The epicenter of America’s power crisis appears to be on the PJM Interconnection grid, with the Mid-Atlantic area at ground zero. Power bills in the Baltimore area are skyrocketing, driven mostly by disastrous green policies that have shuttered reliable, low-cost fossil fuel power generation plants in favor of unreliable solar and wind energy, allegedly to address a climate crisis. Now demand is surging, whether from AI data centers, EVs, or other electrification trends, which means there’s a massive mismatch in power supply versus power demand. 

Goldman analysts led by Hongcen Wei have been tracking the power crisis and warned in a note on Wednesday that power market tightening has expanded from the three grids they covered last month (read here) to all regional markets. 

“We find that 9 out of 13 US regional power markets have already reached critical tightness this summer, while expecting all but one to reach critical tightness by 2030,” Wei wrote in the note to clients. 

The analyst continued, “For the rest of this summer, we highlight power reliability risks in PJM (Mid-Atlantic), MISO (Mid-Continent), the Northeast (New York and New England) and the Southeast (Florida and Tennessee), given both critical tightness and forecasted August heatwaves.” 

He warned: “Critical tightness could lead to power price spikes and blackouts with significant social and economic losses.” 

As of mid-August, 9 of the 13 U.S. regional power grids have already reached dangerously low spare capacity levels that are at or below the critical reliability threshold. This raises blackout threats and results in power price spikes during high-demand usage hours. 

On the subject of critical reliability issues, it took just one substation failure earlier this week in Baltimore to put more than a million Baltimore Gas and Electric customers on notice for potential hours-long blackouts. The issue was resolved within hours, but it underscores how fragile the local grid has become after years of epic mismanagement by the state’s Democratic leadership under the guise of going ‘green’… 

Delegate Robin Grammer of Baltimore County… 

It’s an unbelievable disgrace what the Democrats have done to the people of this state. https://t.co/ogqeCHafQQ

— Robin Grammer (@RobinGrammer) August 11, 2025

Goldman’s Wei warned clients: “Most US regional markets remaining critically tight through 2030.” 

“Since we published on the US peak summer power market tightening, solid power demand growth further fueled by heatwaves has significantly tightened multiple regional markets, especially PJM (Mid-Atlantic), where power demand and prices have reached record-highs,” the analyst said. 

Wei outlined three contributing factors to power market tightening:

1. Solid power demand growth, which remains the most important factor impacting all regional markets,

2. Insufficient renewable and natural gas power build-up to offset scheduled coal retirements,

3. and Power storage and other newer technologies remaining too limited to fill the gap.

What a mess. 

Green energy policies purged grids of stable coal power generation.

Back to the epicenter of the power crisis. Marylanders are not thrilled about the power bill hyperinflation.

And the power bill crisis is tanking the ratings of the far-left Maryland Governor Wes Moore and the Democratic Party in Annapolis. 

Folks are mad. This will only worsen. 

Like Goldman, our view is that the power bill crisis cycle is just in the early innings. Just wait until this winter in the Mid-Atlantic.

And just like that, the rush to “go green” to save the planet from a manufactured crisis – merely a marketing and PR ploy by Democrats for fundraising – has led to mismanaged grids nationwide, now dangerously teetering on the verge of becoming third-world, like Cuba, with constant rolling blackout threats.

Somewhat good news: President Trump has been proactive, issuing an order to delay the retirement of coal-fired power plants and boosting investments in nuclear power.

Timestamp. 

In one year, this will be the most popular chart on this site pic.twitter.com/h93gWXMoNL

— zerohedge (@zerohedge) August 11, 2025

For those hoping nuclear will save the day.

Hey @grok how long does it take to build a new nuclear power plant https://t.co/iX4l8J6WiR

— zerohedge (@zerohedge) August 11, 2025

Well, it’s a 2030 story.

The opening of the Gordie Howe International Bridge, planned for fall 2025, may slip into early 2026 due to possible delays at the U.S. Customs Port of Entry and surrounding road connections in southwest Detroit, according to an S&P Global Ratings analysis.

S&P’s April report said a missed “handover date” last September prevented U.S. Customs from starting the six months of work it needs to prepare the new 167-acre port complex, delaying “substantial completion by about six months.” The revised handover target was July 31, but it’s unclear if it was met, according to the Detroit News.

Heather Grondin, chief relations officer for the Windsor-Detroit Bridge Authority, disputed that the S&P report reflects “a direct measure of BNA’s ability to deliver the project,” referring to Bridging North America, the public-private group building the bridge. She did not repeat the “October or November” opening timeframe mentioned in March.

“As with any major construction project, at this stage, it is too early to offer a specific opening date for the Gordie Howe International Bridge as it is dependent on many factors, including the need to rectify any issues discovered during the ongoing testing and commissioning phase,” Grondin said. “Work is progressing well towards our anticipated construction completion in fall 2025.”

The Detroit News wrote that the U.S. Port of Entry includes border inspection, maintenance facilities, and 36 primary inspection lanes. Grondin said construction is advancing on all 13 structures, with interior work underway on six buildings and landscaping, paving, and fencing in progress.

S&P also cited delays in the Michigan Interchange — four new road bridges, five pedestrian bridges, and four rail-crossing bridges connecting to I-75 — now expected to finish Aug. 31, more than 120 days past contract.

The Canadian-financed bridge will compete with the Ambassador Bridge. Early estimates suggest it could absorb about 60% of the Ambassador’s traffic, with 6,000 daily commuters expected from Ontario.

Various media reports in Europe as well as US state-funded publications have observed and reported on an unusually high number of air defense systems around President Vladimir Putin’s secluded Valdai residence.

