Equity leadership reversed while commodities retained the lead
Former equity leaders weakened during the quarter as commodities remained strong and long-duration bonds stayed under pressure.
The take
Equity leadership rotated toward prior laggards, commodities remained the strongest cross-asset exposure, and bonds did not confirm a broad defensive shift.
What is leading, and over what horizon
One row per market exposure, nine horizons across. A move that leads over a day often lags over a decade, and the point of putting them side by side is that you can see which is which.
| Exposure | WTD | MTD | QTD | YTD | 1Y |
|---|---|---|---|---|---|
| U.S. large capIVV | U.S. large cap, Week to date: down 1.9 percent | U.S. large cap, Month to date: up 2.1 percent | U.S. large cap, Quarter to date: up 2.3 percent | U.S. large cap, Year to date: up 11.9 percent | U.S. large cap, 1 year: up 21.1 percent |
| U.S. large cap, equal weightRSP | U.S. large cap, equal weight, Week to date: down 1.1 percent | U.S. large cap, equal weight, Month to date: up 2.5 percent | U.S. large cap, equal weight, Quarter to date: up 3.5 percent | U.S. large cap, equal weight, Year to date: up 15.9 percent | U.S. large cap, equal weight, 1 year: up 22.3 percent |
| U.S. small capIJR | U.S. small cap, Week to date: down 2.2 percent | U.S. small cap, Month to date: up 0.6 percent | U.S. small cap, Quarter to date: down 1.3 percent | U.S. small cap, Year to date: up 21.8 percent | U.S. small cap, 1 year: up 33.7 percent |
| Developed ex-U.S.EFA | Developed ex-U.S., Week to date: down 1.2 percent | Developed ex-U.S., Month to date: up 1.7 percent | Developed ex-U.S., Quarter to date: up 3.3 percent | Developed ex-U.S., Year to date: up 11.8 percent | Developed ex-U.S., 1 year: up 22.9 percent |
| Emerging marketsEEM | Emerging markets, Week to date: down 0.1 percent | Emerging markets, Month to date: up 3.9 percent | Emerging markets, Quarter to date: down 2.6 percent | Emerging markets, Year to date: up 21.8 percent | Emerging markets, 1 year: up 37.4 percent |
| JapanEWJ | Japan, Week to date: down 4.3 percent | Japan, Month to date: up 2.0 percent | Japan, Quarter to date: up 1.1 percent | Japan, Year to date: up 17.4 percent | Japan, 1 year: up 26.2 percent |
| ChinaMCHI | China, Week to date: up 2.0 percent | China, Month to date: down 0.5 percent | China, Quarter to date: up 8.8 percent | China, Year to date: down 7.0 percent | China, 1 year: down 2.8 percent |
| U.S. aggregate bondsAGG | U.S. aggregate bonds, Week to date: down 0.2 percent | U.S. aggregate bonds, Month to date: up 0.5 percent | U.S. aggregate bonds, Quarter to date: down 1.2 percent | U.S. aggregate bonds, Year to date: down 2.1 percent | U.S. aggregate bonds, 1 year: up 2.5 percent |
| Long TreasuriesTLT | Long Treasuries, Week to date: down 0.3 percent | Long Treasuries, Month to date: up 0.5 percent | Long Treasuries, Quarter to date: down 4.4 percent | Long Treasuries, Year to date: down 5.2 percent | Long Treasuries, 1 year: down 1.3 percent |
| High yieldHYG | High yield, Week to date: down 0.3 percent | High yield, Month to date: up 0.6 percent | High yield, Quarter to date: down 0.1 percent | High yield, Year to date: down 0.8 percent | High yield, 1 year: up 5.1 percent |
| Cash / Treasury billsBIL | Cash / Treasury bills, Week to date: up 0.1 percent | Cash / Treasury bills, Month to date: up 0.2 percent | Cash / Treasury bills, Quarter to date: up 0.5 percent | Cash / Treasury bills, Year to date: up 2.3 percent | Cash / Treasury bills, 1 year: up 3.9 percent |
| GoldGLD | Gold, Week to date: up 4.1 percent | Gold, Month to date: up 11.8 percent | Gold, Quarter to date: up 12.7 percent | Gold, Year to date: up 4.8 percent | Gold, 1 year: up 32.6 percent |
| Broad commoditiesDBC | Broad commodities, Week to date: up 4.5 percent | Broad commodities, Month to date: up 5.6 percent | Broad commodities, Quarter to date: up 16.7 percent | Broad commodities, Year to date: up 39.1 percent | Broad commodities, 1 year: up 47.2 percent |
| U.S. real estateVNQ | U.S. real estate, Week to date: up 0.0 percent | U.S. real estate, Month to date: down 0.4 percent | U.S. real estate, Quarter to date: up 2.3 percent | U.S. real estate, Year to date: up 11.4 percent | U.S. real estate, 1 year: up 15.0 percent |
Total return, from adjusted closes. Data through Aug 20, 2026. — marks an observation we do not have. Annualised horizons are rates per year; the shorter horizons are cumulative.
