SERIES: BAMLH0A0HYM2 (3.26)
VIXCLS (17.2)
INDPRO (103.9506)
UMCSENT (48.1)
CPIAUCSL (336.298)
CPILFESL (338.896)
DCOILWTICO (103.37)
MORTGAGE30US (7.24)
PCEPI (132.257)
ICSA (194000)
PAYEMS (159044)
UNRATE (4.2)
M2SL (23413.9)
NETLIQ (5745.73)
RRPONTSYD (4.375)
WALCL (6745635)
WTREGEN (999727)
DFII10 (2.63)
DGS10 (4.98)
DGS2 (4.61)
FEDFUNDS (3.75)
SOFR (3.94)
T10Y2Y (0.38)
FRED // M2SL
M2 Money Supply Stock (Seasonally Adjusted)
LIQUIDITY Monthly
OBSERVATION DATE: 2026-09-01 • UNIT: $B
LATEST OBSERVATION
23413.9 $B
PRIOR / PERIOD Δ
23300.9 (+ 113.00)
YOY CHANGE
+ 5.71 $B
M2SL // M2 Money Supply Stock (Seasonally Adjusted) ($B)1Y: +1264.70 (+5.7%)
2026-09-01OBSERVATION: 23,413.9 ($B)
11 S&P 500 GICS SECTOR PEARSON CORRELATION MATRIX VS. M2SL SORTED TAILWIND (+r) ──► HEADWIND (-r)
| ETF | GICS SECTOR | PEARSON r | CORRELATION BAR (-1 TO +1) | R² | BETA / REGIME TRANSMISSION |
|---|---|---|---|---|---|
| XLRE | Real Estate | +0.26 r | | 7% | [+3.92% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLF | Financials | +0.24 r | | 6% | [+3.45% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLP | Consumer Staples | +0.14 r | | 2% | [+1.54% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLI | Industrials | +0.14 r | | 2% | [+1.99% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLK | Technology | +0.14 r | | 2% | [+2.65% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLB | Materials | +0.11 r | | 1% | [+1.67% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLY | Consumer Discretionary | +0.11 r | | 1% | [+1.89% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLV | Health Care | +0.10 r | | 1% | [+1.15% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLU | Utilities | +0.09 r | | 1% | [+1.29% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLE | Energy | +0.08 r | | 1% | [+1.62% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL |
| XLC | Communication Services | +0.07 r | | 1% | [+1.1% per +1% delta] Low-beta regime neutral across 5Y M2SL cycle (258W) |
AI MACRO REGIME IMPACT BRIEF ACCOMMODATIVE
M2 LIQUIDITY SURGES TO RECORD 23413.9 $B: SYSTEMIC EXPANSION FUELS PRO-CYCLICAL ASSET RE-RATING
Seasonally adjusted M2 money supply advanced by +113.000 $B sequentially to print at a fresh 52-observation high of 23413.9 $B (up from 23300.9 $B prior, with YoY expansion at +5.71 $B), confirming broad-spectrum balance sheet and deposit creation re-acceleration. This structural injection of liquidity compresses aggregate cost-of-capital, loosening financial conditions and supporting equity multiples across high-beta segments. As bank deposit growth and credit aggregates clear friction points, cross-asset discount rates soften, disproportionately benefiting balance-sheet-heavy and rate-sensitive structures over defensive defensive cash proxies.
▲ REGIME TAILWIND SECTORS
XLRE // Real Estate
XLRE exhibits the highest positive correlation (Pearson r = +0.26, R² = 0.07) and outsized beta sensitivity of +3.92% per +1% change in M2SL. Broad liquidity expansion drives down credit spreads and cap rates, unlocking refinancing pipelines and asset revaluation.
XLF // Financials
Posting a strong positive correlation (Pearson r = +0.24, R² = 0.06) with a +3.45% beta sensitivity, XLF capitalizes on balance sheet re-expansion, commercial deposit accretion, and improved liquidity velocity that drives fee generation and loan volumes.
XLK // Technology
Displaying a positive correlation of Pearson r = +0.14 (R² = 0.02) and elevated beta sensitivity of +2.65%, long-duration mega-cap tech cash flows directly re-rate as abundant systemic liquidity lowers terminal equity hurdle rates and fuels capex deployment.
▼ REGIME HEADWIND SECTORS
XLC // Communication Services
With the lowest correlation across the complex at Pearson r = +0.07 (R² = 0.01) and beta sensitivity of just +1.1%, XLC experiences capital rotation outflows into higher-beta liquidity plays as macro risk tolerance climbs.
XLE // Energy
Registering a muted Pearson r = +0.08 (R² = 0.01) and +1.62% beta sensitivity, Energy lags in unsterilized liquidity expansions where physical supply-demand imbalances and capital discipline dominate performance over macro liquidity tailwinds.
XLU // Utilities
Holding an anemic Pearson r = +0.09 (R² = 0.01) with beta sensitivity of +1.29%, bond-proxy utilities face institutional factor-rotation drag as capital rotates out of defensive dividend profiles into high-velocity pro-cyclical sectors.
HISTORICAL ANALOG // 2020-2021 Quantitative Easing & Broad Liquidity Surge: Unprecedented M2 expansion unlocked historic multiple expansion where S&P 500 factor leadership pivoted aggressively into high-beta, duration, and financial assets, while bond-proxy defensives (Utilities and Staples) severely lagged on a relative basis.
EQUITIES MOST SENSITIVE TO M2SL STOCK BETA
| TICKER | LAST | % CHG | CORR (r) |
|---|---|---|---|
| NVDA Technology | $213.66 | -0.80% | + 0.00 |
| AAPL Technology | $348.91 | +1.48% | + 0.00 |
| MSFT Technology | $530.14 | -0.16% | + 0.00 |
| GOOGL Communication Services | $283.82 | -12.64% | + 0.00 |
| GOOG Communication Services | $282.32 | -12.29% | + 0.00 |
| AMZN Consumer Discretionary | $243.79 | -4.25% | + 0.00 |
| TSM Technology | $431.81 | -1.75% | + 0.00 |
| SPCX Technology | $143.89 | -0.92% | + 0.00 |
| AVGO Technology | $345.00 | -1.94% | + 0.00 |
| META Communication Services | $624.52 | +1.96% | + 0.00 |