RFE/RL affiliate Radio Svoboda has claimed that’s were Putin’s girlfriend and their children live, according to a new investigation. “Satellite images and photos from the Yandex.Zerkala mapping service show at least 12 Pantsir-S1 surface-to-air missile systems, many mounted on elevated towers, encircling the compound known as Uzhin,” the Amsterdam-based Moscow Times writes of the report.

Only two such units had been publicly and visually identified in the area before the new satellite imaging and mapping analysis. 

“By comparison, in the Moscow metropolitan region, home to more than 20 million people, authorities have positioned around 60 such systems since the start of the war in Ukraine — just five times more than the number protecting the Valdai site,” Moscow Times continues.

So if it is accurate that at least a dozen Pantsirs are now protecting Putin’s residence alone, this is indeed a signifcant build-up and density of anti-air units protecting a single high value location.

The ‘extra’ units were reportedly redeployed from the St. Petersburg region – which could leave this northern and second most populous Russian city more exposed to drone attacks.

The Kremlin has long vehemenly denied that Putin is having a relationship with 42-year old Alina Kabaeva, and the Russian leader has been well-known for keeping his private life and family extremly secretive and sheilded from any media scrutiny.

“The investigative outlet Dossier Center has reported that the residence is used by Alina Kabaeva, the former Olympic gymnast who leads the National Media Group and is widely reported to be Putin’s long-term partner,” Moscow Times notes. It’s believed she spends much of the year at the Valdai residence with her two young sons.

“In February 2023, the investigative site Proekt reported that a dedicated home for Kabaeva had been built next to the Valdai residence, complete with its own private railway spur,” the same report says.

Putin is due in Alaska Friday, where he’ll be meeting with President Donald Trump to discuss the Ukraine war as well as bilateral US-Russia relations.

Pro-Ukraine pundits have asserted all of this points to Putin’s increased ‘paranoia’ in the face of now nightly and weekly large waves of drone attacks on sensitive Russian sites out of Ukraine.

Meduza: There are now 12 air defense systems near Putin’s residence in Valdai. Up from just 2 a year ago.

Ukrainian drone strikes on oil refineries and other high-value targets are so effective because Russia’s air defenses are too busy protecting an increasingly paranoid Putin. https://t.co/jsYGHrZsrT

— Pekka Kallioniemi (@P_Kallioniemi) August 13, 2025

CNN and others are identifying that the host venue will be Joint Base Elmendorf-Richardson, a combined US Air Force and Army installation in Anchorage.

Alternative and civilian sites were looked at, but peak tourist season in Alaska reporteldy left few last-minute options. The Alaska summit was only unveiled and confirmed less than a week ago.

Authored by Larry Sand via American Greatness,

In a stunning report, StorageCafe reveals that California remains the “undisputed leader in outbound migration nationwide, with nearly 683,000 residents leaving the state in a single year, according to the latest available U.S. Census data.” The evacuees’ top destination is Texas, which welcomed approximately 98,000 former Californians in 2023 alone.

Millennials are leading the migration to Texas, making up over 31% of all movers. They are followed by Gen Zers, who account for 20%, and Gen Xers, representing nearly 15% of those relocating. Interestingly, Californians moving to Texas tend to earn more than the national average across most age groups, highlighting the financial advantage of the move.

The news from StorageCafe isn’t unique. U-Haul has released a new report, and for the fifth straight year, California topped its Growth Index—meaning more residents of the Golden State rented one-way U-Haul trucks to leave the state in 2024 than residents of any other state. Texas was the top go-to state.

People are fleeing the formerly Golden State for various reasons—high crime rates, exorbitant taxes and insurance costs, clueless leadership, and a failing education system.

Businesses are also packing up and going elsewhere. Major companies, including Chevron, SpaceX, and Charles Schwab, have departed California. In total, 441 businesses have left the state since 2018 and moved their headquarters elsewhere. High taxes, skyrocketing rent, soaring costs of living for employees, and excessive red tape are some of the reasons cited by the businesses that have exited, with, again, Texas being the primary destination state.

On the education front, per the California Policy Center, 45 out of California’s 58 counties have experienced a decline in traditional public school (TPS) enrollment over the last decade. Over the past ten years, statewide TPS enrollment has decreased by more than 612,000 students.

It’s important to note that California introduced transitional kindergarten during this period, which increased TPS numbers. When considering only grades K-12, enrollment has dropped by more than 762,000 since 2015.

There are myriad reasons for parental dissatisfaction, but perhaps the most egregious is that the state has taken on a co-parenting role, perhaps best exemplified by AB 1955, which California Gov. Gavin Newsom signed into law in 2024. This troubling legislation prevents school districts from requiring staff to inform parents if their child chooses to change their gender. No other state in the country has enacted such a strict law. The “Support Academic Futures and Educators for Today’s Youth (SAFETY) Act” explicitly bans schools from enforcing any policies that mandate sharing “any information related to a pupil’s sexual orientation, gender identity, or gender expression to any other person without the pupil’s consent.”

Still being considered by the legislature, AB 495, the “Family Preparedness Plan Act of 2025,” authored by Assemblywoman Celeste Rodriguez (San Fernando-D), claims to offer compassionate solutions for immigrant families facing sudden separations due to detention or deportation. However, critics—including attorneys, parental rights advocates, and faith-based organizations—warn that it dangerously redefines guardianship, removes parental rights, and creates legal loopholes that facilitate child kidnapping.

Erin Friday, an attorney and president of Our Duty-USA, a parent-led advocacy group, calls AB 495 “a child trafficker’s and kidnapper’s dream bill.”

“There is no background check, no welfare check, no court oversight, and no verification. All you need is a piece of paper and some form of identification, with no obligation for the adult handing the child over to verify the identification, and presto, someone walks away with your child,” she warned.

