5/9/25 Charts & Ideas: What Markets Are Telling Us

05/09/2025 | Unsubscribe

Good Morning!

Here are some important charts and ideas capturing the latest trends in US markets to help you understand what is happening from multiple different perspectives:

📊 Positioning Snapshot – Early May 2025

1. Overall Equity Exposure

• Z-Score: -0.95 (11th percentile since 2010)
  → Still under-owned, but rising from extremes.
  → Contrarian bullish setup as light positioning = room for upside.

2. Investor Breakdown

• 🧠 Discretionary Investors:

  • Z = -0.16 (35th percentile) → Near neutral

  • Hedge funds and long-onlys are modestly re-risking.

• 📉 Systematic Strategies:

  • Z = -1.6 (6th percentile) → Heavily de-risked

  • Still on the sidelines, but could re-engage if volatility drops or trend signals improve.

💼 What This Could Mean for You

🔹 Short-Term:

Market remains fragile but can grind higher on positioning catch-up as panic subsides.

🔹 Medium-Term:

If macro stabilizes (growth/inflation), systematic buyers may return fast, fueling momentum upside.

🔹 Strategic Actions:

• 🛒 Opportunistic Exposure:
  Add to under-owned sectors (defensives, quality growth) as risk is less crowded.

• 👀 Watch Volatility:
  Declining realized vol is the key trigger for systematic re-entry.

🔁 Alternative Perspectives to Watch

• 🟥 Rally Fragility:
  Without systematic buyers, current gains may fade on bad news.

• 🟨 Discretionary FOMO Risk:
  Re-risking could reverse if macro worsens or inflation flares.

• 🟩 Upside Fuel Remains:
  Light positioning + stable earnings = room for a durable move higher.

🔍 March 2025 Import Surge — A Rare Signal

• 📈 Imports +32% YoY:
  Only the 4th time in 40 years (1984, 2010, 2021) — past spikes followed recessions.

• 📉 Exports Lagging:
  This implies that growth is domestic demand-driven or tied to trade friction, not global recovery.

• ⚠️ Trade Distortion:
  Likely reflects supply-chain reconfiguration amid tariff-related uncertainty (“Voluntary Trade Reset” scenario).

💼 What This Could Mean for You

• 📦 Consumer Demand Still Strong (Short-Term):
  Supports logistics, warehousing, and retail plays.

• 💵 Trade Imbalance Worsening:
  May pressure the U.S. dollar and raise growth sustainability concerns.

• 🔥 Supply-Side Inflation Risk:
  Front-loading imports can lead to inventory build-ups, shipping bottlenecks, and cost inflation.

• ⚙️ Import-Heavy Companies at Risk:
  Complex supply chains + rising costs = earnings risk in late 2025.

🔁 Alternative Views to Weigh

• 🟢 Inventory Restock:
  Could simply be a post-shock replenishment, not demand surge.

• 🟠 Temporary Spike:
  May fade quickly, giving a false signal to risk markets.

• 🔴 Capex + Export Weakness = Risk:
  Suggests foreign demand is fragile — not a reflationary boom.

🔍 Home Prices Show Stable Growth — No Overheating or Crash

• 📈 Feb 2025: +0.4% MoM → Normal seasonal strength.

• 📊 YoY Growth: +3.9% → Slower than post-COVID surge, but steady.

• 🪜 Since 2022 Peak: +5.4% → Market has stabilized post-correction.

• 🏠 Since March 2020: +51% → Huge long-term appreciation.

💼 What This Could Mean for You

• 🏠 Stability for Owners/Investors:
  Prices holding = no broad crash risk for real estate holders.

• 🏦 REITs Could Benefit:
  Residential-focused REITs remain supported by asset values.

• 📉 Limited Fed Flexibility:
  Steady housing inflation may cap how much the Fed can ease.

• ⚠️ Affordability Still Tight:
  51% price gains vs slower wage growth = tough market for new buyers.

🔁 Alternative Perspectives to Consider

• 🟢 Soft Landing Supported:
  Stable housing = macro normalization without crisis.

• 🟠 Seasonal Strength Bias:
  Spring gains common — watch late 2025 for true demand trends.

• 🔴 Affordability Squeeze Looms:
  Rates + high valuations = possible cap on further price gains.

🔍 U.S. Tourism Drops Sharply — -11.6% YoY in March 2025

• 📉 Worst Drop Since GFC:
  Overseas arrivals down -11.6% YoY — sharpest since 2008.

• 🌍 Broad-Based Weakness:

  • 🇪🇺 EU: -17.2%

  • 🇲🇽 Mexico (air): -22.9%

  • 🇨🇦 Canada: -8.1%
    Signals global caution, not just post-COVID normalization.

💼 What This Could Mean for You

• 🏨 Pressure on Travel Equities:
  Airlines, hotels, OTAs, and casinos may face revenue headwinds.

• 📉 Local GDP Risk:
  Tourism-heavy U.S. cities (Vegas, Orlando, NYC) may see slower growth and fewer jobs.

• 🛑 Urban Spending Drag:
  Retail, dining, and entertainment sectors may underperform in tourist hubs.

🔁 Alternative Views to Consider

• 🟢 Policy-Driven Dip?:
  Tariffs/geopolitical uncertainty could reverse if resolved.

• 🟠 Dollar Strength Impact:
  Costlier travel may ease if the USD weakens.

• 🔴 Early Demand Signal?:
  Tourism often leads to broader global demand shifts, worth monitoring.

🔍 Insider Activity Neutral — Current Ratio = 12

• 📊 12 Sales per 1 Buy:
  Right at the neutral threshold — no strong bullish or bearish signal.

• 🟥 Bearish if >20: Suggests insiders think valuations are stretched.

• 🟩 Bullish if <12: Reflects insider confidence in their company’s future.

💼 What This Could Mean for You

• ⚖️ No Clear Signal Yet:
  Insider activity isn't confirming a market top or bottom.

• 🔍 Look Elsewhere for Cues:
  Focus on macro data, earnings trends, valuations, and positioning instead.

• 🔄 Watch for Shifts:
  A drop below 12 could signal renewed insider conviction — a potential bullish tailwind.

🔁 Alternative Views to Consider

• 🟢 Insiders Often Act Early:
  A dip from here could front-run improving sentiment.

• 🟠 Not Always Market-Driven:
  Insider actions may reflect tax or liquidity needs, not fundamentals.

• 🔴 Lagging Indicator:
  By the time insiders act decisively, the market may have already moved.

That’s it for today!

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Best Regards,

Ultimate Alerts Team

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