November 16, 2025
A shifting market mood
Momentum still leans toward a familiar set of leaders, but the tone has changed. The broader landscape feels less decisive, more unsettled, and increasingly defined by hesitation rather than conviction.
A top tier losing altitude
Momentum leadership remains nominally intact, with international and growth exposures still at the front of the pack. The Vanguard FTSE Emerging Markets ETF (VWO) anchors the top group with a 3-month rate of change of 7.3%, ahead of the SPDR S&P 500 ESG ETF (EFIV at 6.0%) and the Invesco QQQ Trust (QQQ at 5.6%). VWO’s outperformance underscores a clear lean toward emerging markets, while EFIV and QQQ continue to reflect—albeit with moderating force—the strength of large-cap growth.
On the opposite end, the SPDR S&P Dividend ETF (SDY at –0.8%), alongside MDYV (1.3%) and MDYG (1.4%), remains mired at the bottom. The persistent softness in mid-cap and dividend-oriented strategies shows little sign of improving.
Deceleration spreads across the board
Week-over-week shifts reveal a market stepping off the accelerator. The iShares Russell 2000 ETF (IWM) posted the steepest pullback, with momentum dropping 5.1 points and undoing much of its recent progress. Small-cap value and growth exposures followed suit: SLYV fell 4.2 points and SLYG 4.1. Even the current leaders lost steam—VWO and EFIV slipped modestly, while QQQ and IWF eased by 0.6 and 0.8 points, respectively, indicating that last week’s large-cap growth surge has faded.
No ETF crossed below zero momentum, but several registered technical breakdowns. SLYG, MDYV, and MDYG now display both weak momentum and fresh deceleration, a combination that often foreshadows further relative underperformance.
Resilience without excess, volatility without clarity
On a 12-month lookback, VWO stands out: its current momentum sits in the 65th percentile for the year, yet it remains nearly 12 points below its peak—a constructive blend of resilience and restraint. EFIV and SLYV show similar profiles: solid relative position but comfortably removed from their highs.
Large-cap growth, by contrast, is struggling to sustain past strength. QQQ sits 26 points below its annual top, with IWF and SPYG also far off their peaks, a sign of wavering trend persistence.
Despite the cooling, mean reversion signals remain muted, suggesting little near-term risk of sharp reversals. But volatility is elevated—particularly in IWM, SLYV, and QQQ—highlighting larger swings and diminishing predictability.
Our take
As of mid-November, momentum leadership still tilts toward emerging markets and ESG-aligned large-cap growth, but with far less vigor than before. Small-cap and growth ETFs have seen their momentum deteriorate sharply, while VWO and EFIV exhibit a steadier, if subdued, resilience. The widening gap between stronger international exposures and weakening domestic small-caps—coupled with ongoing softness in dividend and mid-cap value strategies—points to a market searching for direction rather than building on existing trends.
A turning point for fixed-income leadership
Momentum across bond markets is pulling in different directions, revealing a market that’s increasingly uneven. With long-duration Treasuries and emerging market debt firming up while credit stumbles, the landscape has shifted from broad recovery to selective resilience.
Long bonds break away
Three-month trailing rate-of-change data show momentum diverging sharply across both maturity and credit quality. Long Treasuries lead the field, with TLT out in front, followed closely by EMB. Core aggregate exposure (AGG) retains third place but at a distance.
At the opposite end, short-duration credit and global aggregates—represented by VCSH, BNDX, and JNK—sit firmly at the bottom, illustrating the drag weighing on shorter corporate maturities and international benchmarks.
Credit loses its footing
The week’s most dramatic momentum shifts are concentrated in credit. LQD posted the steepest deceleration, while EMB also slipped but kept its lead. High yield and short corporates both weakened enough to trigger breakdowns, pairing soft momentum with accelerating deterioration.
Long Treasuries, meanwhile, moved in the opposite direction: TLT registered a clear breakout as its momentum pushed above its 12-month median. The rest of the Treasury curve was mixed, with intermediate maturities fading and the front end—along with TIPS—barely moving.
Strength holds, but not without cracks
Over the past year, TLT sits in the upper tier of its momentum distribution, though meaningfully off its peak, suggesting strength with signs of cooling. EMB shows steadier resilience, remaining well-positioned and not statistically stretched.
Core and global aggregates look more fragile, sitting in mid-range percentiles but far below their highs. High yield, now drifting toward the middle of its range after a breakdown, signals growing instability. Volatility patterns reinforce the divide: long Treasuries show moderate swings, while EMB and LQD remain steadier. Short and intermediate exposures remain calm but lack trend persistence, with frequent reversals.
Our take
Momentum in fixed income has splintered. Long Treasuries and emerging market bonds continue to hold up, while credit—especially high yield and short corporates—has weakened further. The divide between government and credit exposures has widened, the maturity curve favors the long end, and leadership has narrowed to a small set of resilient segments amid rising stress elsewhere.
Happy Long-Term Investing!