Friday adds that a stranger can consent to medical treatments for the child, and the bill absolves the doctors from any liability if the adult giving consent does not have any actual legal connection to the child.

In addition to the state legislature, many school districts across the state have crossed traditional barriers. Parents of students at Sage Creek High School in Carlsbad, California, are seeking answers after a self-described BDSM (bondage, discipline, sadism, masochism) expert from a clinic offering trans surgeries was scheduled to speak at the school during a recent week dedicated to LGBTQ student support.

In late March, parents started voicing their opposition to a decision to have Mita Beach, a representative of DAP Health—a medical clinic that offers gender transition surgeries—speak. This occurred during a lunchtime event in the cafeteria and was open to all students.

As reported by RealClearPolitics, “After looking into his business websites and social media accounts, which contained at least one photo of Beach engaged in BDSM and listed workshops he’s led on ‘Kink 101’ and ‘Examining Self-Injurious Behavior, Erotic Play, and Body Modification,’ several concerned parents contacted the high school and district superintendent’s office.”

If a parent wants to opt out of their local public school, the state obstructs their efforts. One particularly onerous measure is in the works. If enacted, AB 84, authored by Assemblymember Al Muratsuchi (D–Torrance), would divert millions in state funding from charter schools—funds meant for classrooms—and redirect them toward excessive oversight costs and increased bureaucracy. The most impacted? Charter schools that offer flexible options like hybrid learning, homeschooling, virtual school, independent study, and drop-in centers.

Private choice in California? None, and not much hope for the future.

On July 4, President Trump approved legislation allowing the federal tax scholarship program to proceed. The Educational Choice for Children Act (ECCA) provides a tax credit that individuals can use to lower their tax bills by donating money for private school expenses for students. The program is scheduled to begin in 2027. Individuals (not corporations) who donate can reduce their tax liability by $1 for every $1 donated to accredited Scholarship-Granting Organizations (SGOs), up to $1,700. The SGOs must be federally recognized 501(c)(3) nonprofit organizations.

The scholarships cover a range of educational expenses, such as private school tuition, tutoring, educational therapies, transportation, and technology. They can also assist with additional costs for students attending public schools.

However, per the law’s final version, states can choose not to participate, meaning no students in those states would be eligible for the program. With California legislators in the pocket of the California Teachers Association, the powerful teachers’ union, participating in ECCA will not be an option for parents in the Golden State.

The state’s educational problems go beyond K-12 schools. Colleges in California also face widespread antisemitism. For example, UC Davis—a major research university with 40,000 students—has a well-documented anti-Jewish problem. In April of last year, the StandWithUs Center For Legal Justice filed a formal complaint with the Department of Education, alleging “a pervasively hostile, antisemitic campus climate, with incidents of unlawful discrimination and harassment, for students.”

Not surprisingly, in November, Davis was ranked as one of the most anti-Jewish universities in the country by the advocacy group StopAntisemitism, which gave Davis a grade of “F.”

In the legendary “Hotel California,” the Eagles’ Don Henley famously sang, “You can check out any time you like, but you can never leave.” Well, people are indeed leaving. Posthaste.

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

Mexico extradited 26 alleged cartel members to the United States on Aug. 12, including high-ranking members of violent cartels labeled as foreign terrorist organizations by the U.S. government.

Mexican Security Secretary Omar Garcia Harfuch stated on X that the extradition was carried out at the request of the U.S. Justice Department (DOJ), which has provided assurances it would not pursue the death penalty for those facing prosecution.

El día de hoy, el @GabSeguridadMX, en coordinación bilateral y con pleno respeto a nuestra soberanía, trasladó a Estados Unidos a 26 personas vinculadas a organizaciones criminales que representaban un riesgo para la seguridad de México.
La acción se realizó en estricto apego a…

— Omar H Garcia Harfuch (@OHarfuch) August 12, 2025

Those handed over to U.S. custody from Mexico include leaders of the Sinaloa cartel, the Jalisco New Generation cartel, or CJNG, and the Northeast cartel, formerly known as Los Zetas.

All 26 defendants face a range of criminal charges in the United States, including drug-trafficking, kidnapping, illegal use of firearms, human smuggling, money laundering, and the killing of a sheriff’s deputy.

In a statement released by the DOJ, Attorney General Pam Bondi expressed gratitude to Mexico’s National Security team for their cooperation in carrying out the extradition.

“These 26 men have all played a role in bringing violence and drugs to American shores—under this Department of Justice, they will face severe consequences for their crimes against this country,” Bondi stated.

The extradition from Mexico to the U.S. marks the second of its kind this year, as the Trump administration intensified efforts to curb drug trafficking across the border.

In February, Mexico transferred 29 cartel members to the United States, including Rafael Caro Quintero, a drug lord who is allegedly involved in the killing of a Drug Enforcement Administration (DEA) agent in 1985.

The U.S. Embassy said the latest extradition demonstrated the “growing depth of cooperation” between the two nations in tackling the threat posed by transnational terrorist organizations.

“These fugitives will now face justice in U.S. courts, and the citizens of both of our nations will be safer from these common enemies,” U.S. Ambassador to Mexico Ronald Johnson said in a statement.

Trump has raised tariffs on Mexican imports to pressure the country to take stronger action against drug trafficking, saying Mexico was not doing enough to curb the flow of fentanyl and illegal immigrants at the border.

He announced a 90-day delay in U.S. tariff hikes on Mexican goods on July 31 to allow time for negotiations, but said that Mexico would still face an across-the-board 50 percent levy on aluminum, copper, and steel, as well as a 25 percent tariff on automobiles.

Mexican President Claudia Sheinbaum on Aug. 8 ruled out allowing U.S. troops to conduct military operations within Mexico, after reports emerged that Trump has secretly directed U.S. military action against Latin American cartels designated as foreign terrorist organizations.

