Momentum

Has Momentum run its course?

Solid move back in the markets, but we wonder if recent leadership has not run its course? Momentum basket relative to the SPX Index may just be running out of steam at these extended levels.

Hard vs Soft data

The conventional wisdom is that the hard data on the labor market are still strong. However, job openings are hard data, and they continue to deteriorate.

With the job openings rate having moved to the flat side of the Beveridge curve, unemployment is likely to start rising.   

On an absolute basis also trending below pre-pandemic levels.

Home Sales

Home Sales were released Thursday, May 22^nd. Below we chart them as well as the 30yr Average Jumbo mortgage rates. It looks to us that if rates stay above 6%, its hard to see Home sales contributing meaningfully to the economy and GDP.

Perspective: 25-year averages vs 2025 YTD

No surprise April is close to its 25-year average. After May, on an annualized basis, it looks like sales should improve if the script holds.

Inventory levels still not close to threatening territory though.

Looked at another way.

What could happen to these charts though might well be totally dependent upon those national mortgage rates trending below 6%.

Family Offices positioning

How is the 1% of the 1% deploying capital? According to UBS it looks something like this.

Have a great holiday weekend!

Best,

Meraki trading team