Chart of the week
Scatterplot of 16 equity exposures. Year-to-date return is on the horizontal axis and quarter-to-date return is on the vertical axis. Higher year-to-date exposures generally have lower quarter-to-date returns.
Source: Adjusted closes via security_measures and exact period anchors; deterministic 2026-08-20 editorial dry run. · Data through Aug 20, 2026
Equity leadership reversed
- The six highest-ranked YTD equity exposures averaged −1.9% QTD.
- The six lowest-ranked YTD equity exposures averaged +3.6% QTD.
- The YTD-versus-QTD Spearman rank correlation across 16 equity exposures was −0.72.
- U.S. Momentum returned −11.0% QTD; U.S. Minimum Volatility returned +4.4%.
Commodity strength persisted
- Broad Commodities returned +4.5% WTD, +16.7% QTD and +39.1% YTD.
- Broad Commodities ranked first in Core Markets at four of five published horizons.
- Energy ranked first among 11 sectors at all five published horizons.
- Gold returned +11.8% MTD and +12.7% QTD.
Rate pressure remained elevated
- Long Treasuries returned −4.4% QTD and −5.2% YTD.
- U.S. aggregate bonds returned −1.2% QTD and −2.1% YTD.
- Cash returned +2.3% YTD, ahead of every tracked Treasury exposure.
- High yield was approximately flat QTD at −0.1%.
Market conditions
Six neutral readings of the conditions behind the returns. Each states what it measures and where the measurement comes from; none of them is an instruction.
The share of index members participating across short and long trend lengths.
53.4% of 498 measured S&P 500 constituents were above the 50-day average and 72.9% were above the 200-day; the gap was 19.5 percentage points. · 2026-08-20 editorial dry run, S&P 500 breadth
The degree to which short-horizon equity rankings differ from year-to-date leadership.
Spearman rank correlation between YTD and QTD return was −0.72 across 16 equity exposures. · 2026-08-20 editorial dry run, Core Markets equity subset
Market performance of investment-grade and high-yield credit proxies.
High yield returned −0.1% QTD and −0.8% YTD; investment-grade credit returned −2.4% QTD and −3.4% YTD. Credit spreads are not included. · 2026-08-20 editorial dry run, Core Markets
Performance pressure associated with holding longer-duration Treasury exposure.
Long Treasuries returned −4.4% QTD and −5.2% YTD while cash returned +2.3% YTD. · 2026-08-20 editorial dry run, Core Markets
Whether major asset classes point in a common direction across published horizons.
Broad Commodities led QTD at +16.7% while Long Treasuries returned −4.4% and U.S. equities returned +2.3%. · 2026-08-20 editorial dry run, Core Markets
Three numbers we’re carrying forward
Measurements, not predictions. We will print these again next week beside their new values.
Does the YTD-versus-QTD rank correlation across the 16 equity exposures remain materially negative?
It measures whether the leadership reversal persists as the quarter lengthens.
Does the gap between S&P 500 participation above the 200-day and 50-day averages widen or narrow?
The gap separates long-horizon participation from the weaker short-horizon reading.
Do Broad Commodities and Energy retain leadership while Long Treasuries remain weak?
It tests whether the current cross-asset divergence persists across another session.