“The United States is not going to come to Mexico with the military. We cooperate, we collaborate, but there is not going to be an invasion,“ Sheinbaum told reporters. “That is ruled out. Absolutely ruled out.”

Ryan Morgan contributed to this report.

CPI Completed? Check!

ATH Equity? Check!

US equity markets remain resilient, underpinned by strong cross-asset flows.

The rally appears set to extend through Labor Day, driven by:

• Robust corporate earnings broadly exceeding expectations

• Diverse participation from corporates, institutions, and retail investors

• Concentrated leadership in AI, large-cap, quality, and tech names

That said, momentum may fade in September – historically, the weakest month – amid seasonality and investor re-engagement post-summer.

As Scott Rubner (former Goldman flows guru) now explains from his seat at Citadel Securities, This is a #RINO market, recession in name only…

I. Citadel Securities On-the-Ground Sentiment

Client activity remains elevated at equity market all-time highs:

• Cash Equities: Retail net buyers in 15 of the past 17 weeks

• Retail Options: 15-week net buying streak, 16 of last 17 weeks

• Institutional Options: Bullish tone in 5 of the last 6 weeks

II. This Week’s Strategic Debate: When Does Cash Rotate Back into Risk Assets?

With ICI reporting money market AUM at $7.15T (up from $3.63T in early 2020), the key question becomes: what level of yields would prompt reallocation into risk assets if the Fed changes policy?

• A 10% shift (~$700B) could energize dividend-yielding equities, high-grade credit, and risk assets, like the “January Effect” (a seasonal anomaly where equities tend to rise)

• Q4 Rotation Watch: As rate expectations soften, this “dry powder” could power the next leg higher into the other 493 stocks in the S&P 500

Money Market Assets (trillion) vs. US Treasury 3-month money market yield (%)
January 2020 – August 2025

Source: ICI, as reported by Bloomberg and compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

Historical Analog: In 2010, money market assets dropped -27% as yields declined—preceding a rotation into equities

Money Market Assets (trillion) vs. US Treasury 3-month money market yield (%)
January 2005 – January 2015

Source: ICI, as reported by Bloomberg and compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

III. Seasonality Watch

September Setup

• September 3rd often marks the monthly high for SPX since 1928

• Post-Labor Day FOMO participation typically fades, limiting buy the dip behavior

• SPX and NDX historically show August strength followed by September weakness

SPX 500 Monthly Performance
1928 – Today

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

SPX 500 Daily Performance Quilt
1928 – Today

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

IV. Retail Positioning

1. Citadel Securities’ retail cash equities: Net buyers in 15 of the last 17 weeks, following a soft April.

Retail Cash Equities – Net Notional by Week
STD Dev January – Aug 2025

Source:  Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

2. Ongoing strength with 19 straight months of net notional and shares buying.

3. Citadel Securities’ retail cash seasonality trends based on data from August 2017- July 2025.

• June & July = Strong

• August = Slower

• September = Weakest

Retail Cash – Proportion of Net Notional By Month
August 1, 2017 – July 31, 2025

Source: Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

V. Volatility and Options Positioning

4. Retail Options Activity: July 2025 set a new monthly volume record at Citadel Securities.

Retail Options – Average Daily Volume by Month
Normalized to January 2020

Source:  Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

5. Citadel Securities’ Retail Option Buying Streak

• 15-week net buying streak and 25 of the last 27 trading days.

• Friday’s activity hit the 99th percentile, 41% above 12-month avg.  

Retail Options – Put / Call Direction Ratio by Week
January – July 2025

Source: Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

6. Citadel Securities’ Bullish Retail Options Streak Watch

• 6th longest bullish options streak since 2020

• Average duration of the top 5 streaks is 18 weeks → room for Labor Day upside?

Longest Retail Weekly Option Buying Streaks on Record, since 2020.
# of weeks

Source: Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

7. Seasonal Drop Ahead?

Citadel Securities’ retail options volume typically wanes in September.

Retail Options – Proportion of Contract Volume by Month
January 2020 – December 2024

Source: Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

8. Citadel Securities Institutional Options

Bullish in 5 of the last 6 weeks, peaking at the 89th percentile. Note that Institutional Options clients moved from bearish to bullish in the last month.

Institutional Options –Call/Put Direction Ratio by Week
January – August 2025

Source: Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

9. Volatility trend: Realized vol continues to fall. VIX at the time of typing = 15.20

• 3-month: 26

• 1-month: 9

• 1-week: 12

SPX 3-month realized volatility 
August 2023 – August 2025

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

VI. Corporate Earnings & Passive Flow Dynamics 

10. Q2 Earnings: 75.2% of SPX market cap has reported.

SPX Market Cap reporting by week
Q2 earnings

Source: Bloomberg as compiled by Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results. 

11. Surging Corporate Buybacks

According to Birinyi Associates, US corporates have announced $983 billion worth of authorizations YTD, which makes it the best start to the year on record. In addition, corporate executions are on pace for $1.1 trillion, which would also set a record.

US companies announced share repurchases totaling $166 billion last month, the highest dollar value on record for July. The prior record was $88 billion in July 2006.

12. 2025 Corporate Daily Flow Math: $1.1 trillion over 251 trading days → $4.4 billion/day in equity demand, according to Birinyi Associates. August is historically one of the best months of the year for executions.

13. Sector reporting concludes, ending with Nvidia on 8/27.

SPX GICS Sector by Market Cap
Earnings reporting schedule

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

14. Q2 EPS Growth: +11.4% vs. 5% expected — strongest since Q2 2021

• According to Bloomberg, Q2 EPS beat rate of 81% exceeds the 10-year average of 74%.

