Todd Sullivan·2026-05-16·via All Articles on Seeking Alpha
Summary
Near-term highs in retail money funds are always associated with the level of market pessimism and closely correlate with significant SP500 cycle lows.
Today, both series are at record highs, but the details that underscore the relationship remain.
The drivers of the SP500 are the "recession proof" high-tech issues believed to be so immune to economic downturn that 10 of these now represent over 40%+ of the total value of the SP500.
What is different in this cycle is that the mega-sized, momentum-driven portfolios are chasing these select issues because they are economically pessimistic.
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A useful relationship has long been held between the SP500 and retail money funds. Near-term highs in retail money funds are always associated with the level of market pessimism and closely correlate with significant SP500 cycle
