Excess Returns · Thursday, August 6, 2026
Chan Yang observes that correlations between various economic indicators and the S&P 500 are breaking down, suggesting a shift towards a new market paradigm. He notes that these correlations are not static and evolve with the market and economy.
“You mentioned the idea of, uh, some of the underlying components driving the market, and you have this chart here that shows the correlation between some of these indicators and the S&P 500. And it's interesting because some of these correlations are breaking down. Can you talk about that?”
“Yeah, so, you know, when we think about the correlations between these indicators and the S&P 500, it's obvious that, you know, these correlations are not static. They change over time.”
“And, you know, obviously, you know, as the market evolves and as the economy evolves, these correlations are going to shift.”
“So, you know, in a way, it's like, you know, we're seeing a breakdown in some of these traditional correlations. And, you know, obviously, you know, it's going to be interesting to see how that plays out. But, you know, in a way, it's like, you know, we're seeing a new paradigm in the market, right?”