SPX Earnings Reporting
As of August 12, 2025

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results. 

Key Insight: Concentration = Earnings beats → passive inflows → price momentum.

Sector Concentration Observations:  

Here are the 11 S&P 500 GICs sectors for the S&P 500 market capitalization index (‘SPX’) and S&P 500 equal weighted index (‘SPW’).

Tech weighting in SPX: 34.3% vs. 13.8% in SPW → +20.5% spread

11 S&P 500 GICs sectors by SPX % market capitalization:

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results. 

This concentration intensifies passive flows into a narrower band of equities; this drives “Magnificent 7” vs. remaining 493.

• Semiconductors: 13.7% (SPX) vs. 3.9% (SPW)

• Software: 11.6% (SPX) vs. 3.9% (SPW)

→ This narrow breadth in the top names, has created more frequent unwinds and squeezes on the short leg of the pair trade.

Top 12 S&P 500 GICs industries by SPX % market capitalization:

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

15. August Positivity Bias

The S&P 500 peaks around September 3rd, going back to 1928.

The final week of August often coincides with low positioning due to vacations, BBQ parties, contributing to upward drift in stocks, especially in low-volume environments.

SPX August Daily Performance
Since 1928

Source: Bloomberg as compiled by Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

NDX August Daily Performance
Since 1985

Source: Bloomberg as compiled by Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

VII. Institutional Positioning and Systematic Re-Leveraging

16. CTA’s: We estimate trend followers are now near fully exposed heading into late August, suggesting limited incremental upside. Our model indicates this cohort is no longer adding exposure at current levels

US Equity Aggregate CTA Positioning
January 2024 – July 2025

Source: Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

US CTA Signals 
January 2024 – July 2025

Source: Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results. 

17. CFTC Net Longs: Continued increase in positioning back to historical levels.

CFTC S&P 500 Consolidated % Long
January 2022 – July 2025

Source:  COT report, as compiled by Citadel Securities, as of 8/11/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

18. Vol-Control strategies – which take cues from the realized volatility market – have already increased exposure substantially.

5% risk target: 32% exposure (up from 10% in April)

Vol Target Exposure with 5% Risk Control
Exposure Rank since 2020

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results. 

19. 10% volatility target strategies are now at 63% exposure (up from 20% in April)

Vol Target Exposure with 10% Risk Control
Exposure Rank since 2020

Source: Bloomberg as compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

20. Risk Parity strategies – driven by cross-asset volatility – now hold equity exposure near their 3-year average of 25% exposure.

Systematic positioning remains elevated → watch for volatility moves, as flows skew moves to the downside.

Risk Parity Exposure 
Jan 2022 – July 2025

Source: Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

21. Sentiment Normalization: AAII allocations back to historical averages → less upside from sentiment alone.

AAII Stock Allocation (%)
Jan 2022 – July 2025

Source: AAII, as reported by Bloomberg and compiled by Citadel Securities, as of 8/12/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

GMI | September Tactical Checklist

Systematic strategies (CTA/Vol-Control) near max exposure → headline and economic risks

September = statistically weakest month for SPX (since 1928)

Volatility rises historically in September (since 1990)

VIX August Monthly Performance
Since 1990

Source: Citadel Securities, as of 8/5/25. Figures are for illustrative purposes only. Past performance figures do not guarantee future results.

Retail participation wanes across cash and options

Cyclicals and high beta may mean revert

Anti-momentum rotation risk remains high

Read more here…

Authored by Connor O’Keefe via The Mises Institute,

This Friday, President Trump and Russian President Vladimir Putin are set to sit down together in what will be the first face-to-face meeting between leaders of each country since the war in Ukraine broke out almost three and a half years ago.

For many, this is a long-overdue step towards bringing this war to an end. For others, it marks the dangerous and unnecessary return of a policy of “appeasement” that’s sure to prompt more invasions from Putin and other leaders that the US government does not back.

There certainly will be plenty of debate in the coming days over the wisdom and likely consequences of this meeting. But, as with anything, the best way to understand both is to look back at how we got here.

A lot has been written about the many policy decisions that took place after the USSR fell in 1991, which transformed the Russian government and the Western governments in NATO back into enemies. Those factors are important for understanding why Putin made the decision to invade Ukraine in early February 2022 and how he was able to get enough of the Russian public on board with the war.

But even setting all of that aside, when Putin gave the order for Russian forces to invade Ukrainian territory, he cited three purposes for the move in his address to the Russian people that can help us understand the specific Russian objectives in this campaign.

They were to prevent Ukraine from joining NATO, to destroy the far-right Nazi factions within Ukraine, and to protect the people living in the separatist regions of eastern Ukraine.

It is certainly possible that none of these reasons was or is genuine.

As we Americans should know well, governments frequently use entirely fake justifications to manufacture public acceptance for a war when they think the real reason won’t work.

However, if we look closer at Putin’s actions, we can get a clearer picture of what the Russian leader wanted and, importantly, was willing to settle for.

Shortly after the invasion began on February 24, 2022, Ukraine’s President Zelensky attempted to set up an indirect backchannel with Putin. He was able to do so fairly quickly with the help of the Israeli Prime Minister at the time, Naftali Bennet.

Thanks to Bennet’s efforts, the two sides began talking. And, exactly two weeks after the tanks had rolled over the border, the Ukrainian and Russian foreign ministers sat down in person in Turkey to see if an agreement could be reached that would put an end to the fighting.

A few weeks later, they did reach an agreement.

According to officials who were present on both sides and in mediator roles, the Russians agreed to pull all of their forces back to pre-invasion boundaries—in other words, to end the war and give up all the territory they had seized in that first month. And, in exchange, the Ukrainians agreed not to seek NATO membership.

