.
Lemonade – A Standout Performer
Among the top performers in the AltFi Fintech Index during this period was Lemonade, a digital insurance company. Lemonade witnessed a remarkable jump of almost 50% in just one week, driven by improving prospects for the company’s profitability.
SoFi, another constituent of the AltFi Fintech Index, also experienced positive growth with a substantial increase of nearly 10% last week.
Macro Factors Driving the Index
The overall gains in the AltFi Fintech Index can be attributed to the improving macroeconomic conditions. The market sentiment improved after the US Federal Open Market Committee (FOMC) decided to keep interest rates unchanged. This stabilizing factor led to a better investment outlook.
George Lagarias, chief economist at Mazars, commented, ‘Last week was one of the best on recent record for both stock and bonds. The S&P 500 gained nearly 6%, erasing more than half of its recent correction. Meanwhile, US Treasury bonds also saw gains, with the 10-year and 30-year bonds registering 2% and 4% increases respectively.’
Additionally, Lagarias mentioned that the rate pause by the Fed and the possibility of future rate cuts contributed to the positive market sentiment.
Recovery for Zip
Zip, one of the worst performers in the AltFi Fintech Index in 2023, experienced a significant rebound last week. The ASX-listed ‘buy now, pay later’ (BNPL) platform saw its shares rise by nearly 40%.
Overall, this impressive week for the AltFi Fintech Index mirrored the gains achieved between 6 July and 13 July 2023 when it recorded a jump of 11.8%.