Remember, this isn’t some Russian spin on the Istanbul talks, it’s based on what the Ukrainian negotiators and the German, Israeli, and Turkish officials who were present said happened.

So we know that a month into the war, Putin was willing to abandon two of the three stated objectives of his military campaign in exchange for a promise that Ukraine would not join NATO, which suggests that this really is the priority for the Russian regime.

He may have even begun to honor his side of the agreement. Putin claims that the sudden massive withdrawal of Russian forces from the areas around Kyiv, a few days after the Istanbul agreement was reached, was actually the first step towards withdrawing the entire invading force. That may be a lie, but the timing does match up.

Regardless, shortly after the talks wrapped up, UK Prime Minister Boris Johnson went to Kyiv, really on behalf of all the top Western military powers in NATO, and convinced the Ukrainians to walk away from the agreement, which they did.

It appears that Western governments talked the Ukrainian leaders into continuing the fight by promising heavier weapons and more sophisticated support to help them gain more leverage over the Russians, so future talks could be even more fruitful.

Some people in Western governments may have really believed that. But a lot of the rhetoric we saw from American officials when they were talking to the American public or to each other suggests that the true motivations for keeping the war going grew out of a recognition of how lucrative it would be for certain well-connected American companies, a desire to learn more about what tactics and technology is effective in modern conventional war, and a perceived opportunity to “weaken Russia” without the need to spill any American blood.

But regardless of whether their intentions were pure and misguided or deceptive and depraved, American and Western European officials stymied the early peace talks and kept the war going. And fairly quickly, it became frustratingly clear that the Ukrainians would not be able to fight their way to a better negotiating position than they had had in March of 2022.

Over that first summer, the “heavier weapons” the US and other Western governments began transferring to the Ukrainians did not push the front line dramatically to the east, as the Ukrainian government seems to have been led to expect. And then, in September, the Russian government formally annexed four oblasts—or provinces—in eastern Ukraine, laying permanent claim to tens of thousands of square miles of territory that it had previously agreed to surrender. Ukraine’s position in future negotiations was already growing weaker.

That said, in November, a month after the Russian annexation, Ukrainian forces successfully used misdirection to recapture the southern city of Kherson and the northern city of Kharkiv. While their position was still weaker than it had been in March, it was still a solid opportunity to transition back to talks.

But again, the opportunity was missed.

Instead, Western officials and their allies in the media began to generate hype about plans for a massive counteroffensive operation that would mobilize all Ukrainian forces to break through Russian lines and drive Russian forces out of the newly-annexed territory.

For months, the coming counteroffensive was used to shoot down any calls to return to the negotiating table. But several independent military experts raised doubts—especially in reaction to the nightmarish battle over the city of Bakhmut—that Ukraine truly had the capability to push the Russian lines way back to the east. Those concerns really came to a head in early 2023 when a 21-year-old airman named Jack Teixeira leaked evidence that American military and intelligence officials were similarly pessimistic about the operation—for which he was thrown in prison with a sixteen-year sentence.

And, sure enough, when the counteroffensive began in the summer of 2023, the Ukrainians struggled to break through Russian minefields and ended up losing more territory than they gained. The counteroffensive was a failure. And yet, the war went on.

For the next year, the front lines remained mostly unchanged as the war evolved into a trench-style artillery war of attrition. Ukraine was dealing with a serious shortage of soldiers, which the Russians appeared to have recognized meant time was in their favor.

Then, last summer, the Ukrainians made the surprising decision to pull troops away from the front line to send them north over the border to capture some Russian territory in the so-called Kursk region. While they were met with some initial success, because the Russians had not thought to defend the area heavily, the territory they took was small compared to what the Russians held in Ukraine. And, most consequentially, the transfer of soldiers weakened Ukraine’s already-tenuous standing on the eastern front.

Which has meant that, over the last year, Ukraine has been struggling. According to some analysts like retired Colonel Daniel Davis, the Russians have shifted their focus from trying to take more territory to trying to wipe out as many soldiers as possible to exacerbate Ukraine’s manpower problems, which will ensure that, down the road, taking territory will be far easier.

The Russians also didn’t let the lame-duck Biden administration’s provocative and unnecessarily risky decision to help the Ukrainians launch long-range missiles deeper into Russia pull them away from their strong position. So Russian forces now hold a lot of territory, and time is on their side if they wish to take even more territory in the future. And there isn’t much of anything else the NATO governments can do with weapons transfers or economic sanctions to change that. If they could, they would have done it already.

In other words, the Russians have significantly more leverage over the Ukrainians and their Western backers than they did during those early talks in Turkey a month into the war.

Trump has clearly tried to create some pain points against Putin that he can attempt to negotiate away—most notably a massive tariff on India for buying Russian oil. But the disheartening and frustrating fact is that Putin has no real reason to want this war to come to an end right now.

That said, the Russian president did signal that he would be open to stopping the war in exchange for eastern Ukraine. If that proposal is genuine, Trump should seriously try to work out a deal and hope that the boasts he made about deceiving the Iranians with fake negotiations earlier this summer did not destroy his credibility in situations like this.

But, regardless of what happens during the talks on Friday, more Americans need to start recognizing what the civilians in Ukraine evidently have already: that, as bad as this situation is, it can and will continue to get worse.

So many opportunities for peace have been missed. If there is any chance of another, Trump should take it.

Authored by Jonathan Turley,

In Cool Hand Luke, Paul Newman’s character famously bluffs in a hand of poker and later explains, “Yeah, well sometimes nothing can be a real cool hand.” It is a great scene and a great movie. The problem is that sometimes nothing can be . . . well . . . nothing. Democrats are learning that lesson this week after Texas legislators headed home and opponents are calling the bluffs of figures from California Gov. Gavin Newsom to Texas’s Beto O’Rourke.

There is a key poker tip left unstated in the movie: You cannot bluff when the other players already know your cards.

After a couple of weeks of posturing in exile in blue states, Texas Democrats returned home as expected, allowing the state to move forward with its redistricting plan. There was never any doubt about what would happen because it has happened before with Democrats —lacking the votes to defeat legislation, they flee the state to prevent all legislative business.

The media predictably lionized the Democrats as stateless freedom fighters while repeating unfounded claims that the state was about to wipe out minority representation, a move that not only contradicted the GOP plan but would contravene federal law.

It was another “I am Spartacus” moment for Democrats seeking recognition as the leaders of the resistance movement. It did not work out particularly well due to the chosen safe harbor for the Democratic political refugees: Illinois.

Illinois is arguably the most gerrymandered state in the union, where Republicans were reduced to just three of the state’s 17 congressional seats, even though they won nearly half the votes in the last election. The districts resemble an electoral Rorschach test, with Democrats snaking dozens of miles to capture pockets of Democratic voters to deny Republicans seats. Standing next to Gov. JB Pritzker (D) (who signed the gerrymandering legislation) as he bellowed about “stealing” congressional seats became an instant punchline.

For Pritzker, the penalty was merely being denounced as a hypocrite, which rarely bothers politicians playing to the extreme parts of their parties. While Pritzker proclaimed that the Texas Democrats would remain safe under his protection in Illinois, the media just shrugged when the resistance collapsed and they returned home to collect their frozen salaries.

For others, it will prove more costly.

In California, Gov. Gavin Newsom tried nightly to out chestpound his fellow Democrats like Pritzker.

Lacking the props of actual legislators used by his fellow presidential aspirant in Illinois, Newsom pledged that he would match Texas district for district if they went forward with their redistricting plan.

He then discovered that you cannot bluff with your cards facing the opposing players.

The problem is that states like California and Illinois are already heavily gerrymandered as are many Democratic states. In California, Republicans constituted roughly 40 percent of the congressional vote in 2024 but received only about 17 percent of the House seats. Pushing Republicans to near zero would be expensive and require districts that defy the laws of nature in their bizarre shapes. In comparison, Texas and many GOP-controlled states are largely untapped and can produce many more GOP districts with relatively easy changes.

Nevertheless, Newsom pledged that he would do it if they called his bluff. That will cost over $200 million to a state with a crippling deficit. In the meantime, Texas Gov. Greg Abbott pledged that he could just as easily produce ten districts if California creates five new democratic seats. He could do it.

Newsom would also have to get around state law and the redistricting commission.

Otherwise, his plan would go down in flames in the courts.

The same is true for Gov. Cathy Hochul, who called such redistricting a “legal insurrection” and then pledged to lead her own insurrection. The problem, again, is that New York is already heavily gerrymandered. Harris received only 56% of the vote in 2024, but  Democrats hold 73% of the state’s 26 House seats. Prior Democratic efforts at gerrymandering have been so extreme that courts struck them down.

Of course, Hochul is still better off in her bluff than Massachusetts Gov. Maura Healey who pledged to retaliate if Texas moves forward despite the fact that the state’s prior gerrymandering has already reduced Republican districts to zero.

Similar efforts in states like Maryland have led to sharp rebukes from courts. Previously, Democrats turned to Marc Elias, who gained infamy as a key player in the Russian collusion hoax, to defend an outrageously gerrymandered redistricting. A court found the effort not only in violation of Maryland law but also of the state constitution’s equal protection, free speech, and free elections clauses. The court declared that the map pushed by Elias “subverts the will of those governed.”

Perhaps the worst bluff was made by Beto O’Rourke, who has repeatedly tried and failed to get elected as senator, governor, and president. With each defeat, O’Rourke seems to get more extreme and profane. After recently losing a court case barring him from continuing to raise money to fund the unlawful flight of the Democratic legislators, O’Rourke proclaimed he did not care what the law or the courts may say: “F**k the rules, we are going to win whatever it takes.”

O’Rourke is following the John McEnroe school of appealing court rulings, but the difference is that tennis officials cannot put you in jail for a court tantrum.

After his recent speech, I noted that O’Rourke appeared to be not only undermining his own appeal but begging for a contempt sanction.

Now, Texas Attorney General Ken Paxton is calling his bluff and asking for a contempt ruling. His main witness is likely to be O’Rourke himself in delighting a Democratic rally with statements like this:

“He [Paxton] tried to stop us from holding this rally here today in Fort Worth, he tried to stop us from raising money to support these Democrats in the fight—he lost—and one of the worst things that we could do to Ken Paxton is to right now choose to donate, to have the backs of these fighters… He is trying to stop us from raising the resources they [the Democrat statehouse fugitives] need to ultimately prevail and come through and we are not going to let him stop us. Are you with me on that?”

“F**k the rules” is not exactly a good argument to make to any judge.

Courts may soon explain to figures like O’Rourke what the “Captain” explained in Cool Hand Luke: “What we’ve got here is… failure to communicate. Some men you just can’t reach. So you get what we had here last week, which is the way he wants it… well, he gets it.”

Jonathan Turley is the Shapiro professor of public interest law at George Washington University and the author of the best-selling book “The Indispensable Right: Free Speech in an Age of Rage.”

Authored by Luis Cornelio via HeadlineUSA,

A former Democratic intelligence official warned the FBI that in 2017, then-Rep. Adam Schiff had leaked to the media in an effort to smear President Donald Trump with the Russia collusion hoax.

The whistleblower’s warnings were nearly immediately dismissed, according to a newly released FBI memo.

The documents—first reported on Monday by Just the News and shared with Congress by FBI Director Kash Patel—detail how the DOJ shielded Schiff, D-Calif., from prosecution for allegedly leaking classified intelligence.

According to the FBI memo, the whistleblower—a self-described friend of Schiff—called the leaks “unethical,” “illegal,” and “treasonous.” He was  then told “not to worry about it because Schiff believed he would be spared prosecution under the Constitution’s speech and debate clause.”

Notably, neither the solicitor general nor the attorney general had made that determination, Just the News noted.

Instead, DOJ officials showed little interest in pursuing the whistleblower’s leads, even parroting Schiff’s constitutional defense to justify their failure to prosecute him.

The whistleblower told the FBI in 2023 that he attended a 2017 meeting where Schiff personally authorized leaking classified material.

“When working in this capacity, [redacted staffer’s name] was called to an all-staff meeting by SCHIFF,” an interview report said, as quoted by Just the News. “In this meeting, SCHIFF stated the group would leak classified information which was derogatory to President of the United States DONALD J. TRUMP. SCHIFF stated the information would be used to indict President TRUMP.”

Worse still, when the whistleblower “stated this would be illegal and, upon hearing his concerns, unnamed members of the meeting reassured that they would not be caught leaking classified information,” according to the 2023 interview report.

Patel blasted the conduct as yet another example of abuse of power in a bid to undermine Trump after his 2016 election.

“For years, certain officials used their positions to selectively leak classified information to shape political narratives,” Patel said. “It was all done with one purpose: to weaponize intelligence and law enforcement for political gain.”

“Those abuses eroded public trust in our institutions,” the FBI director continued. “The FBI will now lead the charge, with our partners at DOJ, and Congress will have the chance to uncover how political power may have been weaponized and to restore accountability,” he said.

Schiff issued a meandering statement attacking the whistleblower’s credibility and painting himself as a victim.

“These baseless smears are based on allegations that were found to be not reliable, not credible, and unsubstantiated from a disgruntled former staffer who was fired by the House Intelligence Committee for cause in early 2017, including for harassment and potentially compromising activity on official travel for the Committee,” Schiff said.

He added: “Even Trump’s own Justice Department and an independent inspector general found this individual to not be credible, have ‘little support for their contentions’ and was of ‘unknown reliability,’ and concluded that his accusations against Members of Congress and congressional staff ‘were not ultimately substantiated’.”

“As of today, there are no serious territorial exchange plans on the table,” President Emmanuel Macron of France told reporters Wednesday after he participated in a phone call with President Trump as well as European leaders.

Macron, alongside the Europeans, is insisting that no one other than the Zelensky government could negotate a land swap or sign on to a peace deal. Trump has told President Zelensky that he wants a ceasefire from the Putin summit, which is to be held at a US military base in Anchorage on Friday.

During the Wednesday virtual call, Zelensky reporteldy told Trump that Russian President Vladimir Putin is “bluffing” and that he doesn’t “want peace” – but instead is just buying time while seeking increased credibility on a global stage. The Ukrianian leader again lobbied Trump to levy more sanctions on Moscow. NATO chief Mark Rutte, meanwhile, has said “the ball is now in Putin’s court.” But the reality is that Putin currently has more leverage than ever. Still, Trump is warning of “very severe consequences” if Putin doesn’t sign on to a deal.

Chancellor Friedrich Merz of Germany, who was also on the call, said Trump agrees that security guarantees for Ukraine should be prioritized as part of any peace negotiations.

But on the question of territorial concessions – which from Moscow’s point of is the central issue (alongside no NATO membership) – Kiev does appear to be softening its position, possibly willing to accept a status quo of de facto Russian occupation of the eastern Donbas:

Both Mr. Merz and Mr. Zelensky told reporters that Mr. Trump had agreed to five principles for the talks with Mr. Putin. They include keeping Ukraine “at the table” for follow-up meetings on the war and refusing to discuss peace terms, like swaps of land between Russia and Ukraine, before a cease-fire is put in place.

They said Ukraine would be willing to discuss changes in territory — including ceding some land to Russia — but that it would not discuss legally recognizing Russia’s occupation of parts of the country.

However, the Kremlin has already long declared the four territories and Crimea part of the Russan Federation, and so this will be a potentially serious hang up. More from Trump:

• TRUMP: FIRST MEETING WITH PUTIN IS FINDING OUT WHAT WE’RE DOING
• TRUMP: SECOND MEETING WITH PUTIN WILL BE MORE PRODUCTIVE
• TRUMP: MAY NOT HAVE 2ND MEETING IF I DON’T GET ANSWERS I WANT
• TRUMP: IF FIRST PUTIN MEETING GOES WELL, I’LL SEEK A TRILATERAL
• TRUMP: SECOND MEETING WOULD BE ZELENSKIY, PUTIN

The West still wanting NATO future membership on the table will also be a serious non-starter and red line for Moscow. According to the NY Times:

The principles also include insisting on security guarantees for Ukraine after the war — including retaining its right to potentially join NATO in the future — and a commitment to ramping up economic pressure on Russia if negotiations do not lead to an agreement.

The reality remains that this is likely the West’s and Ukraine’s last chance effort to find peace. Putin is in the driver’s seat on the battlefield and he knows it.

Merz said there could be “major decisions” made during the Trump-Putin summit as he said Europeans are therefore “doing everything we can in order to lay the groundwork to make sure that this meeting goes the right way.” –CNN

The past several days have seen multiple headlines of massive evacuations of Ukrainian towns and villages from the east near the front lines, including ten more just on Wednesday, because of consistent Russian gains.

Russia under Putin has shown its ability to weather sanctions just fine, and the Kremlin has still not actually declared a full state war yet. So if Moscow wanted to, it could ramp up further and declare full societal mobilization, but it’s still at the legal desigation of ‘Special Military Operation’.